LidoDAO launches official version of wstETH on Base

LidoDAO took control of the deployment for a wrapped version of its flagship token, stETH, on Base.

Lido’s governing body has approved the deployment of Lido’s Wrapped Staked Ether (wstETH) to Coinbase’s Base network, according to a Nov. 8 announcement. The token is now live and can be traded or used in decentralized finance (DeFi) applications on the Base network.

Lido is on @BuildOnBase

You can now bridge your staked ETH to Base. https://t.co/JmmFeVwNnN pic.twitter.com/R9vN2XGs2g

— Lido (@LidoFinance) November 8, 2023

Lido is a liquid staking protocol that allows users to stake some cryptocurrencies while simultaneously using them in DeFi applications. It does this by issuing a derivative token that can be redeemed for the underlying staked one.

In the case of Ethereum’s native coin, Ether (ETH), the derivative token is called “Lido taked Ether (stETH),” which exists on the Ethereum network. When it is sent to other networks through a bridge, it has to first be wrapped, creating a double derivative token called “Wrapped Staked Ether (wstETH).” Before Nov. 8, no official version of wstETH existed on the Base network.

On Oct. 17, Kyberswap announced that the Beefy Finance team had deployed an unofficial version of wstETH on Base. The two teams offered a proposal for the DAO to take control and accept ownership of this version, so as to officially endorse it.

The DAO approved the proposal on Nov. 2 after 597 million votes were cast in favor of it and 255 were cast against it.

“The availability of wstETH on Base marks a major milestone in the journey to scaling wstETH adoption,” LidoDAO contributor Marin Tvrdić stated. “Expanding the protocol’s network of compatible L2s bridges the gap between scalability limitations and the growing demand for decentralized staking to benefit the broader Ethereum ecosystem.”

Although this particular deployment received support from LidoDAO members, not all versions of wstETH have been accepted as official. LayerZero launched a version of wstETH for Avalanche, BNB Chain, and Scroll that drew criticism from multiple protocols for allegedly being “proprietary.” That version is still being debated by the DAO, and no vote has yet been taken on it.