8.3/10

Lido Protocol

Strongranked 2 of 4 in defi protocols◆ Sources checked · 27 Sept 2026

Operationally excellent and structurally contentious. No stETH holder has lost principal to a protocol failure; the concern is the share of Ethereum validation it intermediates, still mostly through operators approved by LDO governance. A permissionless module capped at about 5% of stake and, since 30 Jun 2025, a stETH-holder brake on governance have narrowed that concern without removing it.

Best for: Scale and integration, with the concentration question attached

Company file: Lido, owners, incidents →

How this score was reached

8.3 is the weighted average of the five pillar findings below. Does the job well with no material unresolved concerns.

Custody & Security35%: 7.8
Cost & Fee Transparency15%: 8.2
Regulation & Legal Standing5%: 6.2
Performance & Reliability35%: 9.0
Access & Support10%: 8.6

Strengths

No loss of user funds at very large scale
Deepest secondary liquidity of any staking receipt
stETH holders can delay governance decisions they object to (Dual Governance, since Jun 2025)

Against it

Intermediates about a fifth of staked ETH, a network-level concern
Operator set still mostly curated; the permissionless module is capped at about 5% of stake
V3 stVaults mean stETH now depends on more contracts than before 2026

Operationally excellent, structurally contested

The protocol has no loss of user funds on record at very large scale, and stETH has the deepest secondary liquidity of any staking receipt. Operator-level slashings in 2023 and 2026 were absorbed by the operators without touching holders.

The objection is about the network rather than about you: about a fifth of staked ETH is routed by one governance process. Two changes have narrowed it. Since 30 Jun 2025 Dual Governance lets stETH holders delay LDO decisions and leave before they take effect, and the permissionless Community Staking Module, live since October 2024, may hold up to 5% of stake. The large majority still sits with operators LDO holders approved.

Frequently asked questions

Is Lido a risk to Ethereum?+

That is the substance of the concentration argument — a large share of validation routed through one protocol reduces network decentralisation regardless of how well it is operated. It is a network-level concern rather than a reason to expect you personally to lose money.

Who chooses Lido’s validators?+

Mostly LDO governance: the curated module, which holds most stake, uses operators it approves. Since 25 Oct 2024 the Community Staking Module lets anyone run validators against a bond, capped at 5% of stake, and since January 2026 V3 stVaults let vault owners pick their own operators.

Has Lido ever lost user funds?+

No. There is no loss of user funds on record. stETH traded at about 0.93–0.95 ETH in June 2022, before withdrawals were possible; holders who sold took that discount, and the withdrawal queue now puts a floor under the price.

Assessed by

By Emily Volker

Editor-in-Chief · September 27, 2026

◆ Disclosure

CoinRadar Daily is a non-commercial project. We have no commercial relationship with Lido Protocol, earn nothing from any link on this page, and carry no advertising or sponsorship anywhere on the site. Findings rest on public sources; we did not open an account or transact.

Rubric v2.0How we score →

The rest of the defi protocols table

01Uniswap ProtocolPool contracts with no admin key over funds, at the largest scale8.9
02Lido Protocol — you are hereScale and integration, with the concentration question attached8.3
03MakerDAO / SkyThe longest continuous operating record of any DeFi protocol8.0
04Aave ProtocolActively risk-managed lending, if you check which collateral others may post7.9