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Lido Finance has integrated wrapped Ethereum (wstETH) into BNB Chain, Ethereum L2 Scroll, and Avalanche (AVAX) through LayerZero. According to LayerZero, wstETH will function as an Ominichain Fungible Token (OFT) through this integration.
Positive Developments at Lido
OFTs are expandable token contracts that enable interaction between blockchains and eliminate the need for additional wrapped tokens. LayerZero also stated that the integration of Lido’s wstETH seemed like a perfect fit due to its widespread adoption and DeFi compatibility with the stETH token. In addition to these reasons, this development also appeared to be in line with Lido’s trend of expanding onto different chains. As a Liquid Staking Derivative (LSD) project, Lido emphasized its leadership authority in the industry.
For example, when looking at the Total Value Locked (TVL) rankings for LSD, Lido was found to be at the top. As of the time of writing, DeFiLlama showed a TVL of $15.97 billion, representing a 17.58% increase in the past 30 days. TVL measures the value of assets staked or locked in a protocol. An increase in TVL indicates more liquidity entering the system, which can indicate an increased market player confidence.
Decline in Lido Metrics
On the other hand, a decline in metrics indicates caution in the distribution of capital to the protocol. The current TVL situation for Lido is consistent with the previous one. Additionally, there was an opportunity to discuss development with the BNB Chain team. During a quick conversation, the team acknowledged that the integration was an exciting development and stated:
We are thrilled to invite Lido, one of the most popular protocols in the industry, to the BNB Chain ecosystem through LayerZero’s bridging infrastructure. By including native wstETH in BNB, we provide our users with increased accessibility, decentralization, and a simplified DeFi experience.
Dune Analytics data showed that wstETH liquidity pools on various Ethereum bridges have recently gained significant attention. For example, wstETH and stETH bridged through Loopring, Arbitrum (ARB), and Optimism (OP) have experienced significant growth since October 2022.
