Lido developers unveil details of a new protocol version

The Lido Finance team announced the rollout of a new version of its platform for liquid staking.

Today Lido contributors are proud to present Lido V2 — Lido’s largest upgrade to date and an important step towards further decentralization. https://t.co/SDxlxCgMNq pic.twitter.com/KJewhEp8rV

— Lido (@LidoFinance) February 7, 2023

According to the developers, the upcoming upgrade will be the largest in the protocol’s history, representing an important step toward decentralization.

Lido V2 is centered around two major upgrades:

1) Staking Router: A new modular architecture that allows anyone (incl. solo stakers) to become a Node Operator.

2) Withdrawals: An upgrade allowing stETH holders to withdraw directly from the Beacon Chain.https://t.co/SDxlxCgMNq

— Lido (@LidoFinance) February 7, 2023

Key components of Lido v2:

• Staking Router — a new modular architecture that enables market participants, including solo stakers, to become node operators;
• Withdrawals — holders of stETH will be able to unlock the underlying asset — ETH — from the Beacon Chain (this capability will appear after the Shanghai hard fork scheduled for March).

Staking Router:

A major protocol upgrade that transforms the operator registry into a modular and more composable architecture.

With SR, Lido becomes a platform where stakers, developers and NOs can collaborate and drive the future of a decentralized Ethereum together. pic.twitter.com/ZvdCKLCZmZ

— Lido (@LidoFinance) February 7, 2023

“Thanks to the staking router, Lido becomes a platform where stakers, developers and node operators can interact and jointly steer the future of a decentralized Ethereum,” the developers said.

Project participants said that the ability to withdraw stETH from staking and receive ETH in exchange will positively affect user experience and the DeFi sector as a whole.

Withdrawals:

Enabling stakers to unstake their stETH and receive ETH at a 1:1 ratio.

Withdrawals for staked ETH will provide a smoother staking experience for users and boost the usability of stETH across the DeFi space.

For more info: https://t.co/XN4AZwtBIh pic.twitter.com/V9zltf2ER5

— Lido (@LidoFinance) February 7, 2023

Security audits are already underway. The next steps before deploying the second version will be a vote in DAO on the proposed innovations, as well as launching the system on the Goerli test network in early March.

Lido leads the DeFi Llama ranking with a TVL of TVL of $8.47 billion.

Earlier, Ethereum developers launched a testnet to test withdrawals of ETH from the Beacon Chain.