Ether Staking Service Lido Granted 1M Optimism Tokens to Incentivize Wrapped Staked Ether Adoption
Ethereum liquid staking protocol Lido Finance has been awarded 1 million optimism (OP) tokens to help scale the adoption of wrapped staked ETH (wstETH) across the Optimism ecosystem.
The move is part of a broader plan. Last year, Lido said it will reward staked ether (stETH) liquidity providers on Arbitrum and Optimism with a cumulative 150,000 LDO tokens, Lido’s governance token, to attract users to the service.
Optimism is a speedy and low-cost blockchain that works atop Ethereum, helping to scale the network. Liquid staking refers to the exchange of staked ether for tokenized versions of ether that can be used in decentralized finance (DeFi) applications such as Lido. Uses range from using these tokens as collateral for loans or margin trading to earning yields of up to 6% as of Wednesday.
Lido and Optimism aim to increase the availability of wrapped staked ether (wstETH) with OP tokens through the new liquidity mining and user incentives program. wstETH is a tokenized version of ether equal to the value of ether locked by a user on Lido.
“Liquid staking tokens are an essential money lego for the DeFi ecosystem,” Jacob Blish, head of business development at Lido, told CoinDesk in a statement. “The value of wstETH on Optimism is that it further democratizes access to liquid staking for those who do not want to pay or cannot afford to pay mainnet fees.”
Starting Wednesday, the program will see 1 million OP tokens distributed over a six-month period.
Lido will also continue to supply LDO rewards for these pools as part of the LidoOnLayer2 – a separate initiative that rewards users who use tokenized ether for applications on other blockchains.
Lido and Optimism plan to distribute these OP tokens as rewards for liquidity providers on decentralized exchanges Beethoven X, Curve, KyberSwap, Uniswap and Velodrome. Additional rewards are planned for wstETH usage on lending and borrowing such as Aave.
Layer 2 networks such as Optimism are increasingly popular entry points into the Ethereum ecosystem. As of Wednesday, Optimism has over $800 million worth of tokens locked up, DeFiLlama data shows.