Ethereum’s shift to Proof-of-Stake (PoS) has revolutionized how investors earn passive income from their crypto holdings. Staking now plays a central role in securing the network and rewarding participants, but traditional staking comes with a major drawback: your ETH is locked for a set period, limiting flexibility and access to your capital.
Lido, the largest Ethereum liquid staking platform, changes that by offering a way to earn staking rewards while keeping your assets liquid. This approach has made it easier for both everyday investors and institutions to participate in Ethereum staking without giving up control of their funds.
In 2025, with Ethereum staking participation at record highs and DeFi activity rebounding, Lido has become a go-to choice for anyone seeking staking rewards without sacrificing liquidity. Whether you are holding ETH long-term or looking to maximize its utility, understanding how Lido works can help you make the most of your assets.
What Is Lido Finance and How Does It Work?
Source: lido.fi
In September 2022, Ethereum completed The Merge, transitioning from Proof-of-Work to Proof-of-Stake (PoS). Under PoS, validators secure the network by staking ETH and earning rewards. Traditional staking, most commonly done through solo staking or via custodial and exchange platforms, requires a minimum of 32 ETH to run a validator node. There are only a few DeFi options that follow the same non-liquid model. In all cases, staked assets remain locked for a set period, with withdrawals subject to exit queues and delays. While this supports network stability, it limits liquidity and prevents staked ETH from being used elsewhere during the lock-up.
Lido is a decentralized liquid staking protocol created to solve this problem. Instead of locking ETH directly with a validator, staking through Lido issues stETH (staked Ether) on a 1:1 basis with the amount deposited. The stETH balance automatically increases over time as rewards are added.
As a liquid token, stETH can be traded, used as collateral, or integrated into decentralized finance protocols while continuing to accrue staking rewards. Lido distributes staked ETH across a network of professional validators, enhancing decentralization and reducing reliance on any single operator.
What Makes Lido Finance Unique in ETH Staking?
• Liquidity Retained: Stake ETH and receive stETH, which can be traded or deployed in DeFi while earning rewards.
• Flexible Entry: Lido removes the 32 ETH minimum needed to run a validator, allowing any amount to be staked while maintaining liquidity through stETH.
• Reward Compounding: stETH balances update automatically to reflect accrued rewards.
• Broad Validator Network: Stake is spread across multiple professional validators to enhance security and decentralization.
• DeFi Integration: stETH is widely accepted in lending, liquidity pools, and other DeFi applications for additional yield opportunities.
What Drives Lido’s Liquid Staking Dominance and the Hype Around the Lido Token
Lido’s prominence this year is driven by a combination of market momentum, institutional engagement, and strategic execution.
1. Largest Ethereum Liquid Staking Platform with $38B+ TVL and 78% LDO Price Surge
LDO price surged 70% in a single month | Source: BingX Lido (LDO) Price
In 2025, Lido continues to dominate the Ethereum liquid staking market. According to DefiLlama, it currently holds the largest total value locked (TVL) of any DeFi project on Ethereum and ranks second across all chains. This leading position is supported by more than $38 billion in assets staked through the protocol. Ethereum’s price recovery has amplified interest in staking, while Lido’s integration across the DeFi ecosystem ensures that it captures a significant share of this activity. Expanding institutional participation and the protocol’s ability to adapt to shifting market conditions have further reinforced its position. These factors have contributed to a sharp rally in LDO, which has risen over 70% in the past month, reflecting renewed market confidence.
2. Institutional Growth from Ethereum ETFs, Staking ETFs, and Treasury Use
Institutional interest in Ethereum staking has been accelerating, fueled by the approval of spot Ethereum ETFs, discussions around ETH staking ETFs, and the inclusion of ETH in corporate treasury strategies. Lido’s scale, decentralized validator network, and compliance-oriented technical upgrades make it a strong candidate for institutions seeking to generate staking yield without sacrificing liquidity. The protocol’s stETH token is already supported by leading custody and trading platforms, making integration into institutional workflows more straightforward. As institutions increasingly look for yield-bearing digital assets that can also serve strategic purposes in treasury management, Lido’s market share and visibility are set to benefit.
3. Leaner Operations and Cost Optimization Strengthen Long-Term Positioning
In early August 2025, Lido reduced its workforce by 15% as part of a strategic cost optimization plan, signaling a focus on long-term sustainability and operational efficiency. Co-founder Vasiliy Shapovalov emphasized that the decision was about costs, not performance, and aimed to align operations with the priorities of LDO tokenholders. Despite the cuts, Lido has earned $44.68 million in revenue this year, exceeding its budget by 147 percent, and maintains $32 billion in TVL with around $90 million in annualized revenue. Backed by strong fundamentals and ongoing initiatives such as Distributed Validator Technology (DVT) expansion and the Triggerable Withdrawals framework, Lido continues to demonstrate its ability to innovate while preserving fiscal discipline.
