A Silicon Valley-based investment firm is pouring tens of millions of dollars into a crypto project that aims to lower the costs of staking top smart contract platform Ethereum (ETH).
Chris Dixon, a top executive at venture capital titan Andreessen Horowitz, took to Twitter to tell his 812,000 subscribers that the industry leader has invested a staggering $70 million into Lido DAO (LDO), a decentralized autonomous organization (DAO) centered around staking leading altcoin ETH.
“Excited to share that Andreessen Horowitz has invested $70 million in Lido Finance, one of the easiest ways to stake ETH and other proof-of-stake assets.”
In a new company briefing, the firm explains they chose to invest in LDO because it helps reduce the strenuous financial hurdles retail investors face when staking ETH, such as the 32-token minimum to run a node, a burden centralized crypto exchange platforms have no issue handling.
“ETH has significant barriers today. Perhaps most notably, there is a 32-ETH minimum required to operate a node. This alone prevents a significant number of network users from running their own validator, and there is no native method for delegating one’s stake to circumvent these minimum capital requirements…
Because of these challenges, centralized exchanges have been best-positioned to offer staking services due to efficiencies of scale. Companies like Binance, Kraken, and Coinbase can easily pool their users’ assets (eliminating the minimum capital requirements), stake it on their behalf (eliminating the operational burden), and issue a liquid market for this staked asset (unlocking liquidity and allowing users to swap back from staked ETH to ETH).
These services are valuable for their users, creating a big opportunity for a decentralized alternative. That’s why we’re excited to invest in Lido, an effective, decentralized staking platform.
It offers one of the easiest ways to stake ETH and other proof-of-stake assets today, while striving for decentralization through the DAO’s governance. Lido democratizes staking.”
The firm’s infusion of funds sparked a rally for Lido as it is exchanging hands at $2.31 at time of writing, a 22% increase on the day.
Check Price ActionDon't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Tanawat Thipmontha/Natalia Siiatovskaia/Andy Chipus
