Lido DAO: What It Is and How It Powers Ethereum Staking

When you stake Ethereum, you’re helping secure the network and earn rewards—but you usually have to lock your ETH for months. Lido DAO, a decentralized autonomous organization that manages the most widely used liquid staking protocol on Ethereum. Also known as Lido, it lets you stake ETH and get a tokenized receipt—stETH—that keeps working in DeFi while your original ETH earns rewards. This isn’t just a technical trick. It’s a shift in how people interact with blockchain consensus. Before Lido DAO, staking was for tech-savvy users with 32 ETH and a dedicated node. Now, anyone with 0.01 ETH can participate.

Lido DAO doesn’t run the staking nodes itself. Instead, it coordinates a network of trusted operators—like node providers and infrastructure teams—who handle the technical side. The DAO’s members, who hold LDO token, the governance token that gives holders voting power over protocol upgrades, fee structures, and operator selection, decide who gets to run nodes and how rewards are split. This keeps the system decentralized and resistant to single points of failure. The whole setup relies on liquid staking, a method that turns locked-up staked assets into tradable tokens, which is why you can use stETH on Uniswap, Aave, or Curve just like any other token. That’s the big difference: you’re not stuck. You earn yield and still have liquidity.

Why does this matter? Because Ethereum’s shift to proof-of-stake made staking essential—but also made it feel inaccessible. Lido DAO solved that by removing the barrier to entry. It’s now the biggest staking provider on Ethereum, with billions locked in. But it’s not perfect. Critics point to centralization risks in its operator list and the dominance of a few large players. The DAO is actively working on these issues, voting on new operators and slashing mechanisms to keep things fair. If you’re holding ETH and want to earn without running a node, Lido DAO is the most tried-and-tested option out there. Below, you’ll find real-world breakdowns of how it works, how it compares to other staking tools, and what’s really happening behind the scenes with its governance and token economics.