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 unveiled 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 cryptocurrencies without having to choose or manage strategies themselves.
In simple terms, a vault is a pooled investment tool where users deposit cryptocurrency and the platform automatically puts those funds to work in different strategies designed to generate returns.
The new EarnUSD vault marks Lido’s first product built specifically for dollar-pegged tokens. It accepts USDC and USDT stablecoins and automatically allocates deposits to a variety 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 and returns accumulate over time.
The EarnETH vault works similarly, but for ether-related assets, including Lido’s ETH, WETH, and stETH. Deposits are spread across several DeFi protocols, including Aave, Uniswap, and Morpho, and the system moves funds toward strategies that perform better.
The stablecoin vault comes as dollar-pegged tokens have become a major part of activity in the Ethereum DeFi ecosystem. About half of DeFi activity on the network now involves stablecoins, according to a press release shared with CoinDesk.
“Stablecoins are a fundamental part of DeFi and until now we were not serving those 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 returns
