Lido Finance, the Ethereum staking solution, has raised $70 million from venture capital giant Andreessen Horowitz, marking the protocol’s first funding round since May 2021.
It has been reported that a spokesperson for the venture capital firm said that Andreessen Horowitz’s investment in Lido is intended to further support the adoption of decentralized staking solutions for Ethereum 2.0.
However, 2.0 mark a significant shift in the network’s consensus algorithm by ushering in the adoption of proof-of-stake (PoS) and other upgrades that could enhance scalability and reduce fees. The transition to Ethereum 2.0, which began in November 2020, is still ongoing.
The report said that according to Andreessen, staking Ether (ETH) has significant barriers due to the high threshold for operating a node. To become a full validator, users must be able to stake at least 32 ETH, which is worth over $90,000 at current prices.
Likewise, in addition to investing in Lido, Andreessen said it’s staking a portion of its ETH holdings on the BNB Beacon Chain through the protocol.
The venture firm said:
“Staking with Lido removes many of the operational complexities that institutional investors have faced.”
Ethereum's BNB Beacon Chain recently registered its 300,000th validator, according to industry data. As of March 3, nearly 9.7 million ETH had been staked for a total value of over $27.1 billion. Although terms like Ethereum 2.0 and Eth2 are still widely used in the industry, the Ethereum Foundation announced in January it would ditch such terminology. Instead, it now refers to the original Ethereum blockchain as the "execution layer" and the PoS chain as the "consensus layer."
Lido Finance, founded in 2020, offers a liquid staking solution for Ethereum 2.0, allowing users to stake their ETH with no lockups or minimum deposits. As Cointelegraph reported, Lido also supports other tokens, having only recently added Kusama liquid staking.
Thus, Lido concluded a $73 million funding round in May 2021 that was led by crypto venture capital firm Paradigm. Three Arrows Capital, Alameda Research, Digital Currency Group, and Alameda Research also contributed.
Source: Cointelegraph