The developers behind Lido, the largest staking service on Ethereum, have proposed an innovative revamp of the staking platform that introduces modular ‘vaults.’ This new framework aims to enhance the staking experience and accommodate the diverse needs of both individual and institutional investors.
The proposed ‘stVaults’ are designed as customizable components that allow Lido to cater to institutions and more complex staking strategies. This evolution signifies a substantial upgrade from Lido’s original offerings, which allowed investors to pool their ether (ETH) and stake their crypto, thus securing the network in exchange for interest.
Lido has been a pioneer in liquid staking, granting users a receipt for their deposits known as Lido staked ETH (stETH). This feature has made entering and exiting staking positions as straightforward as trading stETH tokens. With the introduction of stVaults, Lido seeks to expand the capabilities of this system, providing a more tailored solution for a variety of staking requirements.
According to a press release shared with CoinDesk, Lido V3’s stVaults are described as “modular smart contracts designed to meet the diverse and evolving needs of Ethereum participants.” This upgrade heralds the potential for more sophisticated staking configurations, enabling institutional stakers to create personalized setups, node operators to attract high-volume stakers, and asset managers to explore new staking use cases.
This shift reflects the growing interest from financial institutions in Ethereum staking, as they explore ways to integrate yield-generating crypto products into their portfolios. The introduction of stVaults is intended to accommodate this interest, allowing for modular building blocks that address varied staking needs and preferences.
Konstantin Lomashuk, the founder of the Lido staking protocol, remarked, “What is important to understand with customizable infrastructure, is that you can in general build even more complex products.” This customizable approach aims to position Lido as a foundational layer for Ethereum staking, emphasizing its neutral infrastructure that can be utilized by everyone for staking, restaking, or leveraging their assets to enhance liquidity.
The vision for Lido V3 includes transforming the platform into an “open staking marketplace.” Users will have the freedom to select their preferred staking setups according to their objectives and risk profiles, marking a significant shift from Lido’s previous one-size-fits-all methodology that provided the same staking experience and interest rates for all users.
By aligning itself closer to other modular decentralized finance (DeFi) products, such as Morpho and Symbiotic, Lido is set to enhance its utility for restaking—an area where ETH can be restaked to secure other protocols in addition to Ethereum. Lomashuk elaborated, “You can restake your stVault. Liquid restaking tokens can utilize this infrastructure to grow the APR.”
On Tuesday, a group of core developers formally presented Lido V3 to the Lido DAO, the decentralized autonomous organization governing the protocol. If the DAO approves the proposal, Lido V3 could be operational on Ethereum’s mainnet as early as the third quarter of 2025.
“Now it’s a new phase,” stated Lomashuk, hinting at an exciting future for Lido and its users.
To learn more about Lido’s developments, read the full announcement here: Lido Co-Founder Teases ‘Second Foundation’ for Ethereum Amid Community Backlash
