The Ultimate Lido Finance Review
Summary
TLDRThe script introduces Lido, a staking service that simplifies the process for users and has amassed significant stake, raising concerns about its power over top blockchains. Lido addresses staking difficulties and liquidity issues, offering a solution with its stETH token. Despite impressive growth and adoption, concerns arise from Lido's tokenomics, centralized distribution, and unclear token emissions schedule. The future roadmap includes decentralization and governance improvements, but the script concludes with a cautious stance on investing in Lido's LDO token due to these issues.
Takeaways
- 🚀 Lido is a staking service, not a blockchain, that simplifies the staking process on various blockchains.
- 💰 The staking market, where Lido operates, is huge, currently exceeding $50 billion and expected to grow further.
- 🔒 Lido addresses two main problems: the difficulty of staking independently and the loss of liquidity and flexibility during staking.
- 📈 Lido's staked ETH token (stETH) can be traded or used in DeFi protocols, offering users more flexibility and liquidity.
- 🛡️ Lido's system delegates the staking process to validators without giving them direct access to users' funds, enhancing security.
- 🌍 Lido has experienced significant growth, becoming the largest depositor of staked ETH on the Beacon Chain with over $7 billion staked.
- 🚩 The LDO token, used for governance, has three red flags: poor value capture, centralized distribution, and unclear token emissions.
- 🔧 Lido's roadmap includes improving decentralization, governance processes, and expanding to other blockchains beyond Ethereum.
- 🏆 Lido faces competition from both centralized entities like Coinbase and decentralized projects like Rocket Pool.
- ⚖️ The final verdict on Lido is positive, especially for its service, but caution is advised regarding its LDO token due to weak tokenomics.
Q & A
What is the name of the staking project discussed in the transcript?
-The name of the staking project is Lido.
What does Lido aim to solve in the staking process?
-Lido aims to solve two main problems: the difficulty of staking by oneself due to technical requirements and the loss of liquidity and flexibility when coins are staked.
What is the token symbol for Lido's project?
-The token symbol for Lido's project is LDO.
How does Lido handle the staking of Ethereum?
-Lido stakes Ethereum on behalf of users by receiving ETH in their staking pool smart contract, staking it, and giving users their own stETH token in return.
What is the advantage of using Lido's stETH token over traditional staking?
-The stETH token can be traded or used in DeFi protocols as if it were actual ETH, providing liquidity and flexibility while still allowing users to earn staking rewards.
How does Lido ensure security for the staked funds?
-Lido does not give direct access to the staked funds to validators; instead, it delegates to them, which is more secure.
What is the current state of Lido's growth and adoption?
-Lido has experienced significant growth, with a large amount of ETH staked through their platform, making them the largest depositor of staked ETH on the Beacon Chain.
What are the three red flags mentioned regarding Lido's tokenomics?
-The three red flags are: 1) LDO is currently only for governance and does not capture value through fee sharing or buybacks, 2) The token distribution is highly centralized with a significant portion allocated to insiders, and 3) There is a lack of clarity on token emissions and the unlocking schedule.
What is Lido's approach to improving centralization issues?
-Lido plans to create a permission list to allow anyone to become a validator, reducing the need for approval by their DAO.
What is the final verdict score given to Lido in the transcript?
-The final verdict score given to Lido is 7 out of 10.
What are some of Lido's competitors in the staking market?
-Some of Lido's competitors include Coinbase, which is the second-largest entity for ETH2 deposits, and Rocket Pool, a decentralized competitor that supports Ethereum.
Outlines
🚀 Introduction to Lido Staking Service
The video script introduces Lido, a staking service that simplifies the process of staking on various blockchains. It emphasizes Lido's significant stake accumulation, which has raised concerns about its influence over top blockchains. The narrator contemplates whether to invest in Lido's token, LDO, and decides to evaluate the project across six categories. The staking market's vast potential, especially with the growth of proof-of-stake blockchains and Ethereum's upgrade to proof-of-stake, positions Lido for substantial growth. The script outlines two main staking issues: the technical difficulty and risk of running a validator node and the loss of liquidity when coins are staked. Lido addresses these by providing a user-friendly staking pool and a stETH token that maintains liquidity, allowing users to earn staking rewards passively.
