Liquid Staking and DeFi’s Bullish Resurgence with Lido

Of course. Yes. Shout out. I guess. So people So yeah, I guess including as well as sleep. This is a experience. So leave your comments questions. So question. Go ahead. If this isn't uh obvious already that everything we say in this live stream or any live stream is not financial advice and everyone must do their own research before making any investment or trading decisions. With that said, let's jump into the topic for today. So I would say that most people who participate in the crypto economy or crypto space are already very familiar with the idea of staking more broadly which is of course when you lock up your tokens in a protocol or a blockchain in order to contribute to the network or blockchain in some way often by providing security such as in the case of proofofstake networks like Ethereum and in return you get some additional tokens that are paid out to you. That's a very simplified version, of course. But over the last couple of years, a new way to stake has exploded in popularity. It's been around for a little while, but it's gotten much more popular recently, which is liquid staking, led in part by the LTO liquid staking protocol, which just so happens to be today's guest. Now, in 2025, liquid staking is as big as it's ever been, and investors are looking, constantly looking for new ways to leverage their assets and not be constrained by traditional staking mechanisms. Combine this with the resurgence of interest in DeFi, a still growing institutional appetite for crypto and the enticing yields offered by staking, a changing regulatory landscape that is becoming increasingly more cryptofriendly. And you have what looks like it could be the perfect storm for an even bigger explosion in interest and market growth. I of course am nowhere near an expert on staking, liquid staking or institutional investment, but thankfully I am joined today by somebody who is Kane Gilbert. Our guest for today is the head of institutional relations at the LTO Ecosystem Foundation and he'll be walking us through the ins and outs of liquid staking, how traders and investors can benefit from it, the future of DeFi, and where institutions fit into all of this. So, thank you so much for joining us and perhaps you can introduce yourself, a little bit about your background and how you got into the crypto space and how you ended up at Lido. And hope I'm saying that correctly. It's one of those names that I read all the time. Lido. Uh, Lido. Leido. I'm assuming it's Lido. But, uh, yeah, maybe you can tell me if I'm also saying that correctly as well. No, Jonathan is perfect. Lido is correct. Um, yeah. So, again, thank you so much for hosting. You're very kind. Um but in terms of myself and my background so I've been in crypto for around nine years. Um started my career in Deote doing FS capital markets consulting on crypto. Um I think that was back 2015 2016. So I would said the technology at the time was quite nent. A big part of my job in Deote was kind of educating people that blockchain is a technology and bitcoin is a use case. So a lot of what we did back then for predominantly banks would have just been proof of concept projects. Um so I spent a year in Deote doing that. After my time in Deote I joined consensus. So I was there for around five and a half years mainly working on Metam Mask institutional and Fura staking tokenization and a couple of other projects. After my time in consensus I joined a small startup for a while doing portfolio and risk management for crypto funds. And now currently I'm at Lido where I'm head of institutional relations and I lead Lido institutional. So effectively our mandate as a team is to help grow institutional adoption of STE. So by that I mean different crypto funds, asset managers, hedge funds, really anyone who has a significant amount of ETH. So we encourage them to stake it with Lido for the added benefits of liquidity and capital efficiency. And this is obviously quite relevant at the moment given for example what's happening with the withdrawal queue right now. I think it's something in the region of 40 days and there's definitely a premium right now on liquidity. So, it's an exciting time to be talking about Ste and Lido and all the great work the team behind the scenes is doing right now. Yeah, thank you so much for that introduction. Uh, somebody was saying sounds like I sound like AI. I can guarantee you I am not AI, but I will take it, I guess, as a compliment in a way that my uh voiceover skills have gotten good enough that people think that I'm just a bot talking rather than rather than a human. Um, yeah. So, why don't we start with the basic fundamentals? I think a lot of people listening are probably again generally familiar with liquid staking, but I'm sure there are people that are not. So can you just give us you know high level overview like what is liquid staking? How does it differ from regular staking and then where does Lido fit into the picture? Sure. So yeah if you take a step a step back and you look at native staking which is obviously super important for Ethereum in terms of securing the network. So you take your ETH you lock it away and as a reward for securing the network you're given staking rewards in return. Um the issue for a lot of retail and institutional clients is that you're effectively locking up capital and you're getting a relatively small return in the sense of 3%. So for a lot of retail and institutions that's not attractive from a capital efficiency perspective. And then of course the second big issue with native staking is you're locking up that capital and when you want to withdraw it could take in the region of around 40 days to get your money back. And