The decentralized autonomous organization (DAO) enhances the monumental impact on Ethereum (ETH), which is a leading smart contract platform, says a widely followed crypto analyst.
The pseudonymous host of Coin Bureau who goes with the name Guy in a new video update told his two million YouTube subscribers that the liquid stacking protocol lido finance would eventually become Ethereum’s true governance protocol.
“Simply put Lido Finance allows you to store and stake proof-of-stake cryptocurrencies without locking them, which means you can freely trade them while you continue to stake the currency. A brief description of how it works is that whenever cryptocurrency is purchased through Lido Finance, the protocol provides the user with a tradeable token, this token further acts as a receipt for the crypto that is staked.
Lido DAO (LDO) is an ERC-20-based token, the local asset of Lido Finance, which can be used to vote and participate in the decentralized organization’s activity; the token was launched in January 2021 with a maximum distribution supply of one billion.
Lido’s DAO can probably regulate the second largest crypto asset according to market cap as there is a high demand for liquid stacking on the platform.
“For the governance vector, if Lido Finance continues to grow at a steady rate, it has the potential to become Ethereum’s true governance layer as soon as the proof of stake transition of the cryptocurrency completes.
This is because if 100% of ETH staking in the Beacon Chain is done via the Lido Finance, Lido DAO will have an amazing impact and a lot of influence on Ethereum.
The Lido Finance team believes this is necessary because of the need for liquid staking. The current estimate is that the protocol will account for 50% of the total share of ETH in the coming months.
Lido Finance accounts for 32% of the total ETH invested in the beacon chain as shown by Etherscan, furthermore, the beacon chain is considered to be the backbone of the proof-of-stake consensus mechanism of Ethereum.
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