Lido, the largest liquidity staking protocol on Ethereum, is expanding beyond Ethereum (ETH) with the launch of new products designed specifically for stablecoin holders.
The project on Thursday launched an improved version of its earnings product Lido Earn, which now revolves around two vaults: EarnETH (for Ethereum-based assets) and EarnUSD (for stablecoins). The goal is to make it easier for users to earn cryptocurrency returns without having to choose or manage a strategy themselves.
Simply put, a vault is a pooled investment vehicle where users can deposit cryptocurrencies and the platform automatically deploys these funds into different strategies designed to generate returns.
The new EarnUSD vault marks Lido’s first product built specifically for USD-pegged tokens. It accepts the stablecoins USDC and USDT and automatically allocates deposits to a range of decentralized finance (DeFi) opportunities on Ethereum, such as lending markets and other yield-generating strategies. Users receive tokens representing their share of the vault, with rewards accruing over time.
The EarnETH vault works similarly, but works for Ethereum-related assets, including ETH, WETH, and Lido’s stETH. Deposits are spread across multiple DeFi protocols, including Aave, Uniswap, and Morpho, and the system moves funds to better-performing strategies.
The stablecoin vault comes at a time when USD-pegged tokens have become a major component of activity in the Ethereum DeFi ecosystem. According to a press release shared with CoinDesk, approximately half of DeFi activity on the network currently involves stablecoins.
“Stablecoins are a fundamental part of DeFi, and so far we have not served these users,” Lido Ecosystem Foundation’s Marin Tvrdić said in a press release.
Learn more: Lido launches GG Vault to get DeFi income with one click