Back to the list

Lido Finance selects Axelar and Neutron to launch wstETH on Cosmos

source-logo  theblock.co 14 September 2023 14:05, UTC

Cross-chain smart contract platform Neutron and interoperability protocol Axelar have been selected by the liquid staking project Lido Finance to launch its wrapped liquid staked ether (wstETH) token into the Cosmos ecosystem.

More than 30 Cosmos teams have expressed interest in integrating wstETH, according to a statement. Also, Neutron and Axelar have each committed 1% of their respective network genesis supply in token incentives to build liquidity for wstETH through DeFi applications within the Cosmos ecosystem.

“We are excited to be part of the effort to bring one of the biggest liquid staking tokens, Lido’s staked ether to the Cosmos ecosystem,” Neutron core contributor Avril Dutheil said. “The collaboration between Neutron, Axelar and the Lido DAO is a great example of how blockchain projects can come together to foster innovation and seamless interoperability.”

"The cross-chain expansion of the largest liquid staking token will be secured by AXL and enhanced by full-stack interoperability,” Axelar co-founder Sergey Gorbunov added.

Once wstETH is deployed on Cosmos and cross-chain governance is established, Axelar and Neutron are expected to hand over the cross-chain deployment reins to the Lido DAO.

Lido’s liquid staking dominance

Lido Finance’s liquid staking solution allows users unlock liquidity for staked assets and use it as capital various DeFi applications in the form of a liquid staking derivative token.

Lido’s staked ether is available as a rebasing token, stETH, whose total supply adjusts. Additionally, there’s a wrapped auto-compounding token, wstETH, which automatically reinvests the rewards earned and will be used for bridging via Neutron and Axelar to Cosmos.

Currently, Lido dominates the liquid staking market on Ethereum, holding approximately 70% of the market with $14 billion in total value locked (funds deposited), based on data from The Block’s dashboard. Among Lido’s most significant liquid staking competitors, Coinbase’s TVL stands at $2.2 billion, and Rocket Pool’s is at $1.7 billion.

Lido currently supports multiple blockchains for liquid staking: Ethereum, Polygon and Solana, according to its website. It also offers wstETH bridging on the OP Mainnet and Arbitrum Ethereum Layer 2 networks.