Lido Puts Liquidity Buffers At The Center Of Ethereum ETP Yield Debate

In its new institutional note , Lido says products holding an unstaked liquidity buffer may earn rewards on less than their full ETH exposure. It promotes liquid staking as an alternative and uses WisdomTree’s stETH-backed product as an example. Lido has a commercial interest in that comparison. The arithmetic is straightforward even without ranking any funds. In an illustrative product with 100 ETH, a 20 ETH unstaked buffer would leave 80 ETH generating staking rewards. If the staked portion earned 3% over a year, it would produce 2.4 ETH before fees and other adjustments.