Lido, the largest liquid staking protocol on Ethereum, is expanding beyond ether (ETH) with the launch of a new product designed for stablecoin holders.
The project on Thursday introduced a revamped version of its yield product, Lido Earn, which now revolves around two vaults: EarnETH for ether-based assets and EarnUSD for stablecoins. The goal is to make it easier for users to earn returns on crypto without having to choose or manage strategies themselves.
Simply put, a vault is a common investment tool where users deposit cryptocurrencies and the platform automatically uses these funds in different strategies designed to generate yield.
The new EarnUSD vault marks Lido’s first product designed specifically for dollar-pegged tokens. It accepts USDC and USDT stablecoins and automatically allocates deposits across a range of decentralized finance (DeFi) opportunities on Ethereum, such as lending markets and other yield-generating strategies. Users receive a token representing their share of the vault, with returns accumulating over time.
The EarnETH vault works the same way, but for ether-related assets including ETH, WETH, and stETH du Lido. Deposits are spread across multiple DeFi protocols, including Aave, Uniswap, and Morpho, with the system moving funds to higher-performing strategies.
The stablecoin vault comes as dollar-pegged tokens have become a significant part of activity in Ethereum’s DeFi ecosystem. According to a press release shared with CoinDesk, approximately half of DeFi activity on the network now involves stablecoins.
“Stablecoins are a fundamental part of DeFi, and until now we have not served these users,” said Marin Tvrdić of the Lido Ecosystem Foundation, in the press release.
Read more: Lido launches GG Vault for one-click access to DeFi yields
