The history of Lido Finance

Early development and the rise of stETH

Lido launched its testnet on November 26, 2020, and began ETH staking on December 18, 2020. The founding team consists of Konstantin Lomashuk, Vasiliy Shapovalov, and Kasper Rasmussen from P2P Validator. In December 2020, the protocol completed a $2 million financing round with investors like Semantic Ventures and ParaFi Capital. The DAO later sold 100 million LDO tokens to raise 21,600 ETH, an amount totaling $75 million by May 5, 2021, with tokens released linearly after a 12-month lock-up. Paradigm secured 70 million LDO during this round, while other participants included Three Arrows Capital, Jump Trading, Coinbase Ventures, and Dragonfly Capital. The protocol added Terra staking in March 2021 and released the LDO token in January 2021. In June 2021, Delphi Digital proposed including Aave’s staking into Lido’s service, which the community passed. Users can stake LDO-ETH on SushiSwap to obtain Sushi rewards. Users receive stETH when they stake ETH, a token that users can trade or lend throughout DeFi.

Market share shifts and institutional competition

Lido holds 9.13 million ETH in staking, yet its market share fell from 23.93% to 21.18% during the first half of 2026. The Ethereum staking base grew from 36.3 million to 43.1 million ETH in that period. Institutional capital moved elsewhere, as the institutional segment grew from 25.9% to 35.3% of staking. Bitmine held 11.5% of this segment at June 30, 2026, while Coinbase held 10.9% and Binance held 7.9%. The DAO recorded a $4.5 million loss for the first half of 2026 because of a one-off expense regarding the Kelp incident, which forced the distribution of 143.98 burnable earnETH shares to cover the shortfall. I find the 386,000 ETH increase in Lido’s TVL insufficient to offset the massive shift toward other institutional providers. You likely know that stETH liquidity remains necessary, but Sharplink is now deploying $200 million through the protocol to maintain relevance. The treasury position excluding LDO decreased from $157.5 million to $88.3 million by June 30, largely because the ETH price fell to $1,569. Anchorage Digital became the first federally chartered US bank to custody and mint wstETH. Even with the 0% infrastructure fee for qualifying stVaults through October 31, adoption remains slow.

Product expansion and the LDO outlook

Lido expanded into new segments with the Lido Earn suite and the Wisp AI agent. EarnETH reached 90.6k ETH in TVL, and the EarnUSD stablecoin vault reached $32.1 million. These vaults received a $5 million seed allocation in March 2026. The DAO recently proposed a $20 million LDO buyback using 10,000 stETH to combat a depressed valuation. This plan would absorb roughly 65 million tokens, which covers about 8% of the circulating supply. LDO currently trades around $0.30 to $0.315, which is 70% below its historical ETH ratio. The protocol reported $40.5 million in revenue for 2025, which included $37.4 million in staking fees. This marked a 23% decline compared to the previous year. Wisp recorded 3,000 waitlist registrations as development continues. The DAO’s effective take rate reached 6.15% after fee changes in late 2025. Will the ValMart launch in early 2027 solve the problem of validator concentration?