Ethereum hostage solution Lido Finance has raised $70 million from venture capital giant Andreessen Horowitz in the protocol’s first funding round since May 2021.
A spokesman for the venture capital firm stated that Andreessen Horowitz’s investment in Lido aims to further support the implementation of decentralized stakeholder solutions for Ethereum 2.0. Ethereum 2.0 represents a major shift in the network consensus algorithm through the introduction of Proof of Stake (PoS) certification and other upgrades that could improve scalability and lower fees. The transition to Ethereum 2.0, which began in November 2020, is still ongoing.
According to Andreessen, ether (ETH) staking has significant barriers due to the high threshold for a node to operate. In order for users to become full validators, they must be able to share at least 32 ETH, which is worth over $90,000 at current prices.
Andreessen said that in addition to investing in Lido, they will buy some of the ETH assets in the BNB Beacon Chain through the protocol. “Participating in Lido removes many of the operational complexities that institutional investors have faced,” the venture capital firm said.
Ethereum-affiliated BNB network Beacon Chain recently registered its 300,000th validator, according to industry data. At the time of writing, approximately 9.7 million ETH is held, with a total value of over $27.1 billion.
While terms like Ethereum 2.0 and Eth2 are still widely used in the industry, the Ethereum Foundation announced in January that it would be phasing out those terms. Instead, he now refers to the original Ethereum blockchain as the “execution layer” and the PoS chain as the “consensus layer.”
Founded in 2020, Lido Finance offers a floating rate solution for Ethereum 2.0 that allows users to participate in ETH without limits and minimum deposits. As mentioned in Cointelegraph, Lido also supports other coins, recently adding Kusama Liquid Staking.
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In May 2021, Lido completed a $73 million funding round led by crypto venture capital firm Paradigm. Three Capitals, Alameda Research, Digital Currency Group and Alameda Research also contributed.