Proof-of-Stake is a powerful innovation in Web3, enabling blockchains to establish decentralized verification of data, without environmental cost. But proof-of-stake also demands users lock up some of the most valued cryptocurrency assets, limiting decentralized finance (DeFi) innovation and adoption.
Liquid staking has solved this dilemma. In short, liquid staking has enabled Ethereum users to stake their ETH to contribute to the core security of the Ethereum blockchain – without sacrificing opportunities to participate in the burgeoning ecosystem of DeFi protocols built on Ethereum.
Lido, the leading liquid-staking provider, has been at the forefront of liquid staking on Ethereum with stETH, a liquid staking token (LST) representing staked ETH. Lido has expanded beyond Ethereum, into connected layer-2 blockchains Arbitrum and Optimism. Now, with two initiatives powered by Axelar, Lido is breaking down silos and setting up stETH to expand across Web3.
Eliminating barriers that held back cross-chain adoption of stETH within the Ethereum ecosystem.
Expanding cross-chain beyond Ethereum, launching stETH for the first time in the Cosmos ecosystem.
All this is possible due to Axelar’s universal and secure cross-chain network and the ecosystem of projects and blockchains that are achieving blockchain interoperability with Axelar.
Want to learn more? Join the AMA next Monday with Lido, Kyberswap, Neutron & Squid!
Axelar, Kyberswap, Squid + Lido make it easy to bridge stETH to Arbitrum & Optimism
Currently, in addition to Ethereum mainnet, stETH is available on Arbitrum and Optimism, via native bridges. However, due to staking lockup requirements at the Ethereum protocol layer, those bridges take seven days to withdraw.
The solution is cross-chain swaps powered by Squid, a cross-chain liquidity router built on Axelar. In minutes, users can swap from Arbitrum-wrapped stETH into Optimism-wrapped stETH into native stETH on Ethereum, and back again — going wherever they are finding DeFi opportunities to use their stETH.
To facilitate these swaps, Kyberswap is setting up stETH and Axelar-wrapped wstETH (axl.wstETH) pairs on Arbitrum and Optimism. Lido is adding incentives for liquidity. This enables axl.wstETH to act as a routing asset, facilitating quick bridging between Ethereum mainnet, Arbitrum and Optimism. It’s the same way axlUSDC works for canonical USDC today.
The path is as follows:
Canonical wstETh on ARB gets swapped to axl.wstETH on Kyber on Arbitrum.
This gets bridged to axl.wstETH on Optimism.
axl.wstETH on Optimism gets swapped to canonical wstETH on Optimism on Kyber.
Native-bridged versions remain canonical on Arbitrum and Optimism. Check out Kyberswap’s announcement to learn more about the Lido-incentivized pools.
Axelar, Neutron + Lido bring stETH to Cosmos
Launched to mainnet in 2019, Cosmos became a proof-of-stake pioneer and an innovator in blockchain interoperability. The project envisioned an ecosystem of purpose-built application chains (appchains), each with its own properties, and highly interoperable. Since then, Cosmos has continued as a center of innovation in Web3.
Now, for the first time, Lido is launching stETH on Cosmos, with help from Neutron, a Cosmos-based DeFi platform. Neutron and Axelar have been selected by Lido to make this cross-chain connection.
With 30+ projects already looking to integrate, Neutron and Axelar have each committed 1% of their respective network genesis supply in token incentives to build liquidity for wstETH through DeFi applications within the Inter-Blockchain Communication Protocol (IBC) ecosystem and future expansion to other L1 ecosystems.
Lido staked ETH is available in two flavors: a rebasing token, stETH, and a wrapped, auto-compounding token, wstETH, which will be used to bridge to Cosmos. The journey of this new token begins with its bridging from the Ethereum ecosystem through Axelar to Neutron, making it available to the entire IBC ecosystem of chains including Cosmos, Cronos, Sommelier and major DeFi protocols such as Osmosis and dYdX.
This initial bridging is just the start of the journey for wstETH on Cosmos. Once wstETH has been deployed on Cosmos and a cross-chain governance implementation has been developed, Axelar and Neutron will hand over ownership, administration, and management of the bridge to Lido DAO.
If accepted by governance, the Lido DAO will be able to upgrade the bridge contracts on the Neutron network, for example, to switch or add bridge providers to the solution, providing greater control to the Lido DAO to upgrade the bridge to further security and reflect its long-term vision for stAsset bridging.
Follow Axelar on Twitter to stay up-to-date with news as Lido, Neutron and Axelar work to launch stETH into the Cosmos 🚀
Lido, stETH and the Cross-Chain Future of Liquid Staking Tokens
Axelar is secured by proof-of-stake, with validators and stakers providing security permissionlessly using the AXL token. That’s why it’s so exciting to work with a project like Lido that has done so much to advance proof-of-stake and DeFi.
There’s a great deal of innovation happening in Web3 and Axelar’s mission is to make sure that users anywhere can access all of it securely and easily. Here’s to seeing where Lido will go next!
Looking to start building with Lido and others in the Axelar ecosystem? Join Axelar Discord!