How to Stake Your ETH with Lido Finance: A Step-by-Step Guide
Staking ETH through Lido offers a way to earn rewards while keeping assets liquid via stETH. The process is straightforward and can be completed in just a few steps.
Step 1: Prepare a Web3-Compatible Wallet and Access Lido
Set up a secure Ethereum-compatible wallet such as MetaMask, Ledger, or Trust Wallet. Ensure it holds the amount of ETH intended for staking along with a small reserve for gas fees. Once ready, visit Lido Staking Page and connect the wallet through the platform’s interface, verifying the site’s authenticity before proceeding.
Source: stake.lido.fi
Step 2: Select the Staking Amount
Enter the amount of ETH to be staked. The platform will display the equivalent stETH to be received along with an estimate of potential rewards.
Source: stake.lido.fi
Step 3: Confirm the Transaction
Approve the staking transaction within the wallet. Once confirmed on the Ethereum network, stETH will be issued and appear in the connected wallet.
Source: BingX
Step 4: Utilize stETH in DeFi (Optional)
stETH can be used in lending, liquidity pools, restaking, and other DeFi protocols eg. Eigenlayer to generate additional yield while continuing to accrue staking rewards.
Source: Eigenlayer
How to Trade Lido governance token LDO on BingX
Lido (LDO) is the governance token of the Lido liquid staking protocol, one of the largest DeFi projects on Ethereum. LDO is available on both the BingX Spot Market and Perpetual Futures Market, offering flexible options for traders whether building a long-term position or taking advantage of short-term market moves. BingX also provides real-time market analysis through BingX AI to help identify better trade setups.
Step 1: Search for LDO/USDT on Spot Market or Perpetual Futures Market
For Spot Trading
Go to the Spot Market on BingX and enter LDO/USDT in the search bar. Place a market order to buy instantly at the current price or set a limit order for your desired entry. Spot trading suits those aiming to accumulate LDO for the long term or hold as part of a diversified crypto portfolio.
For a full walkthrough, refer to our How to Buy LDO on BingX Guide for step-by-step purchase instructions.
Source: LDO/USDT Spot Market on BingX
For Perpetual Futures Trading
Experienced traders can use the Perpetual Futures Market by searching for LDO/USDT. Perpetual futures enable going long or short on LDO without an expiration date, allowing strategies for both bullish and bearish market conditions. Leverage can amplify potential returns but also increases risk, so careful risk management is essential.
Source: LDO/USDT Perpetual Futures Market on BingX
Step 2: Activate BingX AI for Real-Time Market Analysis
On the trading chart, click the AI icon to launch BingX AI. This tool scans price action, marks key support and resistance zones, and identifies trend direction to help spot optimal entries and avoid impulsive trades. For Lido (LDO), BingX AI also highlights recent market-moving developments, such as SEC clarity on liquid staking, which has been a key factor behind the recent price surge.
Step 3: Plan Trades with AI Insights and Market Research
Use BingX AI insights to refine entries, set take-profit levels, and adjust stop-losses. For additional context, follow Lido-related developments such as protocol upgrades, staking adoption rates, and Ethereum market performance, as these can strongly influence LDO’s price. Combining AI-driven technical analysis with informed fundamental research can improve trade decision-making.
Risks and Considerations Before Staking on Lido
While Lido offers a flexible way to earn Ethereum staking rewards, several risks should be evaluated before committing funds:
• Smart Contract Vulnerabilities: Lido operates entirely through smart contracts. A critical bug or exploit could lead to a loss of funds.
• stETH Price Deviation: Although stETH is designed to track ETH 1:1, its market price can temporarily diverge during periods of high volatility or liquidity stress.
• Validator Slashing Risk: Poor performance or misbehavior by validators can result in slashing penalties, which reduce staking rewards.
• Regulatory Uncertainty: Changing regulations may impact the availability or terms of staking services in certain jurisdictions.
• DeFi Exposure Risk: Using stETH in other DeFi protocols introduces additional risks from those platforms, including smart contract failures or liquidity issues.
Carefully assessing these factors, diversifying staking strategies, and using only the official Lido platform can help mitigate potential downsides.
Final Thoughts
Lido has reshaped Ethereum staking by offering a way to earn rewards without locking up assets, combining liquidity with network participation. In 2025, its position as the largest liquid staking platform, deep DeFi integrations, and growing institutional adoption have reinforced its role as a cornerstone of the Ethereum ecosystem.
For those seeking to maximize the utility of their ETH while participating in staking, Lido provides a proven, widely adopted solution. However, like all DeFi protocols, it carries risks that should be carefully considered before participation. Balancing its benefits with a clear understanding of potential drawbacks will ensure a more informed and sustainable staking strategy.