On February 11, Lido @LidoFinance, the largest liquidity pledge protocol on Ethereum, announced the V3 version upgrade and launched the StVault pledge vault for institutional users;
Just two days later (February 13), asset management giant 21Shares submitted the staking function of the Ethereum ETF to the SEC. The close connection of the timeline has to make me guess: Lido should have known the regulatory trend in advance, and this V3 upgrade is to take over a compliant channel for ETF staking traffic. #LDO #ETH #ETF
Regarding the principle of Lido ($LDO ), please refer to an article I wrote before, and I will not repeat it here.
🔷Core of Lido V3 Upgrade: StVault
StVault is a modular staking vault where users can customize their desired ETH staking method by setting specific staking parameters, with three upgrade points.
1. Institutional-level customization
Allow users to independently choose node operators and configure verification infrastructure
Support switching between custodial/non-custodial modes to meet different compliance needs of institutions
Achieve asset isolation through StVault, ensuring control over funds
2. Risk reserve (RR)
When minting stETH, part of the assets must be reserved as a risk buffer pool; users cannot mint stETH at a 1:1 ratio and must leave a portion as reserves
But users own the earnings from that portion of stETH
3. Leverage staking
For advanced stakers, StVault provides tools to implement leverage staking strategies aimed at obtaining higher staking rewards - either manually or controlled by smart contracts
🔷Who will benefit from the V3 upgrade?
1. Compliance for institutional investors
• Customized StVault can meet internal risk control audit requirements
• Batch staking channels can reduce some operational friction costs
• Achieve asset transparency and control through StVault
Although institutions have previously participated in Lido staking, there has not been such a large-scale influx of ETH assets into the staking market.
2. Node operators directly targeting the B-end market
• Directly connect to institutional large-scale staking demands
• Develop differentiated verification service packages (e.g., hardware configuration solutions)
• Participate in excess return sharing model
3. Asset management institutions will have more play options
• Design secondary market derivatives with ETH ETF as the underlying asset
• ......
🔴Summary and Forecast
If Ethereum ETFs are approved for staking, conservatively estimating based on the current management scale of $10.069 billion for Ethereum ETFs, approximately 150,000 to 200,000 $ETH will enter the staking market through compliant channels.
As Lido, with a market share of over 28%, leads the protocol space, its first-mover advantage in modular architecture and institutional-friendly design with the V3 version may make it the biggest competitor for compliant staking at Coinbase - its StVault may upgrade to become the preferred method for ETF underlying staking assets in Lido, further consolidating Lido's dominance in the LSD track.
