A16z invests $70M in Ethereum Staking provider Lido Finance


Venture capital firm Andreessen Horowitz (a16z) has invested $70 million in Lido Finance, a liquid staking provider that makes it easier to stake ether and other proof-of-stake (PoS) assets. The firm also used Lido to stake an undisclosed portion of a16z Crypto’s ether holdings on the Beacon Chain.

The Ethereum blockchain intends to change its proof-of-work validation process to PoS in the summer. It is more energy efficient and allows users to validate network transactions via temporary token deposits (or stakes) in exchange to receive rewards.
Ethereum needs to encourage ether holders to stake their tokens or a secure PoS transition won’t be possible, which is where Lido Finance comes in.
“Lido solves the competitive incentives between staking and seeking yield in DeFi. By issuing an Ethereum-native liquid token, Lido allows you to use staked ETH as collateral within DeFi in the same way you can use ETH currently,” wrote a16z Crypto’s Daren Matsuoka and Porter Smith in the announcement post.
Last summer, a16z launched a $2.2 billion crypto fund that was the largest ever for the industry until Paradigm announced a $2.5 billion fund in November.
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