In the fast-evolving world of decentralized finance (DeFi), few protocols have maintained both dominance and controversy quite like Lido Finance. Once the undisputed leader in Ethereum staking, Lido saw its influence wane in early 2024 as the rise of restaking captured investor attention. Yet, recent developments suggest that Lido’s core fundamentals are stronger than ever—despite market turbulence and regulatory uncertainty.
This article explores why, beneath the surface volatility, Lido is poised for a resurgence driven by structural advantages, strategic alliances, and shifting dynamics in the restaking ecosystem.
The Rise and Relative Fall of Lido in 2024
At the start of 2024, Lido faced headwinds. The explosive growth of restaking platforms like EigenLayer shifted capital away from traditional staking models. Investors flocked to new protocols promising lucrative future airdrops, leading to a wave of ETH outflows from Lido and a sharp decline in the LDO token’s value against ETH.
For months, LDO underperformed relative to ETH—a trend amplified by growing concerns over centralization. By late 2023, Lido controlled nearly 33% of all staked Ethereum, triggering alarm bells across the community. That threshold is significant: it represents the point at which a single entity could theoretically influence consensus under certain attack scenarios.
However, instead of resisting change, Lido adapted. Its share of staked ETH has since dipped to 29%, a level many consider more sustainable and less threatening to network decentralization. While this reduction eased community tensions, it also created space for innovation—particularly at the intersection of staking and restaking.
👉 Discover how leading DeFi protocols are shaping the future of yield generation.
Restaking Revolution: A Challenge—or Catalyst?
Restaking emerged as one of 2024’s most transformative trends. Protocols like EigenLayer, ether.fi, Renzo, Puffer, and Kelp rapidly amassed billions in total value locked (TVL), despite not yet generating real yields. Their appeal? The promise of future token airdrops.
But here's where the narrative begins to shift: while EigenLayer pioneered the concept of "cryptoeconomic security" through restaking, its model requires users to deposit directly into non-Lido validators—effectively bypassing Lido’s ecosystem.
Enter Symbiotic, a new restaking protocol that launched its mainnet just weeks ago and has already attracted over $300 million in deposits. Backed by top-tier investors including Paradigm and cyber·Fund—an early contributor to Lido DAO—Symbiotic stands out not just for its credibility, but for its deep integration with Lido.
Unlike EigenLayer, Symbiotic doesn't pull capital away from stETH. Instead, it enables stETH to be reused within a restaking framework, preserving liquidity while expanding utility.
Mellow Finance: The Lido-First Restaking Gateway
Launched alongside Symbiotic, Mellow Finance acts as a restaking vault manager and has been officially recognized as the first member of the so-called “Lido Alliance.” This strategic positioning signals a formal collaboration between emerging restaking infrastructure and Lido’s established dominance.
Mellow’s model is distinct:
- It uses a custodial deposit approach, where restaking operators act as delegates for liquid staking tokens (LSTs).
- This allows seamless conversion of stETH into liquid restaking tokens (LRTs), reducing liquidity risk.
- In contrast to EigenLayer’s model—which requires users to exit stETH to participate—Mellow keeps capital within the Lido ecosystem.
This design offers two major advantages:
- Lower friction for existing stETH holders
- Enhanced risk-adjusted returns due to superior market depth and liquidity
Because Lido controls 60% of the LST market, stETH enjoys unmatched trading volume and DeFi integrations. When users re-stake via Mellow, they retain exposure to both Mellow points and Symbiotic积分 (Symbiotic Points)—effectively doubling their potential airdrop eligibility compared to single-protocol restaking.
Meanwhile, many EigenLayer-aligned projects have already distributed initial tokens, diluting future rewards. Mellow, by contrast, remains an untapped opportunity—making it one of the most compelling yield farms of 2025.
👉 Learn how next-gen DeFi strategies are redefining passive income in crypto.
A Bullish Feedback Loop: Capital Returns to stETH
As awareness grows around Symbiotic and Mellow, a powerful feedback loop is forming:
- stETH holders re-stake through Mellow → earn dual rewards
- Increased demand for stETH → upward pressure on price and liquidity
- Higher stETH adoption → greater share of total staked ETH
- Network effects reinforce Lido’s dominance
If this cycle gains momentum, we could see Lido’s market share rise for the first time in two years—not despite restaking, but because of it.
And unlike pure-play restaking protocols that rely solely on speculative incentives, Lido generates real revenue. With over $30 billion in ETH under management and a 10% fee on staking rewards (yielding ~3% APY), Lido earns approximately **$1 billion annually**.
At a current P/E ratio of around 23x, LDO appears undervalued—especially when compared to high-growth tech stocks or other DeFi blue chips. This becomes even clearer when considering:
- Recurring revenue from fees
- Deep integration across DeFi (Uniswap, Aave, Curve, etc.)
- First-mover advantage in liquid staking
- Strategic positioning in the restaking era
Regulatory Headwinds: A Temporary Setback?
In May 2025, the U.S. Securities and Exchange Commission (SEC) named Lido’s stETH as an unregistered security in its lawsuit against Consensys. While concerning, this designation applies broadly to liquid staking tokens and doesn’t immediately alter Lido’s operations.
Importantly:
- The legal battle will likely take years to resolve
- No enforcement action has been taken directly against Lido
- Global adoption continues unaffected
Rather than signaling doom, this moment may represent a local bottom for LDO sentiment. Long-term investors are increasingly viewing regulatory overhangs as priced-in risks—not existential threats.
FAQs: Addressing Key Investor Questions
Q: Is Lido centralized?
A: While Lido once approached 33% of total staked ETH, its current share is around 29%. Additionally, node operators are distributed across hundreds of validators, and governance is community-driven via the Lido DAO.
Q: Can Lido compete with EigenLayer?
A: Not by direct confrontation—but through integration. By enabling stETH to participate in restaking via partners like Mellow and Symbiotic, Lido leverages its scale rather than fighting against new trends.
Q: What makes stETH safer than other LSTs?
A: stETH has the deepest liquidity, widest DeFi integration, and longest track record. Over $1 billion in daily trading volume ensures minimal slippage and reliable pricing.
Q: Will restaking hurt Lido’s revenue?
A: On the contrary—it may boost it. More use cases for stETH increase demand, which can support higher fees or expanded services without sacrificing user adoption.
Q: Is now a good time to buy LDO?
A: Fundamentals suggest yes. With strong cash flow, growing ecosystem partnerships, and renewed capital inflows, LDO appears positioned for long-term growth despite short-term volatility.
Looking Ahead: A New Chapter for Lido
The fear that restaking would marginalize Lido has given way to a more nuanced reality: Lido is evolving into the foundation layer for next-generation crypto primitives.
Even if Symbiotic thrives and stETH approaches 33% again, enforcing a hard cap would require broad social consensus—an outcome that seems increasingly unlikely given the protocol’s embedded role in DeFi.
Ultimately, Lido isn’t just surviving the restaking revolution—it’s helping lead it.
With robust fundamentals, strategic alliances, and a resilient economic model, Lido’s bullish case has never been stronger.
👉 Explore cutting-edge DeFi opportunities built on Ethereum’s most trusted staking layer.