Distributing Our Shared Security Base with Beefy x Lido
Avid readers of Beefy's articles will know that we've written many times before about Ethereum’s battle against the scalability trilemma. In short, the fundamental mission of our age is to figure out how to distribute our strong shared security and decentralization to billions of users without compromising their integrity. This mission should ultimately be at the heart of every Web 3.0 project, as we strive to bring the innovations we know and love to the mainstream.
To do this, it’s clear we need to collectively foster the development of critical infrastructure, the proliferation of collective security, and the distribution of robust decentralized assets across the thriving range of interoperable chains that make up the Web 3.0 economy. But doing so will take millions of small steps and contributions from thousands of loyal and dedicated contributors. We must remain humble enough to work together and put the greater good above our own enrichment and desires.
Today, let’s take the opportunity to explore Beefy’s latest contribution to the distribution of our shared security base through our ongoing partnership with Lido. Together, we’re helping to bring the power of liquid-staking tokens to the next 100 million users by deploying Lido’s Wrapped Staked Ether token on Base. But what does this mean for Ethereum’s security? Let’s dive in. 👇
Lido
For readers unfamiliar with their work, Lido is the dominant liquid-staking platform on Ethereum and most other blockchains (including both EVM and non-EVM-compatible chains). Since 2020, Lido has accrued an enormous 8.8 million Ether tokens (close to $14 billion at the time of writing) for deployment by its staking protocol. Its liquid-staking tokens (LSTs), such as Staked Ether, are by far the most popular and widely used in the industry, including across many different chains. And the protocol itself is the largest DeFi application when measured by total value locked.
Beefy and Lido’s longstanding partnership grew over the last few years, delivering dozens of LST vaults and products to our shared userbase and, in turn,delivering millions of dollars of liquidity into Lido and its supporting liquidity pools to encourage the proliferation of its services. Many users will be all too familiar with the streams of Lido Launchpool Boosts, which have delivered thousands of $LDO, $OP, and $ARB tokens, often lasting for months at a time.
Lido’s success is no accident, as it faces fierce competition from many other providers of staking services in each of its markets. But unlike many large-staking services, Lido manages to remain firmly decentralized and fully open source. By operating across a network of dozens of independent validators, Lido ensures its products are not solely reliant on any single service provider. And by placing all core decision-making in the hands of the Lido DAO (and its tens of thousands of tokenholders), the project attempts to maintain credible neutrality across the entire protocol.
But Lido is far from complete. With the introduction of Lido V2, and the Lido Staking Router, the project aims to become wholly permissionless as well, allowing new node operators of all shapes and sizes to freely join the network of validators and contribute to its decentralization without limitation. Beyond validators, permissionlessness is also a target for Lido’s operations, as it seeks to continue the deployment and distribution of liquid-staking technology and assets across its complex network or interoperable blockchains. And we at Beefy are proud to be stepping up to assist in this mission…
Base
Summer 2023 will undoubtedly be remembered as Onchain Summer… that is, the summer when Coinbase, while fending off capricious chastisement from the SEC, went full degen and released its own Ethereum rollup chain. Base represents a paradigm shift in the industry, as centralized exchanges acknowledge their role as a mere supporting act to the main stage of onchain activity. By delivering a low-cost and high-functioning smart contract platform to its 100 million users, Coinbase promises to reinvent its business model, with onchain activity at its heart.
Since its launch, Base has amassed over $300 million of user funds, and over 100 different applications, ranging from decentralized exchanges, to social finance, to yield optimizers. By benefitting from the Optimism Collective's OP Stack, Base arrived out of the box with rapid transactions, low costs and full final settlement onto the Ethereum blockchain - the most secure smart contract platform in existence. Its safe to say that Base has shattered all expectations.
Beefy is proud to have been leading the charge with the deployment of DeFi applications and activities on Base. As a consistent top-10 contributor to the space, we’ve been delighted to watch the rapid growth of the Base ecosystem and community. And now we’re proud to be welcoming our longstanding frens at Lido to the party…
Distributing Security
The proliferation of LST assets across different chains is important to continue strengthening our shared security base by distributing responsibility and control over staking assets to as many users as possible. As Ethereum blockspace continues to grow in demand, many users feel priced out of the market for Ethereum assets and may be unlikely to acquire LSTs if they can only do so on Ethereum. By implementing its LSTs on an increasing number of chains and applications, Lido can ensure the scalability of its products in line with Ethereum’s own scalability vision and facilitate access for users of all sizes and preferences, bypassing the limitations of mainnet.
As Lido moves to an increasingly permissionless model, it intends to continue this distribution of its open-source LST assets across as many different blockchains as can securely support them. But rather than having a single centralized team handle all of the implementation for products like Bridged Staked Ether, Lido is now seeking to rely on close allies and local chain heroes to assist in the implementation of its assets. By sharing the development work and responsibility, Lido can increase the permissionlessness of its assets and allow different chain communities to empower themselves by gaining access to LST products.
Beefy is proud to have been tapped by Lido as the local chain hero and partner for Base and tasked with deploying Lido’s Wrapped Staked Ether (wstETH) on the chain. wstETH is an ERC-20 copy of Staked Ether, which is fully compatible with smart contracts and DeFi, enabling permissionless liquidity pools, lending, bridging and, of course, yield farming for the entire Base community. And from today on, wstETH is live on Base and ready for adoption in thousands of new use cases.
Our Shared Security Base
Longstanding members of the broader Ethereum community know that the single most important collective mission of our age is solving the scalability trilemma, ensuring that Ethereum (and its rollup chains) can continue to support billions more users and trillions more transactions as our ecosystem continues to develop.
Simply put, our mission requires more of everything: more security, more blockspace, more rollups, more users, more use cases, more distribution, and more implementation. In that regard, Beefy, Lido, and Base stand together in our collective mission, aiming to help deliver more to our users and more Ethereum. Through expanding our shared security in the form of LST assets to new plains of blockspace and new ecosystems for DeFi, we hope to take one more step towards our collective destiny—to make decentralized finance the base layer for all financial activity.
So check out wstETH live on Base and access some of the best yields available on your Ether across Base’s plethora of exciting low-cost applications today. And help turn this collective mission into our reality. 🤜🤛