How to Lend Crypto on Lido Finance: Step-by-Step Guide (ADA Alternatives Included)

Introduction to Lido Finance and Staking

Lido Finance revolutionized crypto staking by allowing users to earn rewards without locking assets or managing infrastructure. While Lido doesn’t support Cardano (ADA) staking, this guide explains its core lending process using Ethereum (ETH) as the primary example. We’ll also explore ADA alternatives for consistent passive income.

Does Lido Finance Support Cardano (ADA)?

As of 2023, Lido Finance does not support Cardano (ADA). The platform specializes in liquid staking for these blockchains:

• Ethereum (ETH)
• Solana (SOL)
• Polygon (MATIC)
• Polkadot (DOT)
• Kusama (KSM)

For ADA holders, we’ll cover compatible alternatives later in this guide.

Step-by-Step Guide to Lending on Lido Finance

Follow these steps to stake ETH on Lido (process similar for other supported assets):

1. Connect Your Wallet
   • Visit lido.fi
   • Click “Stake” and connect a Web3 wallet (MetaMask, Coinbase Wallet, or WalletConnect)
2. Select Asset & Amount
   • Choose Ethereum from supported assets
   • Enter the amount of ETH to stake (minimum 0.001 ETH)
3. Stake and Receive stETH
   • Confirm transaction in your wallet (gas fee applies)
   • Receive stETH (staked ETH) tokens 1:1 to your stake amount
4. Earn Rewards Automatically
   • stETH balance increases daily reflecting ~4-6% APY rewards
   • Track earnings via Lido dashboard or DeFi portfolio trackers
5. Use stETH in DeFi
   • Trade stETH on DEXs like Uniswap
   • Use as collateral on Aave or Compound
   • Provide liquidity in Curve Finance pools

Top Alternatives for Lending Cardano (ADA)

While Lido doesn’t support ADA, these trusted platforms do:

• Binance: Up to 3% APY via flexible savings or 8% in locked staking
• ADALite: Non-custodial wallet with built-in delegation (4-5% APY)
• Yoroi Wallet: Mobile staking with 150+ stake pools (avg. 4.5% APY)
• Nexo: 1-8% APY depending on loyalty tier and payment type

Benefits of Liquid Staking with Lido

• Zero Lockup: Withdraw anytime via stETH trading
• Daily Rewards: Compounded automatically
• DeFi Integration: Use stETH across 50+ protocols
• No Minimums: Stake any amount (unlike validator nodes)

Key Risks to Consider

• Smart Contract Vulnerabilities: Audited but not risk-free
• Slashing Protection: Lido mitigates but doesn’t eliminate slashing risks
• stETH Peg Risk: Temporary depegs possible during market volatility
• Regulatory Uncertainty: Changing policies may impact operations

Frequently Asked Questions (FAQ)

Can I stake ADA on Lido Finance?

No. Lido doesn’t support Cardano. Use dedicated ADA wallets like Yoroi or exchanges like Binance for ADA staking.

What’s the minimum ETH to stake on Lido?

0.001 ETH with no maximum limit. Ideal for small investors excluded from solo staking (32 ETH minimum).

How often are rewards distributed?

Rewards compound daily. Your stETH balance increases automatically every 24 hours.

Is Lido safer than exchange staking?

Lido offers non-custodial staking (you control keys), while exchanges are custodial. Both carry different risk profiles.

Can I lose money staking with Lido?

Possible through:

• ETH price drops
• Rare smart contract exploits
• Severe stETH depeg events

Historical risks remain low but never zero.

How do taxes work for stETH rewards?

Most jurisdictions treat staking rewards as taxable income. Consult a crypto tax professional for guidance.

Conclusion: While Lido doesn’t support ADA, its liquid staking model sets the standard for ETH and other supported assets. ADA holders have robust alternatives for earning passive income. Always DYOR and start with small amounts when exploring new platforms.