Lido, the largest liquid staking protocol, has introduced Lido v3, an upgrade designed to offer greater flexibility and composability for institutional Ether (ETH) stakers.
The update features stVaults, modular smart contracts that allow institutions to tailor staking setups, ensuring compliance and operational control, according to an announcement shared with Cointelegraph.
Lido v3 is “a major lead forward for Ethereum staking,” according to Konstantin Lomashuk, founding contributor at Lido protocol.
“A significant percentage of Lido’s TVL already comes from institutions, and demand is only growing,” Lomashuk told Cointelegraph, adding:
“Lido v3, with stVaults at its core, is built to meet this need — giving institutions more control, flexibility and direct access to tailored staking setups.”
“While it’s early to gauge full adoption, we’re seeing strong interest, and stVaults are set to play a key role in the next phase of institutional staking,” he said.
One of the stVaults’ key applications includes personalized staking setups for institutional participants that help meet compliance needs and provide operational control, including validator customization and fine-tuned deposits and withdrawal processes.
Lido is the largest liquid staking protocol, with over $25.5 billion in total value locked (TVL), accounting for over 50% of the liquid staking market on Ethereum, DefiLlama data shows.
Liquid staking TVL, Ethereum. Source: DefiLlama
Institutional appetite for Ether staking products has been growing since Donald Trump’s victory during the 2024 US presidential election, partly due to expectations of a more crypto-friendly regime in the country over the next four years.
Related: EU markets will pave the way for first Ether staking ETF: dYdX CEO
Trump administration ignites hopes of a staked Ether ETF
A Trump administration will likely embrace more crypto industry innovation, including the debut of the first staked Ether exchange-traded fund (ETF), according to Edward Wilson, an analyst at Nansen. He added:
“As the regulatory environment will likely be pro-crypto, we may even see a staked ETH ETF approved early in this new administration, which will fully leverage the benefits of ETH as an asset.”
Related: Ethereum short positions surge 500% as hedge funds bet on decline
Ether ETF issuers are also expecting regulatory approval for staking, according to Consensys founder Joe Lubin.
“We’ve been in discussions with the ETF providers, and they’re already working hard on that, so they expect that to be greenlit reasonably soon,” Lubin told Cointelegraph in reference to staked Ether ETFs.
Bernstein Research also expects Ether ETFs to soon feature staking yield under “a new Trump 2.0 crypto-friendly” Securities and Exchange Commission.
Magazine: Pectra hard fork explained — Will it get Ethereum back on track?