LidoDAO Debuts wstETH on Coinbase’s Base Network

LidoDAO, the decentralized autonomous organization governing the Lido protocol, has officially launched its Wrapped Staked Ether (wstETH) on Coinbase’s Base network. This significant development, announced on November 8, 2023, marks a new chapter in the protocol’s expansion, allowing users to trade and utilize wstETH within the Base network’s burgeoning DeFi ecosystem.

Lido, renowned for its liquid staking solutions, enables users to stake their cryptocurrencies while retaining liquidity to engage in DeFi activities. This is achieved through the issuance of derivative tokens, which represent the staked assets and can be redeemed at any time. For Ethereum, this derivative is known as stETH on the Ethereum network. To facilitate cross-network transactions, stETH is wrapped, resulting in the creation of wstETH, a double derivative token.

Prior to this official release, there was no sanctioned version of wstETH on the Base network. The gap was temporarily filled by an unofficial deployment by the Beefy Finance team, which was announced by Kyberswap on October 17. This move prompted a proposal for LidoDAO to assume control and officially endorse the token. The proposal received overwhelming support, with 597 million votes in favor and only 255 against, leading to its approval on November 2.

Marin Tvrdić, a contributor to LidoDAO, expressed the significance of this launch, stating, “The availability of wstETH on Base marks a major milestone in the journey to scaling wstETH adoption.” He emphasized the importance of expanding the protocol’s network compatibility with Layer 2 solutions (L2s) to bridge the gap between scalability challenges and the increasing demand for decentralized staking options.

However, not all iterations of wstETH have received the official nod from LidoDAO. A version launched by LayerZero, which spans across networks like Avalanche, BNB Chain, and Scroll, has been met with skepticism. Criticized for being “proprietary,” this version is still under discussion within the DAO, with no consensus or formal vote reached as of yet.

The official endorsement of wstETH on Base by LidoDAO is a testament to the organization’s commitment to ensuring secure and recognized staking derivatives across networks. It also reflects the careful governance process that underpins LidoDAO’s operations, where community consensus is paramount.

As wstETH makes its foray into the Base network, it opens up new avenues for liquidity and staking in the DeFi space. This move is not just a technical integration but a strategic one that could potentially catalyze further adoption of Ethereum and its staking mechanisms.