Leading staking service provider Lido will now support the bridging of assets to Layer 2 protocols, it announced on Twitter.
Lido allows users to stake ETH and receive staked ETH (stETH) in return. The new changes to Lido introduced wrapped staked ETH (wstETH), a token that can be bridged to Layer 2 networks Arbitrum One and Optimism, and that will accommodate ease of integration across DeFi partners while preserving the unique properties of stETH, according to Lido. Guides are offered to users, with instructions on how to wrap stETH for wstETH.
To incentivize participation, on Oct. 7, 150,000 LDO tokens will be allocated on a monthly basis to fuel wsETH rewards across partner networks, beginning with mining liquidity incentives across DeFi platforms including Beethoven X, Balancer, Curve Finance, Kyber Network and Velodrome.
Layer 2 networks Arbirtum and Optimism have seen a surge in transaction volume since they launched in 2021, with both recently peaking above 200,000 daily transactions, data from The Block Research show.
By integrating with Layer 2 networks, Lido users can avoid congestion, and high gas prices on the Ethereum network, and can instead process them on adjacent networks designed to operate alongside Ethereum. This will help manage transaction volume from the blockchain.
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