Lido agrees to approve staking router model – Here’s what that means

• The community voted largely in support of the model to increase the protocol’s security.
• Active addresses increased while development activity fell.

About 99.94% of votes involved in Lido Finance’s [LDO] staking router model proposal clicked the “yes” button in favor of the proposal, based on the snapshot made available to AMBCrypto at press time.

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A new model for multiple parties

Lido proposed the staking router model proposal with the aim of improving the Distributed Validator Technology (DVT) on its mainnet. By definition, the DVT is a way to assign responsibilities across multiple parties on the blockchain.

The function of this feature is to increase security and reduce the risk of failure on the blockchain.

The liquid staking project noted that if approved, there would be diversification of Lido Node Operators on Ethereum [ETH].  A Node Operator refers to an entity or individual responsible for validating transactions on the network.

With respect to the objectives of the staking router model, Lido stated:

“The module would have the rewards share set at 10%, with 2% allocated to the treasury fee, and 8% to the module fee via for participating Node Operators and DVT providers.”

For a while, Lido Finance has established itself as the top protocol out of all the known Ethereum liquid staking protocols. Liquid staking allows users to lock cryptocurrencies on a Proof-of-Stake (PoS) blockchain while maintaining flexibility and liquidity.

Proof of stake is a consensus mechanism in blockchains. The mechanism is a way to decide which user validates new blocks of transactions. In turn, the users earn rewards.

Rising liquidity and active users

According to Dune Analytics. Lido’s staking Annual Percentage Rate (APR) has been increasing since 17 October. The increase means that the adjusted liquidity deposited into Lido has improved.

Source: Dune Analytics

In the interim, Santiment showed that Lido’s development activity decreased. Development activity tracks the commitment shown by developers with respect to improving the network of a protocol.

At press time, Lido’s development was down to 4.21. This implies that there were not many codes published toward keeping the Lido network at its full functionality. However, the condition of the active addresses was not the same as the development activity.

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Active addresses measure the number of distinct users participating in transfers within a network. When active addresses increase, it means crowd interaction is high. On the other hand, a decrease in the metric implies a fall in speculation and active trading.

As of this writing, Lido’s active addresses have increased to 1856. The increase implies a surge in participation around staking and token exchange on Lido.

Source: Santiment