Lido's Liquid Staking Dominance Faces Restaking Threat
Lido's liquid staking protocol has been a game-changer for Ethereum users. In 2020, the Launchnodes team formed Lido on the Ethereum Beacon Chain, allowing anyone to stake Ethereum without the 32 ETH requirement that traditionally limited participation in the Proof of Stake consensus layer.
At certain market prices, the 32 ETH requirement exceeds $111,921, making it inaccessible to most users. Lido allows users to deposit any amount of ETH and receive stETH, which acts as a 1:1 receipt for their activity.
This liquidity enables users to earn rewards while using stETH in DeFi protocols like Curve and Aave. In March 2021, the protocol reached a total value locked of $13.98 billion, with Ethereum making up 41% of the total. The platform supported other blockchains, including Terra, Solana, and Kusama.
However, Lido is not alone in the liquid staking space. EigenLayer introduced a competitive layer through restaking, allowing users to rehypothecate Ethereum's economic security and earn rewards. This has fueled the growth of liquid restaking tokens, such as ether.fi's eETH, which reached a $330 million total value locked in early 2026.