Lido DAO

Purpose and Utility

Lido DAO is a liquid staking protocol that allows users to stake their ETH without maintaining infrastructure or locking up assets. The LDO token serves as a governance token, giving holders voting rights over protocol parameters and upgrades.

Business Model Analysis

The protocol generates revenue through a fee on staking rewards. Users deposit ETH and receive stETH tokens that represent their staked position. These tokens can be traded or used in DeFi while the original ETH remains staked.

Real-World Adoption

Lido has become the largest liquid staking protocol with over $19 billion in Total Value Locked (TVL) as of 2024. It controls approximately 32% of all staked ETH in the Ethereum network.

Platform Development

The protocol shows strong development activity with regular updates and improvements. The DAO actively governs protocol changes and parameter adjustments through a transparent voting process.

Token Distribution

LDO tokens were distributed as follows: 64% to investors and team (with vesting), 36% to the DAO treasury. Vesting schedules and lock-up periods were implemented to prevent early dumping.

Revenue Model Evaluation

The primary concern from an Islamic finance perspective is that Lido's core business model revolves around staking, which involves earning rewards that could be considered similar to interest (riba). Additionally, the stETH tokens are commonly used in DeFi lending protocols, which typically involve interest-bearing activities.