Lido Launches Cross-Chain Ethereum Staking Solution Using Chainlink Technology

TLDR:

Lido integrates ChainLink's CCIP for live ETH on Arbitrum, Base, and Optimism Users can now access ETH from L2 networks and receive wstETH in a single transaction Integration includes ChainLink data feeds currency rates and automation for liquidity management New system eliminates the need for manual linking or direct staking feature of third-party exchanges Forward to Other networks may be expanded.

Lido, a leading provider of liquid storage, has launched a new chain-keeping feature powered by Chainlink's Cross-Chain Interoperability Protocol (CCIP). The integration will allow users to receive ETH from the layer-2 networks Arbitrum, Base and Optimism in return for wrapped ETH (wstETH).

The new live staking feature turns the process of staking ETH from Layer-2 networks into a single transaction. Prior to this integration, users had to trade ETH for wstETH on third-party platforms or connect ETH to the Ethereum mainnet, which could take up to seven days.

ChainLink's CCPI technology enables this streamlined process through a programmable Token Transfer function. This system allows both tokens and instructions to move across different blockchain networks in a single transaction, creating a user-friendly experience.

The Direct Staking system offers users multiple methods to save ETH depending on their cost and speed preferences. In the first approach, users participate in the layer-2 network, and their ETH is sent to Ethereum via CCIP with specific instructions. The smart contract receiving contract holds the ETH in Lido contracts on the Ethereum mainnet, and the resulting wstETH is returned to the user's layer-2 wallet address.

The second method allows users to deposit ETH on the Layer-2 network and receive wstETH from a liquid pool. This process uses an exchange rate feed to distribute the correct amount of wstETH. Stored ETH is then sent to Ethereum via CCIP via fixed instructions, and the resulting wstETH fills the pool.

Lido's integration includes additional Chainlink services beyond CCIP. The system uses Chainlink Data Feeds to track the exchange rate of wstETH on Ethereum, ensuring accurate redemption rates. ChainLink Automation helps manage liquidity by scheduling cross-chain ETH transfers at scheduled intervals.

Jakov Buratović, Lido's Defi master, explained that this new approach improves liquidity and supports cross-chain interoperability on Layer-2 networks. He emphasized that the merger is consistent with Lido's goal of making liquidity more accessible while maintaining decentralization.

The implementation works with existing methods without requiring changes to the lido core protocol or wstETH token deployment. This design choice can be extended to other layer-2 and optional layer-1 networks in the future.

Security played a key role in Lido's Chainlink CCIP selection. The protocol features defense-in-depth security and operates through ChainLink's decentralized blockchain network, which holds more than $16 trillion in on-chain transaction value.

Johan Eide, Chief Business Officer of ChainLink Labs, pointed out that the integration will allow users to access liquid stocking tokens in areas with low fees and fast execution. He pointed out that liquid staking tokens are becoming important to the DeFi economy and making them accessible on multiple chains will support growth in the chain economy.

Several DeFi platforms have already adopted the live staking feature, including XSwap, OpenOcean and Interport. This early adoption shows growing support for cross-chain solutions in the DeFi ecosystem.

Lido continues to run its core protocol on the Ethereum mainnet, where users can convert their reserved ETH positions into liquid wstETH tokens for use across DeFi applications. The new cross-chain capability extends this functionality to Layer-2 networks, where users can benefit from reduced transaction costs.

The integration represents a technical advance to make staking more accessible across various blockchain networks. For users who want to access ETH from layer-2 networks, it removes the previous hurdles that required multiple steps and long waiting times.

Chainlink's comprehensive platform Lido provides integrated solutions for data, computing and cross-chain communication. This integrated approach helps ensure reliable operation of the new stacking system across multiple networks.

The live staking feature maintains compatibility with existing wstETH deployments while adding new functionality. This design allows users to choose their choice of earning wstETH based on their individual needs and preferences.