Ether staking giant Lido is collaborating with Cosmos blockchain ecosystem projects Neutron and Axelar to bridge its staked ether (stETH) tokens to the Cosmos network. This move opens the door to millions of dollars in liquidity flowing between the two blockchains.

Liquid staking has gained traction as a means for investors to generate yields on their digital assets. It’s a major player in decentralized finance (DeFi), accounting for $16 billion in combined value, as per data from DefiLlama.

Liquid staking platforms like Lido allow users to retain liquidity of their locked-up tokens through a derivative token usable for lending and borrowing. Lido’s stETH holds a $13.8 billion market capitalization, with two variants available: the rebasing token stETH and the wrapped, auto-compounding token wstETH, which will serve as the bridge to Cosmos.

Bridging stETH to Cosmos via Neutron and Axelar

Lido has partnered with cross-chain platform Neutron and full-stack development network Axelar to facilitate this bridging project. CoinDesk has confirmed that both Neutron and Axelar have allocated 1% of their respective token incentives to enhance liquidity for wrapped stETH and wstETH.

Avril Dutheil, core contributor to Neutron, expressed enthusiasm for this collaboration: “We are thrilled to assist in bringing one of the largest liquid staking tokens, Lido’s staked ETH, to the Cosmos ecosystem. This move reflects the importance of cross-chain support and our commitment to enhancing liquidity and attracting users to Cosmos.”

Cross-Chain Potential on Cosmos

Once on Cosmos, the wstETH token will be accessible across several blockchains built on Cosmos’ Inter-Blockchain Communication (IBC) technology platform. This includes Cosmos itself, as well as Cronos, Sommelier, and prominent DeFi protocols such as Osmosis and dYdX.

About the Author

Amelie Moreau is a freelance financial writer with a Master’s degree in Economics. She specializes in blockchain technology and DeFi, and her work has appeared in various industry publications.