Lido Finance: Liquid ETH Staking Guide 2026
The #1 liquid staking protocol · +150 XP · 11 min read · Updated March 2026
What is Lido?
Lido Finance is the largest liquid staking protocol for Ethereum. Instead of locking 32 ETH to run your own validator (the traditional staking requirement), Lido lets you stake any amount of ETH and receive stETH (staked ETH) — a liquid token that represents your staked ETH plus daily accruing rewards.
stETH is widely used as collateral across DeFi (Aave, MakerDAO, Curve) while still earning Ethereum consensus layer rewards. This is the core value proposition: stake and earn + stay liquid.
stETH vs wstETH
How Lido Works
When you deposit ETH into Lido: (1) Lido distributes it across a curated set of professional node operators (currently 30+ globally). (2) These operators run Ethereum validators. (3) Consensus rewards flow back to the Lido smart contract. (4) Lido takes a 10% cut (split between node operators and the DAO treasury). (5) The remaining 90% of rewards is reflected in your stETH balance daily.
Slashing risk: If a node operator misbehaves, validators can be slashed, reducing stETH value. Lido carries insurance via the DAO fund.
Concentration risk: ~31% of all staked ETH being in one protocol raises Ethereum centralization concerns.