Staking giant Lido looks to bring services to Solana

Infrastructure provider Chorus One believes they can help Lido corner 25% of all staked SOL.

One of the largest ETH 2.0 and Terra staking services is now looking to expand to other proof-of-stake chains, starting with upstart layer 1 Solana. 

In a proposal today on Lido’s governance forums, crypto infrastructure provider Chorus One laid out a plan to build “a liquid staking token (for now: stSOL) that will accrue staking rewards and represent staking positions with Lido validators on Solana,” similar to Lido’s current interest-accruing stETH token.

Development funding to bring Lido’s services to an additional chain would come from the Lido Ecosystem Grants Organization, a program Lido’s governance kicked off in March. Chorus One’s requested a compensation package including 2,000,000 vested LDO tokens and a revenue-sharing model that would entitle Chorus One to 20% of the revenue from protocol fees that would go to the Lido treasury.

The milestones for Chorus One’s vesting unlocks are notably ambitious, including a 1 year cliff to “capture 2.5% of the staked SOL supply,” as well as 1,000,000 tokens scheduled to begin a one year vesting schedule “when Lido for Solana manages to capture 25% of the staked SOL supply.” The proposal notes that Chorus One is currently the largest SOL staker with $600 million in tokens.

A representative for Lido told Cointelegraph that an expansion could be a boon for the protocol’s income.

“For the Lido DAO, an expansion to liquid staking on Solana could bring with it a similar protocol fee set-up as we’re currently seeing with stETH/liquid staking on Ethereum, whereby a 10% fee on staking rewards is collected and split between node operators and the Lido DAO treasury (e.g. to grow an insurance fund),” they said.

They also noted that the door remains open to expanding to other Proof of Stake chains.

“Lido has a very simple mission – keep Ethereum staking simple, secure and decentralised – and we will look to extend this to other networks where possible,” they said.

Per Lido’s website, the services currently accounts for 256,964 ETH staked (worth over $700 billion) across nearly 5000 addresses earning 7.1% APY, and is the third-largest staking pool currently live per Nansen. While estimates vary, once ETH 2.0 launches, the APY rewards are expected to increase significantly.

Lido’s $LDO token has been on a tear as of late, rising 54% on a 24 hour basis to $2.9 and 216% on the week — a run possibly fueled by another governance proposal that would diversify a portion of the treasury to a group of notable venture capital funds, including Delphi Digital, Digital Currency Group, Three Arrows Capital, and Alameda Research.

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More than 100,000 ETH locked for staking via Kraken in four days

More than 100,000 Ether, valued at $60 million, has already been locked up for Eth2 staking using Kraken within four days of the exchange launching the service.

Just four days after it launched its Eth2 staking service, customers of the popular U.S.-based cryptocurrency exchange Kraken have deposited more than 100,000 Ether, worth north of $60 million.

The milestone was surpassed on Dec. 8, with the exchange estimating that its staking service represents approximately 8% of all ETH staked for Ethereum 2.0 so far. Kraken estimates that its service will provide an APY of between 5% and 17%.

Kraken’s vice president of product, Jeremy Welch, stated that the exchange has “long been a supporter of Ethereum,” noting that Kraken was one of the first exchanges to list Ether in August 2015.

Welch also noted that Kraken’s ETH trading volumes are typically equivalent to between 15% and 40% of daily Bitcoin trade as of Dec. 1.

Kraken is not alone in offering Eth2 staking as a service, with Binance, Huobi, and Bitcoin Suisse all launching their own services over the past week. OKEx also expects to launch its own service by the end of month, while Coinbase will join the fray in “early 2021.”

As such, a significant percentage of staked ETH could become centralized among a handful of major exchanges.

Ethereum wallet interface MyEtherWallet has also announced the integration of staking DApp ‘Staked’. MEW users are able to stake Ether via the company’s web interface or Android wallet application. Staked’s chief executive, Tim Ogilvie, stated:

“MEW is rightly regarded as one of the original Ethereum wallets and it is only fitting that MEW users can now take advantage of our staking infrastructure to participate in Ethereum’s major upgrade.”

While the launch of Eth2’s beacon chain at the start of the month enabled staking for ETH, stakers will not be able to withdraw their tokens until Eth2 transfers are enabled — with onlookers speculating the functionality is unlikely to come online within the next 12 months.

Many stakers appear to have gravitated to third-party service providers so they don’t have to worry about incurring slashing as a consequence of disruptions to their node.

Some Eth2 validators have already complained of their Ethereum becoming locked until withdrawals are enabled without being able to earn rewards due to slashing penalties.

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