like everyone probably knows on this call, a lot can happen in one day in crypto, let alone 40 days. And this is effectively where Lido and liquid staking was born. And Lido was really born to I suppose drive and address two issues. The first is to drive decentralization for Ethereum and to make sure that Ethereum remains decentralized. And the second was to address the issue of around liquidity and capital efficiency. So effectively if we were to kind of simplify the process for liquid staking right now a user would be able to go on the lido website um stake their true lidos middleware and then on the back end it's distributed across a network of 800 different node operators and in return for you staking true lidos middleware um you're given ste or st in return and you can think of ste as a certificate of deposit and that basically represents two things one the ETH you just staked and to the staking rewards that will be generated. What's really cool about ste is that you can deploy it into defy um use it as collateral in lending markets or two you could use it on centralized exchanges and again use as collateral or borrow against it. So from a capital efficiency point of view, instead of you getting just 3% for staking yields, depending on how creative you want to be or how I suppose high up on the risk curve you want to be from maybe a looping perspective, you could generate much higher returns. And in terms of the second point around liquidity, what's quite cool is that you can instantly get out of your position if you want to swap ste into stables. So again, you don't have to go through that 40 plus day withdrawal queue. The moment you want to get out of your position, h you can instantly swap ste into stables because we have a significant depth of liquidity there. And this depth to liquidity is being discussed quite heavily right now from say an ETF perspective where obviously conversations are really picking up in the US around staking being added to ETFs and depth to liquidity is one of the big requirements that these asset managers and issuers look at. So you were saying there some of the things that you can do that you can take your steath and you can use it as collateral. So let's say that I am a average retail trader. Uh let's say I'm two average retail traders and both of them put I don't know one ETH 5 ETH something like that into Lido. They get their steath. What is like uh maybe an example of a low risk play that I could do to capitalize on uh that that uh liquid staking token that I've received. And then for somebody who's uh willing to take maybe more of a higher risk like what are some things like a specific thing I could do to try to leverage that liquid staking token? Sure. So I would think the easiest kind of option if someone wants to just kind of stake their ETH get ste on the earn tab of Lido. So this is a new product that basically got launched I think over a month ago now where these are effectively earn vaults where you can deposit ETH ste into these vaults and generate higher returns. So you can kind of think of these vaults as like a blue chip strategy. So currently at the moment we have two vaults um Lido GGB and then Lido DBB. Um, so the Lido Golden Goose vault, I think, has a TVL of around 160 170 million. Um, but the API is enhanced, so it's closer to, I believe, 6%. And then the Lido DVB vault, um, has a TVL of around 80 million and then the APR is closer to 5% or 4.5%. So in terms of if you want to just have a simple approach simply going on the lighter website exploring the earn tab you'll see two blue chip strategies right there that you can get involved with quite easily and then on your other point of maybe a more advanced user um I think the most prevalent topic right now for ste is from a looping perspective um for me personally it's not something I would I would do but in it's effectively a case of you go you st your ETH you're given ste in return like I mentioned you could go um to a borrow against your steath um for ETH and then effectively repeat that process of looping and staking and looping and staking um to generate higher returns. So you could potentially loop this let's say seven times eight times and this would allow you to get higher returns. One thing I should say that's really cool about using ste as collateral for these different types of strategies is that you're using an asset that's always generating an underlying yield of 3% as collateral. So if you were to compare that to say using USDC as a stable coin or even unstake ETH as collateral, you're not generating that underlying 3%. So it's not as efficient from a a capital efficiency perspective. Yeah, that's that I think that's one of the what you just said there is one of the selling points of liquid staking just more broadly is getting the dual benefits of both the native staking yields. I know like LA for example has a a small fee that they take from that but generally speaking the benefit of the native staking yields and then being able to take that asset that you're you're get in return that liquid staking token in the case of Lido that's ste we're talking about Ethereum and then being able to do other things with it. So you're you're not just getting the benefit of using a token as collateral and you're not just getting the benefit of staking, but you're getting the benefit of both staking and being able to leverage an asset in some uh some way to generate more income or yield for yourself. Yeah, exactly. So uh I want to highlight a question here from bare market bully who is asking whether market volatility has any impact on uh liquid staking. Um so I suppose the short answer would be yes. Um, obviously it's quite interesting that what happened over the past kind of weekend