Lido
Lido (Lido Finance) is a liquid staking protocol, not a swimming pool or beach. It lets you stake ETH without running your own validator or locking up the usual 32 ETH minimum: you deposit ETH and receive stETH, a token that represents your staked ETH plus accruing rewards and that you can trade, lend or use across DeFi while the underlying stake keeps earning. The protocol is non-custodial and pools deposits across a curated set of professional node operators, and it is governed by holders of the LDO token through the Lido DAO. It went live on Ethereum in December 2020 and became the largest liquid staking provider by staked value.
What Lido is: liquid staking, not a lido
In crypto, “Lido” means Lido Finance, a liquid staking protocol — not the open-air swimming pool the word usually refers to. Normally, staking ETH means either running a validator with a 32 ETH minimum or locking your coins where you cannot touch them. Lido removes both frictions: you deposit any amount of ETH into its smart contracts and receive stETH, a token that tracks your stake and the rewards it earns. Your ETH is staked through a curated set of professional node operators, while the stETH in your wallet stays liquid — you can hold, trade or use it elsewhere. The protocol is non-custodial and governed by holders of the LDO token via the Lido DAO.
How Lido staking and stETH work
When you stake with Lido you get stETH at roughly a 1:1 rate to your deposited ETH, and your balance rebases to reflect staking rewards over time (wstETH is a wrapped, non-rebasing variant used in many DeFi apps). Because stETH is a liquid token, people use it as collateral, in lending markets and in liquidity pools while still earning the underlying staking yield — the core appeal of “liquid” staking versus locking ETH directly. Lido spreads deposits across many node operators rather than a single one, which reduces reliance on any single validator, and it has expanded staking to other networks over time. To convert back, you either redeem stETH for ETH through Lido's withdrawal queue or sell it on the open market.
Is Lido safe?
Lido's contracts are heavily audited and, as of this writing, the protocol has not suffered an exploit that drained user deposits. Because it is non-custodial, no company holds your ETH directly. That said, liquid staking carries risks that are not hacks. Smart-contract risk is inherent to any DeFi protocol. Slashing and validator risk: if node operators misbehave or go offline, staking penalties can reduce returns, which is why the operator set is curated and Lido maintains cover mechanisms.
The most visible episode was a market discount, not a protocol failure. In June 2022, during the Terra, Three Arrows and Celsius unwinding, stETH traded several percent below ETH as large holders (notably Celsius) sold into thin liquidity. stETH's peg is not guaranteed in real time — it reflects supply and demand and the withdrawal queue — so it can trade at a discount under stress even though each stETH remains redeemable for ETH once withdrawals process. A separate concern often raised is concentration: because Lido stakes a large share of all ETH, some in the community watch its size for staking-centralization reasons.
Incident record
No security incident on record as of 2026-09-28 — we checked and found none, which is not the same as never having one.
In our ratings
Where we score Lido against its peers on open data. The number lives there, not here.
Frequently asked
Is Lido safe?+
Lido's smart contracts are heavily audited and it is non-custodial, and as of this writing the protocol has not been exploited to drain deposits. The real risks are not hacks: smart-contract risk, validator slashing that can trim returns, and the fact that stETH can trade below ETH under market stress, as it did in June 2022. Each stETH still redeems for ETH once withdrawals process.
What is the difference between ETH and stETH?+
stETH is the liquid staking token you receive when you stake ETH with Lido. It represents your staked ETH plus accruing rewards and stays usable across DeFi, whereas plain ETH is not earning staking rewards. You can redeem stETH for ETH through Lido's withdrawal queue or trade it, though its market price can drift from ETH under stress.
Did stETH depeg?+
In June 2022 stETH traded several percent below ETH as large holders such as Celsius sold into thin liquidity during the Terra and 3AC collapse. This was a market discount, not a protocol exploit: each stETH remained backed by staked ETH and redeemable once withdrawals were enabled. The gap later closed.
What changed
- 2026-09-28Profile created: what Lido liquid staking is (disambiguated from the swimming-pool sense), how stETH works, and the safety picture — no deposit-draining exploit on record, with slashing, smart-contract and the 2022 stETH market discount documented.