💡 Lido's Technology and Market Adoption
This section delves into Lido's technology, explaining how users can stake their ETH through a smart contract, receive stETH tokens in return, and enjoy the benefits of staking without the complexities and risks. The stETH tokens can be traded or used in DeFi protocols, and holders accumulate staking rewards through a re-basing process. The script also discusses Lido's validator system, which enhances security by not giving validators direct access to staked funds. The narrator rates Lido's solution and technology highly, praising its elegant approach to solving staking challenges. The growth and adoption of Lido are then highlighted, showcasing its impressive user base and the amount of ETH staked, which indicates a successful capturing of the staking market opportunity. The integration of stETH in various DeFi platforms contributes to its network effects and attractiveness to users.
🔍 Lido's Tokenomics and Future Outlook
The final paragraph examines Lido's tokenomics and future roadmap. It points out several red flags, including the token's limited utility for governance without fee sharing or buybacks, a highly centralized token distribution, and an unclear token emission schedule, which could lead to market unpredictability and manipulation. Despite these concerns, the script acknowledges Lido's solid growth and presents its roadmap, which includes plans to reduce centralization, strengthen governance, and expand support to other blockchains beyond Ethereum. The competitive landscape is also discussed, noting the presence of rivals like Coinbase and Rocket Pool. The narrator concludes with a measured verdict, appreciating Lido's service but advising caution regarding the LDO token due to its tokenomics. The script ends with a prompt to watch another review video for a comparative perspective.
Mindmap
Keywords
💡Staking
💡Proof-of-Stake (PoS)
💡Lido
💡LDO Token
💡Validator
💡StETH (Staked ETH)
💡Rebasing
💡Market Opportunity
💡Tokenomics
💡Decentralization
Highlights
Introduction of Lido, a staking project with a unique service model that doesn't involve a traditional layer one blockchain.
Lido's accumulated stake has raised concerns about the power it wields over top blockchains.
Evaluation of Lido's token, LDO, across six different categories for a comprehensive analysis.
The staking market's vast potential, with over 50 billion dollars staked and significant room for growth.
Lido's solution to two main staking problems: difficulty of self-staking and loss of liquidity.
How Lido works: staking ETH and receiving stETH tokens that can be traded or used in DeFi protocols.
Lido's validators operate without direct access to staked funds, enhancing security.
Technology rating of 8 out of 10 for Lido's elegant solution to staking challenges.
Impressive growth and adoption of Lido, with a significant amount of ETH staked.
Lido's staked ETH token, stETH, is widely integrated across various DeFi platforms.
Tokenomics red flags for Lido, including lack of value capture and centralized token distribution.
Lido's roadmap includes plans to improve centralization and governance processes.
Lido's expansion to other chains beyond Ethereum as part of their future vision.
Competitive analysis comparing Lido with Coinbase and Rocket Pool in the staking market.
Final verdict of 7 out of 10 for Lido, highlighting its value but concerns over LDO tokenomics.
Sponsorship mention of Bits Gap, a trading bots platform offering various strategies for different market conditions.
