Plain English
Lido is the largest ETH liquid-staking protocol, issuing stETH as a 1:1 representation of staked ETH that accrues yield via daily rebases. LDO is the governance token controlling node-operator selection, fees, and treasury. Critically, LDO does not entitle holders to staking revenue directly.
How it actually works
Users deposit ETH; Lido distributes it across a curated set of node operators; stETH is issued to depositors. Rewards accrue via stETH rebases (~3.5% APR in 2026). 10% of staking rewards flow to the protocol — half to node operators, half to the DAO treasury. The Lido v3 upgrade enables stVaults — customizable validator configurations including for institutional clients.
What it means for you
LDO is governance-only with limited direct cash flow rights. For HNW positioning, the easier play is owning stETH itself (direct staking yield) rather than LDO. LDO is more interesting if you believe Lido governance becomes a strategic asset for ETH stakers seeking influence over validator selection.
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