Lido Staked Ether (STETH)
Lido Staked Ether (stETH) is a cryptocurrency token that represents staked Ether (ETH) in the Lido protocol. It provides a flexible and liquid method for Ethereum holders to participate in the Ethereum 2.0 proof-of-stake consensus mechanism. By staking Ether through Lido, users receive stETH tokens that reflect their staked amount and accrued rewards, maintaining a 1:1 peg to the staked Ether.
The Lido protocol
Lido is a decentralized staking platform that allows users to stake their Ether without having to lock it in a validator node. This process is particularly beneficial for those who wish to avoid the complexity and high capital requirement of running their own Ethereum validator. Lido pools the Ether from multiple users, stakes it in Ethereum 2.0, and distributes the staking rewards proportionally among stETH holders.
| Ticker | STETH |
| Category | Decentralized Finance (DeFi) |
| Website | https://www.lido.fi |
| @lidofinance | |
| Telegram | lidofinance |
| https://www.reddit.com/r/lidofinance/ | |
| Contract Addresses | |
|---|---|
| ethereum | 0xae...84 Copied! |
How stETH works
Minting and burning of stETH tokens
stETH tokens are minted when a user deposits Ether into the Lido protocol. This process involves exchanging Ether for stETH, which then represents the user's staked Ether and any associated rewards. When a user decides to exit their staked position, the corresponding stETH tokens are burned, and the user receives their staked Ether back.
Daily balance updates
stETH token balances are updated daily to reflect the rewards accumulated from staking. This ensures that holders of stETH benefit from the continuous earning of staking rewards, which are automatically reinvested into their stETH holdings. The daily updates are a crucial feature, as they maintain the 1:1 peg between stETH and the underlying staked Ether.
Use cases of stETH
Earning staking rewards
One of the primary advantages of holding stETH is the ability to earn Ethereum 2.0 staking rewards without the need to lock up Ether in a validator node. stETH holders can participate in the staking process passively, enjoying the benefits of staking rewards while maintaining liquidity.
Integration with decentralized finance
stETH can be used across various decentralized finance (DeFi) platforms, enhancing its utility beyond simple staking. It can be integrated with DeFi products to generate additional yields, allowing users to leverage their staked assets further. This flexibility makes stETH a versatile tool for users looking to maximize their returns in the crypto ecosystem.