Transcripts
i just discovered a staking project
that's gonna blow your mind but it's not
what you're thinking because it's not
some boring old layer one blockchain
instead it's a service that helps you
stake on those chains this project has
accumulated so much stake that people
are starting to worry about the amount
of power they have over the top
blockchains but all i'm thinking is dang
should i buy their token well to answer
that question let's evaluate them across
six different categories and then end
with my final verdict so the name of
this project is lido and their token
symbol is ldo but before we analyze
their token we got to look at its
overall market opportunity because a
project could be amazing but if its
market size is too small then we don't
want to touch it right it could be the
best project ever and capture 100 of
their niche but if their niche is only
worth like 1 billion dollars then
there's not a lot of room for growth
fortunately this is not a problem for
lido at all they are in the staking
market which is huge if we look at all
the proof-of-stake blockchains out there
and then add up the amount that people
have staked on them then we get a number
north of 50 billion dollars and i bet
that will continue to grow as more
proof-of-stake blockchains launch and as
more people decide to stake for passive
income ethereum will also
single-handedly boost the staking market
once they complete their upgrade to
proof-of-stake right now their staking
participation rate is only 10
so there's a lot of room for growth and
that 90
unstaked amount represents pure
opportunity for projects like lido to be
more specific lido solves two main
problems when it comes to staking the
first problem is that staking by
yourself is quite difficult some
blockchains require a minimum amount of
stake which could be in the tens of
thousands of dollars and even if you
have that you'd have to run some
complicated validator hardware which
requires technical skills that most
people don't have if you try running a
validator node and mess up you could
lose some of your staked coins through a
process called slashing which makes the
whole thing risky for beginners now the
second problem is that you lose
liquidity and flexibility when you stake
your coins because they're effectively
locked up and that's why a lot of people
don't want to deal with staking they
want the flexibility to use or trade
their coins whenever they want so by
addressing both of these issues lido is
able to serve the majority of users who
are interested in staking that's why i
rate their market opportunity a 9 out of
10. their opportunity is pretty much as
big as the staking market gets but in
order to capture their market
effectively they gotta have a great
solution and great technology so let's
see if they do by first understanding
how it all works so you start by sending
eth to their staking pool smart contract
they stake that eighth for you and they
give you their own state eath token or
st eth in return this st eth you can
trade it or use it in d5 protocols as if
it were actual eth but if you hold that
token in your wallet you can accumulate
eight staking rewards it gets sent to
you through a process called re-basing
and you don't have to do anything to get
it your st balance is updated once a day
to reflect your staking rewards and
there's no transaction needed you also
don't have to pay anything extra to use
lido they just deduct a 10 cut from your
staking rewards by the way this ste
token that you get you will eventually
be able to swap it back for each on a
one-to-one basis a few months after the
merge upgrade happens okay so that's how
lido works but we're still missing a key
part of their system they're validators
or node operators they are the ones that
are actually using the staked eth to do
the consensus work for ethereum like
they process transactions they store
data and they add blocks to the
blockchain but with lido's approach
those validators do not have direct
access to our staked funds because lido
doesn't send our coins directly to the
validators they delegate to them instead
which is much better in terms of
security and for their work lido
validators get a 5 cut of the staking
rewards overall i think their solution
is elegant and solves the problem well
that's why i'm giving them an 8 out of
10 when it comes to technology but just
how well has their tech translated into
actual growth and adoption well let's
find out but before we get there i want
to share another great way to earn
passive income besides staking and
that's through crypto trading bots i've
actually used a lot of bots before for
momentum trading grid trading etc and in
general i think it's a good idea to use
bots with a slice of your portfolio so
you're not just relying on one type of
strategy but today i want to highlight
bits gap a trading bots platform that's
also our video sponsor they have a ton
of different bots for all sorts of
market conditions doesn't matter if it's
bear market bull market or sideways
market they have bots that can perform
for each of those for bigger coins like
eath or seoul they've seen returns of
around 9 a month and for smaller riskier
coins it could get up to 70 a month of
course there's no guarantees that you'll
get any profits because that does depend
on market conditions and the bots that
you select after all but there's no risk
to try them out because you can get a
seven day free trial with no credit card
required and they have a demo mode where
you can try them out without using your
actual funds bitscap supports the top 15
exchanges and they only require api
access so they never hold any of your
funds if any of that sounds interesting
to you then go try them out use my link
below all right back to lido's growth
and adoption and i gotta say that i am
impressed by how far they've come just
