Lido is now in Layer 2 solutions, Arbitrum and Optimism, and to assign 150,000 LDO tokens in rewards per month from October 7 for wstETH on each network.

According to Lido, expanding its services to layer 2 blockchains would improve the accessibility of Ethereum staking while lowering gas fees.

Unlike traditional staking, where participants cannot withdraw until their staking period ends, Lido Finance is a liquidity staking platform that provides flexibility to stakeholders. It allows participants to withdraw their staked tokens whenever they want.

The first phase of Lido’s Layer 2 implementation enables Lido’s Wrapped Staked Ether (wstETH) token to be connected to the two supported L2 networks, while preserving the unique properties of stETH in the process.

stETH is the liquid Ethereum staking token that Lido gives to stakers when they stake. On the contrary, wstETH is the wrapped version that guarantees a fixed balance of stETH to use in decentralized finance (DeFi) applications that require a constant balancing mechanism.

With plans to issue the 150,000 LIDO tokens as rewards, the protocol said the goal behind this initiative is to generate wstETH liquidity for liquidity mining incentives at DeFi partners including Beethoven, Balancer, Curve, Kyber Network, and Velodrome.

In particular, Lido’s plan to expand into L2 networks was initially revealed in July, when the team admitted that much (if not most) economic activity and transaction volume would migrate to both general-purpose and special-purpose Layer 2 networks in the future.

Also, the two Layer 2 networks that Lido chose to implement first to have an 80% market share between them. According to L2beatArbitrum leads with a 50.68% market share and $2.38 billion in total value locked (TVL), followed by Optimism with a 30.68% share and $1.44 billion TVL.

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