Andreessen Horowitz invests $70M in Ethereum staking protocol Lido Finance
Bengaluru, March 3, 2022:
Andreessen Horowitz recently invested $70 million into Lido Finance, another Ethereum staking platform. This is the system’s debut financing round, which took place in May 2021.
As per an Andreessen Horowitz spokesman, the venture capital company’s funding in Lido will help in the creation of decentralised staking solutions towards Ethereum 2.0. Ethereum 2.0 represents a major shift inside the network’s consensus technique with both the inclusion of proof-of-stake (PoS) as well as other changes, potentially boosting scalability and cutting fees. The transition to Ethereum 2.0, that began in November 2020, is currently underway.
About Lido Finance
Lido Finance seems to be a liquid staking solution for Ethereum 2.0 that is backed through industry-leading stake providers. Lido Finance enables consumers to wager ETH while participating in on-chain operations like lending, without trying to stick assets or manage infrastructure.
Lido Finance seeks to overcome the problems associated with early ETH 2.0 staking, also including lack of liquidity, unwavering quality, and availability, by maintaining staked ETH liquid and giving access to that too.
Participation with just about any amount of ETH, thereby enhancing the Ethereum network’s security.
According to Andreessen, staked Ether (ETH) creates significant challenges due to the increasing price of hosting a node. Into becoming full validators, customers should be able to invest at least 32 ETH, which is worth approximately over $90,000 at current market prices.
Andreessen said it would use the Beacon Chain technology to stake a part of its ETH assets in decide to finance in Lido. “Staking through Lido Finance overcomes several of the logistical challenges that investment banks traditionally faced,” the venture capital firm argues.
Ethereum’s Beacon Chain decided to sign up its 300,000th verifier, according to market information. At the time of this post, about 9.7 million ETH had been invested for a sum of $27.1 billion.
Even though terms like Ethereum 2.0 and Eth2 are mostly widely used during the market, the Ethereum Foundation introduced in January that it would cease using such. The initial Ethereum blockchain has now been known to it as the “execution layer,” whereas the PoS chain has now been known to it as the “consensus layer.”
Lido Finance seems to be a liquid stake service for Ethereum 2.0 which thus enables the client to bet their ETH with no shutdowns or minimal deposits. It must have been established in 2020. According to Cointelegraph, Lido additionally handles other coins and has already recently added Kusama liquid staking.
Lido raised 73 million USD in a funding round led by cryptocurrency venture capital company Paradigm in the year May 2021. Alameda Research, Three Arrows Capital, Digital Currency Group, and Alameda Research all made additional contributions.
How secure is Lido Finance?
Lido Finance seems to be a reliable liquid stake option for a lot of primary motivations:
- All software is open-sourced and therefore is examined on a constant schedule.
- A council of finest verifiers was established to lower stake danger.
- They use a non-custodial stake solution to mitigate liability exposure.
- The DAO can be used to determine governing choices while also manage risk.
You normally just choose one verifier when risking ETH. You may bet across many verifiers with Lido, lowering your staking hazard.