Exploring the Evolution: The Future of Staking in Ethereum’s Ecosystem

Explore the evolution of Staking in an interesting session at REDeFiNE TOMORROW 2024. Meet Konstantin Lomashuk @Lomashuk (Co-founder of @LidoFinance) who will be discussing "Exploring the Evolution: The Future of Staking in Ethereum's Ecosystem" with Tom Menner @tmenner (CTO of SBI Digital Markets @SBI_DAH).

"Lido" - A Liquid Staking Platform Built for ETH Staking

•  Konstantin Lomashuk began the session by explaining that staking is a process that helps increase security in the consensus algorithm on blockchain technology. In Ethereum, each node requires 32 ETH to run the process of creating blocks and maintaining network security.
  
• Lido is a liquid staking platform created to combat the centralization of Ethereum in 2020. Lomashuk and the co-founders of Lido believed that without professional validators, the market could be controlled by centralized actors such as exchanges.

• Lido acts as middleware, connecting investors with those who want to validate nodes, eliminating risks through smart contracts and decentralized autonomous organization (DAO) operations.

• Lido introduced liquid staking, a staking solution that allows users to stake their ETH and receive liquid staking tokens (stETH) in return. These tokens can be used in various DeFi applications while the original ETH remains staked.

Lido's Main Mission: Decentralizing Ethereum

• Currently, Lido has over $30 billion in staked ETH and about 28% of validators use this middleware. Lido's main mission is to keep Ethereum decentralized and censorship-resistant.
  
  
• Lomashuk believes that the restaking market can be leveraged with various large-scale DeFi systems. However, he emphasizes the importance of Lido minimizing risks and providing maximum staking rewards to users.
  
  
• Lido is a DAO where all code updates are done through voting with smart contracts by LDO token holders. He mentions the importance of building Lido's research capabilities to ensure informed decision-making.
  
  
• Lomashuk expresses concerns about the potential for centralization in Ethereum if a large amount of ETH is staked by centralized entities like Coinbase. He believes that reducing rewards to set a specific staking ratio could harm the decentralized market.

"Cybernetic Economy" - An Economic System to Improve Lives

• Lido's roadmap, as outlined in the “Gus” proposal, focuses on three main areas: increasing stETH adoption, supporting decentralized validator sets and improving governance to reduce risks.
  
  
• Lomashuk emphasizes the importance of increasing security and decentralization. He sees Ethereum as a public good that creates value for everyone through a “cybernetic economy,” an efficient economic system driven by AI, blockchain, and other innovations to improve people's lives and accelerate progress.
  
  
• Lomashuk also discusses his investment firm, “Cyber Fund,” launched in 2023 to allocate funds to companies and projects that contribute to the development of a stronger decentralized cybernetic economy.

Summary

Lido focuses on decentralization and security, aligning with the overall goal of developing and managing world-changing technologies like Ethereum and AI in an open, transparent, and beneficial way for humanity.

Lido remains committed to its core mission of maintaining Ethereum as a decentralized, secure, and censorship-resistant system for the benefit of all users, even as Ethereum continues to evolve and staking systems become more complex.

To learn more about Lido you can learn more at their website or watch the session’s recording on Youtube: Exploring the Evolution: The Future of Staking in Ethereum’s Ecosystem