Lido Launches Lido Lend – New Protocol for Institutional Lending

Lido, a major player in Ethereum-based staking, is entering the on-chain lending market with its product Lido Lend, targeting institutions and security. The launch is set for the current quarter, though exact dates are yet to be announced. The product will be a modified version of Morpho Blue with a focus on risk minimization and professional users. The team describes this move as a "flywheel" for the ecosystem: Lido Lend complements the stETH and Lido Earn flywheel, providing users a way to earn rewards with a priority on convenience and security. The project will focus solely on well-known and liquid collaterals—stETH and WETH—which likely reduces exposure to recent exploits involving low-liquidity assets.

Aave suffered significantly after the KelpDAO exploit of $292 million: troubled loans exceeded $120 million. Lazarus stole over 89,000 unsecured rsETH and used Aave to borrow liquid assets, including WETH. Aave has adopted an aggressive risk reduction policy, including the rejection of assets with low adoption. Analyst Konstantin Lomashuk stated: "Lido has built the safest staking solution in crypto: over $24 billion staked. This market is solved. The next is lending. Too many hacks. Lenders deserve better protection. That's what Lido Lend is created for."

The on-chain lending market is divided among Aave, Morpho, and Spark (Sky, formerly MakerDAO). In terms of active loans, Aave leads with 68%, Spark holds 13%, and Morpho 12%. TVL has recovered to $55 billion, with active loans at $31 billion, and Aave has been leading since 2021. Lido's move might be perceived as a declaration of war, but the project denies this: Lido Lend complements rather than competes with the market. The fate of LDO and its buyback program remains unclear: at the time of publication, the token had retraced by 14% but remained in an upward channel in the second half of 2026.