Venture capital firm Andreessen Horowitz (a16z) has invested $70 million in Lido Finance, a liquid staking provider that makes it easier to stake ether and other proof-of-stake (PoS) assets. The firm also used Lido to stake an undisclosed portion of a16z Crypto’s ether holdings on the Beacon Chain.

The Ethereum blockchain plans to switch this summer from its current proof-of-work validation system to PoS, which is more energy efficient and lets users validate network transactions through temporary token deposits (or staking) in exchange for rewards.Ethereum needs to encourage ether holders to stake their tokens or a secure PoS transition won’t be possible, which is where Lido Finance comes in.“Lido solves the competitive incentives between staking and seeking yield in DeFi. By issuing an Ethereum-native liquid token, Lido allows you to use staked ETH as collateral within DeFi in the same way you can use ETH currently,” wrote a16z Crypto’s Daren Matsuoka and Porter Smith in the announcement post.Last summer, a16z launched a $2.2 billion crypto fund that was the largest ever for the industry until Paradigm announced a $2.5 billion fund in November.

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