Lido Finance Picks Axelar and Neutron to Bring wstETH to Cosmos
Lido stETH (STETH) coins falling from the sky. STETH cryptocurrency concept banner background.
Liquid staking project Lido Finance has opted for the cross-chain smart contract platform Neutron and the interoperability protocol Axelar to bring its wrapped liquid staked ether (wstETH) token to Cosmos. The goal of the partnership is to increase wstETH’s liquidity in the inter-blockchain protocol ecosystem and pave the way for its adoption in additional L1 markets.
LIDO Finance and the Growing Appeal of Liquid Staking
Axelar is a full-stack interoperability layer that enables blockchain as a new sort of development platform by connecting multiple networks into a single “Internet of blockchains.” This is especially relevant in light of the rising popularity of LIDO Finance and liquid staking. On the other hand, Neutron is a market-leading platform for cross-chain smart contracts. Together, the Cosmos Hub’s security and this innovative cross-chain platform enable DeFi apps to safely scale across the growing network of 51+ interconnected blockchains.
The staked ETH equivalent of Lido Finance’s liquid staking token, LDO/USD, has a market valuation of $13.8 billion. More than 30 projects have expressed an interest in integrating with its current initiative.
Axelar and Neutron are expected to hand over the responsibility of cross-chain deployment to Lido DAO once wstETH has been deployed on Cosmos and upon the formation of cross-chain governance. If approved, the Lido DAO will be allowed to upgrade Neutron network bridge contracts.
“The cross-chain expansion of the largest liquid staking token will be secured by AXL and enhanced by full-stack interoperability,” Axelar co-founder Sergey Gorbunov said.
As part of the Cosmos ecosystem, both Neutron and Axelar have pledged to set aside 1% of their genesis supply for token incentives, creating a market for wstETH through DeFi use cases. Liquid staking is presently supported on various blockchains by Lido. There are two distinct types of staking tokens: stETH, a rebasing token, and wstETH, a wrapped, auto-compounding token that will serve as a bridge to the Cosmos network.
One of the strongest areas of DeFi is liquid staking, which allows investors to earn returns on their digital assets. Lido Finance’s liquid staking solution provides users with a liquid staking derivative token that can be used to unlock liquidity for staked assets and as capital in a number of other DeFi applications.