look at this graph showing the amount of
eighth staked with lido it's certified
rocket ship and if we look at this chart
we see that lido is the largest
depositor of state eth on the beacon
chain more than double of the number two
entity coinbase lido also supports more
than just ethereum they have five
networks supported in total and
collectively there's around seven
billion dollars staked from over 175 000
users perhaps one reason that explains
this meteoric growth is that they've
done a great job at getting their staked
eath token integrated everywhere like
the curve pool for st eth and eth has
the highest total value locked in it
that pool even beats out the most
popular stablecoin pools like the one
for dye usdc and usdt you can also use
ste to do lending and borrowing through
ave or use it to mint die through maker
dao so we're starting to see real
network effects emerge for st east and
guess what that's gonna get even more
people to stake with them because
there's no reason not to if you can use
your ste as if it were ethe itself
overall lido's growth speaks for itself
and that's why i'm giving them an 8 out
of 10 for this aspect so we got all
these 8 out of 10 and 9 out of 10
ratings so that must mean that the token
is a buy right well not so fast because
i found three red flags when researching
their tokenomics first their token is
terrible at capturing value because ldo
is only for governance currently so if
you hold it you don't get a share of the
generated fees and they aren't doing
token buybacks either that means even if
their service gets more and more popular
it won't necessarily translate into
price appreciation for their token as
for their second red flag it's that
their token distribution is super
centralized like 64 of their initial
distribution was allocated to insiders
and even right now if you look at the
top 100 holders they have 91 of the
overall supply this means that whales
could easily manipulate the price of ldo
if they wanted to and the third red flag
is that we just don't know much about
their token emissions there's literally
no schedule as to when more of the
tokens will hit the market it's all up
to the dow's discretion and they can
release tokens whenever they please
currently there's 60 percent of their
supply circulating so a whopping 40
percent is yet to hit the markets and
that's not good from an investment
standpoint because we want to know what
the unlocked schedule is so that we can
be prepared for selling pressure overall
i'm not a fan of the tokenomics and i'm
giving them a 4 out of 10 in this
category now so far we've only looked at
the past but the future is what really
matters right so let's turn to the
roadmap to see if they have a convincing
vision and plan and one thing they want
to do is improve the centralization for
their project to do that they're going
to make a permission list to become a
validator for lido as of right now you
have to apply and get approved by their
dow in order to become one but in the
future they want to make it so that
anyone can join something else they're
working on is improving their governance
process to make it more robust and
resilient to capture this is actually
super important for ethereum because if
lido controls enough of the stake then
they'd have the power to screw with the
blockchain's operations so we really
don't want them to get corrupted and
that's why the team put it on their
roadmap to strengthen their governance
processes now another major goal of
theirs is to turn to other chains
besides just ethereum they started with
eth and once they found success there
they slowly expanded to other chains so
i expect that expansion to continue and
for them to improve their offerings for
those other chains too overall i think
they're headed in the right direction
plus they have a great track record so
i'm giving them a 7 out of 10 in this
area now lido is without a doubt the top
dog in their niche but they just can't
relax and pat themselves on the back
because they got competitors gunning for
them and the staking vertical like from
the centralized side there's coinbase
who's the second largest entity for eth2
deposits besides lido and coinbase
recently launched their own version of
staked eath called cb eth which you can
also use outside of their exchange
honestly coinbase looks formidable given
their millions of users and their solid
brand reputation and on the
decentralized side lido has competitors
such as rocket pool now rocket pool is a
lot smaller and they only support
ethereum but their rpl token is arguably
better than lido because it has actual
utility besides just governance for
example rocket pool validators have to
stake rpl in order to participate so if
their service becomes more popular then
that translates into direct demand for
rpl overall i think lido is in a good
place right now and they don't have too
much to worry about but in terms of
competitive advantage i'm giving them a
6 out of 10. alright it's time for my
final verdict and i'm giving them a 7
out of 10. i think lido is super
valuable and i wouldn't hesitate to use
it myself but as of right now i would
not touch their ldo token because
tokenomics matter and theirs is not
great remember i gave them a 4 out of 10
in that category either way we got to
keep our eyes on them to see how they
evolve and if you want to watch another
review video then catch this one about
chain link
Посмотреть больше похожих видео
Is Telegram's $TON Worth the Hype? (Pros & Cons)
What is Eigenlayer? Restaking Explained + Airdrop Drama
What is Uniswap - A Beginner's Guide (2024 Updated)
How To Stake WMT | World Mobile Vault Guide - Passive Crypto Income
I’m Earning 98.94% APR on GLP (Steadefi & GMX Liquidity Providing)
Solana - the party is over... ☢ Sol Crypto Token Analysis
5.0 / 5 (0 votes)