Lido, the predominant liquid staking protocol, has unveiled Lido v3, an upgrade aimed at providing enhanced flexibility and composability for institutional Ethereum (ETH) stakers. This update introduces stVaults, modular smart contracts that empower institutions to customize staking configurations, ensuring adherence to compliance and maintaining operational control.
Konstantin Lomashuk, a founding contributor of the Lido protocol, described Lido v3 as a significant advancement for Ethereum staking. A large portion of Lido’s total value locked (TVL) already derives from institutions, with demand continuing to grow. Lomashuk stated that Lido v3, with its stVaults feature, is designed to meet institutions’ needs by offering more control, flexibility, and direct access to customized staking setups. Although it is still early to evaluate full adoption, there is notable interest in stVaults, which are poised to be integral to the next phase of institutional staking.
One of the primary applications of stVaults includes personalized staking configurations tailored for institutional participants to fulfill compliance requirements and provide operational control, such as validator customization and precise management of deposits and withdrawals.
Lido holds the title of the largest liquid staking protocol, with over $25.5 billion in total value locked, representing more than 50% of the liquid staking market on Ethereum, according to data from DefiLlama.
The interest in Ether staking products among institutions has been on the rise since Donald Trump’s victory in the 2024 US presidential election, largely due to the anticipation of a more crypto-friendly administration in the coming years.
There is speculation that the Trump administration will likely embrace more crypto industry innovation, potentially paving the way for the first staked Ether exchange-traded fund (ETF). Edward Wilson, an analyst at Nansen, noted that with a pro-crypto regulatory environment, the approval of a staked ETH ETF could happen early in this administration, fully utilizing ETH’s potential as an asset.
Joe Lubin, the founder of Consensys, also hinted at imminent regulatory approval for staking ETFs, given ongoing discussions with ETF providers who are already preparing for the rollout.
Bernstein Research foresees Ether ETFs soon incorporating staking yields under a potential “Trump 2.0 crypto-friendly” Securities and Exchange Commission.
