Lido

You send ETH to the Lido contract and get the same amount of stETH back. Lido pools the deposits into 32 ETH validators and hands them to node operators, who run the machines but never hold the withdrawal keys: withdrawal credentials point to a Lido contract, so an operator can go offline or get slashed but cannot walk off with the ETH. Rewards flow back through an oracle report once a day, and your stETH balance goes up accordingly.

The fee is 10% of rewards, not of principal, split between the operators and the DAO treasury (Lido docs). In February 2026 tokenholders re-priced the curated module so the treasury's effective cut rose from 4.96% to 6.11% of rewards, which shifted money from operators to the DAO rather than raising what stakers pay (Lido tokenholder update).

Who gets the stake is decided by staking modules, and this is where Lido has changed most since 2024:

Sources for the CSM row: The Block on the 2024 activation and Lido's CSM v2 post from 2 October 2025. The practical point: calling Lido's operator set simply curated is no longer accurate, but calling it permissionless would be wrong too. At most about one ETH in twenty can sit with operators nobody vetted.

Getting out has two routes. Selling stETH on Curve, Uniswap or a centralised exchange is instant and priced by the market. Requesting a withdrawal from the protocol pays ETH at the protocol's own rate but you wait in Ethereum's validator exit queue, which has ranged from under a day to weeks depending on how many validators across the whole network are leaving.

stETH is the receipt for ETH staked through Lido. It rebases: the number of tokens in your wallet changes every day to reflect rewards (and, rarely, penalties). That makes it easy to read but awkward for contracts and some tax systems, so Lido also issues wstETH, a wrapped version whose balance stays fixed while each token becomes worth more stETH over time. wstETH is the form that bridges to layer-2 networks and most lending markets.

Scale is the whole story with this token. On 27 September 2026 the stETH contract reported about 9.8 million stETH in supply (Etherscan), and DefiLlama put Lido's total value locked at roughly $26.4 billion (DefiLlama). That depth is why stETH is the default collateral form of staked ETH in lending protocols and why large holders can exit without moving the price much in normal markets.

The peg is a market price, not a promise. In June 2022, before Ethereum allowed withdrawals at all, stETH traded as low as about 0.93-0.95 ETH as Celsius and Three Arrows Capital unwound positions and pulled liquidity from the main Curve pool (CoinDesk). Nobody's stETH was lost, but anyone forced to sell took the discount. Today the protocol withdrawal queue puts a floor under the price for anyone who can wait.

On regulation: on 5 August 2025 the SEC's Division of Corporation Finance said that liquid staking of the kind it described, and the receipt tokens it produces, do not in its view involve the offer and sale of securities (SEC press release). It is a staff statement, not a rule, and it depends on facts and circumstances. stETH was the obvious case it covered.

Lido went live on Ethereum on 18 December 2020. It was started by Konstantin Lomashuk (founder of staking operator P2P Validator), Vasiliy Shapovalov and Jordan Fish, the trader better known as Cobie (Messari). A $73 million round led by Paradigm followed in May 2021.

Formally the protocol is governed by Lido DAO, meaning holders of the LDO token voting on-chain. The DAO has no corporate wrapper of its own. Day-to-day work is funded through two Cayman Islands foundation companies that the DAO approved in early 2025 (Snapshot in January, on-chain Vote #184 in March): Lido Labs BORG Foundation for protocol research and development, and Lido Ecosystem BORG Foundation for institutional partnerships and wstETH expansion (governance forum). Shapovalov is executive director across both, and Lido says the foundations hold no meaningful LDO and work grant-to-grant (February 2026 update).

The lack of a wrapper has had legal consequences. In Samuels v. Lido DAO, a federal judge in California ruled in November 2024 that the DAO could be treated as a general partnership and that Paradigm, a16z and Dragonfly could be liable as partners because they took part in governance (Davis Wright Tremaine). The case, a claim that LDO was an unregistered security, is still before the court (CourtListener docket).

The biggest governance change in years is Dual Governance, activated on 30 June 2025 through Vote #214. Before it, LDO holders alone could change the protocol that stETH holders' money sits in. Now stETH holders can lock their tokens in an escrow contract to delay DAO decisions they object to, and if opposition is large enough, leave before the change takes effect. LDO still proposes and votes; stETH holders get a brake, not a steering wheel.

Lido has also shrunk its footprint deliberately. Lido on Solana stopped taking deposits on 16 October 2023 because it did not earn enough to cover costs (Lido blog), and Lido on Polygon wound down with front-end support ending on 16 June 2025 (Lido blog). Today Lido is an Ethereum staking protocol, with wstETH bridged outward.

Lido V3 went live on mainnet on 30 January 2026 after testnets and a mainnet soft launch (Lido blog). Its core piece is the stVault: a separate contract where an institution, a rollup or an operator picks its own validators, fee terms and policies, and can still mint stETH against the ETH in the vault. The vault owner carries the risk of its own operators; stETH minted from it has to stay overcollateralised.

The rollout was staged. Phase 2 opened on 29 January and permissionless minting (Phase 3) on 2 March 2026. Day-one users included Linea and Nansen, after a year of testing with operators such as Chorus One and P2P.org (The Block). To seed adoption, Lido cut its infrastructure fee on vaults from 1% to 0% until 31 March 2026 for vaults above 250 ETH.

Around V3 Lido has built a product shelf that did not exist in 2024: Lido Earn vaults (about 61,000 ETH by late February 2026), the EarnETH and EarnUSD MetaVaults launched in March 2026, and a WisdomTree exchange-traded product holding about $36 million (February 2026 update). The same update cut the DAO's 2026 revenue forecast from $53.9 million to $40.6 million after the ETH price fell to around $2,000, and floated automated LDO buybacks of up to $10 million a year.

For a plain stETH holder, V3 matters mainly as added surface area: stETH can now be minted by vaults with their own operators, so the token's backing depends on more contracts than it did before 2026.

The contracts have not been exploited and stETH holders have not lost principal to a protocol failure. What the record does show is a steady run of operator-level events, each absorbed without touching holders:

The two design choices behind that record are worth knowing. Oracle reports need a quorum of five out of nine members, so one stolen key (as in May 2025) cannot push a false rebase (CoinDesk). And in the CSM, the operator's bond is first loss, which is exactly what happened in March 2026 (The Crypto Times). In the curated module there is no bond; compensation depends on the operator paying, as Launchnodes did (Lido post-mortem).

The structural risk is concentration. Lido reported 23% of all staked ETH in February 2026, and a May 2026 update put it at 20.8%, down from 24.1% in December 2025 (Phemex summary). The share has fallen from about 28% in early 2024 mainly because treasury companies and ETFs now stake directly, not because stake left Lido. For the network it is still one governance process deciding where about a fifth of validation goes. Our card on the protocol explains how we weigh that: Lido protocol review.