Andreessen Horowitz invests $70M in Ethereum staking protocol Lido

Published at: March 3, 2022

Ethereum staking solution Lido Finance has raised $70 million from venture capital giant Andreessen Horowitz, marking the protocol’s first funding round since May 2021. 

Andreessen Horowitz’s investment in Lido is intended to further support the adoption of decentralized staking solutions for Ethereum 2.0, a spokesperson for the venture capital firm said. Ethereum 2.0 marks a significant shift in the network’s consensus algorithm by ushering in the adoption of proof-of-stake (PoS) and other upgrades that could enhance scalability and reduce fees. The transition to Ethereum 2.0, which began in November 2020, is still ongoing.

Excited to share that @a16z has invested $70M in @LidoFinance, one of the easiest ways to stake ETH and other PoS assets, and we used Lido to stake a portion of our ETH holdings on the Beacon chain. More from @DarenMatsuoka & @_PorterSmith: https://t.co/vc2tzDJ3mS

— cdixon.eth (@cdixon) March 3, 2022

According to Andreessen, staking Ether (ETH) has significant barriers due to the high threshold for operating a node. To become a full validator, users must be able to stake at least 32 ETH, which is worth over $90,000 at current prices.

In addition to investing in Lido, Andreessen said it’s staking a portion of its ETH holdings on the Beacon Chain through the protocol. “Staking with Lido removes many of the operational complexities that institutional investors have faced,” the venture firm said.

Ethereum's Beacon Chain recently registered its 300,000th validator, according to industry data. At the time of writing, nearly 9.7 million ETH had been staked for a total value of over $27.1 billion.

Although terms like Ethereum 2.0 and Eth2 are still widely used in the industry, the Ethereum Foundation announced in January it would ditch such terminology. Instead, it 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 liquid staking solution for Ethereum 2.0, allowing users to stake their ETH with no lockups or minimum deposits. As Cointelegraph reported, Lido also supports other tokens, having only recently added Kusama liquid staking.

More staking options arrive as we get closer to Ethereum 2.0. @Ledger has announced a partnership with @LidoFinance in a move that could make $ETH staking more accessible. https://t.co/SgGZTWyRhF

— Cointelegraph (@Cointelegraph) August 16, 2021

Related: Ethereum hash rate scores new ATH as PoS migration underway

Lido concluded a $73 million funding round in May 2021 that was led by crypto venture capital firm Paradigm. Three Arrows Capital, Alameda Research, Digital Currency Group and Alameda Research also contributed.

Tags
Business
Andreessen Horowitz
Proof-Of-Stake
Related Posts
Chainalysis raises $100M in Series E funding led by Coatue
Blockchain analytics company Chainalysis has secured $100 million in Series E financing, bringing its total valuation to a staggering $4.2 billion and highlighting once again the tremendous growth of the cryptocurrency industry. The round was led by global investment manager Coatue, with additional participation from 9Yards Capital, Altimeter, Blackstone, GIC, Pictet, Sequoia Heritage and SVB Capital, Chainalysis announced Thursday. Chainalysis said the funds will go toward expanding its blockchain data capabilities, which includes investing in new data tools, software and APIs. “We believe blockchain data is the asset that can help public and private sector organizations understand the risks and …
Business / June 24, 2021
Privacy protocol’s dogged focus on untraceable coins and anonymous communication
In a battle of animal-themed cryptocurrencies, a bullock-branded, anonymity-focused protocol is making the case that it is faster, safer and cleaner than the shiba inu-faced joke coin that became a top 10 cryptocurrency this year, largely on the strength of Elon Musk’s memes. Animals aside, the Oxen privacy coin does have some reason to compare itself with market darling Dogecoin. Speed, for one. While DOGE’s block time is one minute compared to OXEN’s two, Oxen can use what it calls Blink technology, which is the default setting for OXEN to make the transactions nearly instant. On top of that, Oxen …
Technology / June 28, 2021
Nearly 6% of Kyber’s Token Supply Staked in One Day
$16.7 million worth of decentralized finance (DeFi) liquidity protocol Kyber Network’s KNC token have been locked up in staking within 24 hours of the service’s launch. The milestone was noted by Kyber co-founder Loi Luu, who tweeted to announce that nearly 10.5 million KNC had already been staked. Hype for the launch drove a major rally over the months leading up to the staking commencement, with the price of KNC more than tripling against the dollar since late-April. However, KNC has posted a 10% price retracement since topping out roughly one week ago. KNC/BTC since launch: Coin360 Kyber’s network also …
Business / July 9, 2020
Blockstack's Proof of Transfer Would Have Miners Pay BTC to Mint Stacks
Blockstack unveiled a novel consensus mechanism for piggyback blockchains called Proof of Transfer (PoX) on Feb. 6. Instead of relying on its own proof of work, miners under PoX commit Bitcoin (BTC), which circulates in the ecosystem. The system will be used in Blockstack’s proposed Stacks 2.0 blockchain, which is set for release later in 2020. The Proof of Transfer mechanism was devised to piggyback on the security of Bitcoin, while allowing complex interactions between stakeholders within the Stacks ecosystem. Cointelegraph spoke with Muneeb Ali, Blockstack’s CEO, to learn more about the proposed mechanism. Not a sidechain There are several …
Technology / Feb. 12, 2020
Ethereum may now be more vulnerable to censorship — Blockchain analyst
Ethereum’s upgrade to proof-of-stake (PoS) may make it more vulnerable to government intervention and censorship, according to the lead investigator of Merkle Science. Speaking to Cointelegraph following the Ethereum Merge, Coby Morgan, a former FBI analyst, and the Lead Investigator for crypto compliance and forensic firm Merkle Science expressed his thoughts on some of the risks posed by Ethereum’s transition to PoS. While centralization issues have been broadly discussed leading up to The Merge, Moran suggested the prohibitive cost of becoming a validator could result in the consolidation of validator nodes to the bigger crypto firms like Binance, Coinbase, and …
Decentralization / Sept. 16, 2022