Lido Finance Integrates stETH into BNB Chain for Cross-Chain Expansion in DeFi
- Lido Finance has incorporated stETH into BNB Chain, which is its first cross-chain initiative.
- The integration uses Axelar and Wormhole to bridge $23 billion of TVL to BNB.
- Lido remains the leading DeFi protocol with $25.94 billion in TVL and 1 million validators.
In a groundbreaking move, Lido Finance has decided to merge its staking Ethereum (stETH) into the BNB chain, making it the first cross-chain venture for the platform. This decision, determined through a community vote in the Lido Decentralized Autonomous Organization (DAO) on August 9, represents a significant milestone as Lido ventures beyond the Ethereum ecosystem to connect with a layer 1 blockchain.
Expanding Utility and Reach in DeFi
This integration, made possible by leveraging Axelar and Wormhole as primary bridging solutions, opens up opportunities for Lido to interact with one of the top five chains by Total Value Locked (TVL), broadening its utility and reach within the decentralized finance (DeFi) sector.
Lido Finance continues to dominate the Ethereum staking market, holding a significant portion of ETH net deposits at 28.2%.
The Impact of Liquidity Staking in DeFi
Lido’s liquidity staking protocol, which allows users to earn yield while maintaining the flexibility to move or trade their staked assets, has been instrumental in the DeFi landscape. Unlike traditional staking that locks funds for a specific period, liquidity staking with Lido involves depositing ETH to receive stETH, an interest-generating token redeemable at a 1:1 ratio against the underlying asset.
As per DefiLlama data, Lido’s liquidity staking protocol contributes $26.227 billion to the total DeFi ecosystem value of $83.782 billion, reinforcing its position as the largest DeFi protocol. With the integration into the BNB Chain, Lido is poised to further enhance its influence and operational scope in the DeFi industry.
