Following a November 8 announcement, Lido's governing body has authorized the deployment of Lido's Wrapped Staked Ether (wstETH) to Coinbase's Base network. The token is now live and can be traded or utilized in decentralized finance (DeFi) applications on the Base network.
Lido is a liquid staking protocol that allows users to stake cryptocurrencies while still using them in DeFi applications. It does this by issuing a derivative token that can be redeemed for the underlying staked asset.
For Ethereum (ETH), the derivative token is called "Lido staked ETH (stETH)" and exists on the Ethereum network. When stETH is sent to other networks via a bridge, it must first be wrapped, creating a double derivative token called "Wrapped Staked ETH (wstETH)." Until November 8, there was no official version of wstETH on the Base network.
On October 17, Kyberswap announced that the Beefy Finance team had deployed an unofficial version of wstETH on Base. The two teams proposed that the DAO take control and adopt ownership of this version in order to officially endorse it.
LidoDAO members voted overwhelmingly in favor of deploying wstETH to Coinbase's Base network on November 2. The proposal passed with 597 million votes in favor and 255 votes against.
LidoDAO contributor Marin Tvrdić called the deployment a "major milestone" in the journey to scale wstETH adoption. He said that expanding the protocol's network of compatible L2s will help to bridge the gap between scalability limitations and the growing demand for decentralized staking.
Not all versions of wstETH have been accepted by the DAO. LayerZero launched a version of wstETH for Avalanche, BNB Chain, and Scroll, but this version has been criticized by multiple protocols for being "proprietary." The DAO is still debating this version of wstETH, and no vote has yet been taken on it.
