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Lido Staked SOL

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Discover Lido Staked SOL's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is Lido Staked SOL?

Lido Staked SOL (stSOL) is a cryptocurrency token that represents a liquid staking position on the Solana blockchain. It allows users to stake their SOL tokens with Lido and receive stSOL tokens, which can be traded or used as collateral in decentralized finance (DeFi) activities. This liquid staking protocol, governed by the Lido DAO, enables Solana token holders to access liquidity on their staked assets without waiting periods, earning staking rewards and rewards from integrated platforms like Saber and Raydium.

How is Lido Staked SOL used?

Lido Staked SOL (stSOL) is a tokenized representation of staked SOL tokens on the Solana blockchain. It is part of the Lido for Solana liquid staking protocol, which allows users to stake their SOL tokens and receive stSOL tokens in return. These stSOL tokens can be used in various ways:

  1. Liquidity and Trading: stSOL tokens can be traded on the open market, providing liquidity to users who have staked their SOL tokens. This allows users to access their staked assets without waiting for the traditional staking process to complete.

  2. DeFi Integration: stSOL tokens can be used as collateral in decentralized finance (DeFi) products, enabling users to participate in lending, borrowing, and other DeFi activities.

  3. Secondary Rewards: stSOL tokens can be used to earn additional rewards through DeFi protocols, further increasing the value of the staked SOL tokens.

  1. Immediate Appreciation: Unlike traditional staking, stSOL tokens are issued immediately, and their value appreciates as the staked SOL tokens earn rewards. This allows users to benefit from their staked assets without delay.

  2. Staggered Withdrawals: Users can withdraw their staked SOL tokens in a staggered manner, which helps to avoid market slippage, especially for large withdrawals.

Overall, the stSOL token provides a flexible and liquid way for users to manage their staked SOL tokens on the Solana blockchain.

How do I store Lido Staked SOL?

To store Lido Staked SOL (stSOL) tokens, you can use various wallets that are compatible with Lido on Solana. Here are the steps to store stSOL tokens:

  1. Create or Restore a Wallet:

    • Solong Wallet: Navigate to https://solongwallet.io to create or restore your Solana wallet. You will need to install the browser extension offered by Solong to use this wallet. If you do not have a wallet, create a new one, note down your 12-word mnemonic and password, and store these in a safe place. If you already have a wallet, you can restore it using the mnemonic.
    • Phantom Wallet: Navigate to https://phantom.app/ to create or restore your Phantom wallet. Follow the on-screen instructions to set up your wallet.
    • Ledger Wallet: Set up your Ledger device by following the instructions on the Solana documentation site and the Ledger site. Make sure to note down the seed phrase for your address and store it in a safe place.
  2. Fund Your Wallet:
    Ensure your wallet is funded with some SOL tokens before interacting with Lido.

  3. Connect to Lido:

  • Solong Wallet: Visit https://solana.lido.fi and connect your Solong wallet to the Lido interface. Press the connect wallet button, select your wallet, and approve the connection.
  • Phantom Wallet: Visit https://solana.lido.fi and connect your Phantom wallet to the Lido interface. Press the connect wallet button, select your wallet, and approve the connection.
  • Ledger Wallet: Visit https://solana.lido.fi and connect your Ledger device to your machine. Press the connect button in the top-right corner of the Lido interface, select Ledger, and approve the connection.
  1. Stake SOL Tokens:
    Enter the amount of SOL you want to stake, and the values below the submit button will change automatically, providing information about the transaction. Approve the transaction through your wallet.

  2. View stSOL Balance:
    Once connected and staked, you can view your stSOL balance on the Lido widget. This balance indicates the number of SOL it is worth, and you can redeem your stSOL for SOL at any time.

By following these steps, you can store your stSOL tokens securely and manage your staked SOL assets on Lido.

How to buy Lido Staked SOL?

To buy Lido Staked SOL (STSOL) tokens, follow these steps:

Buying on Centralized Exchanges (CEXs)
  1. Choose a Reliable Exchange: Select a trustworthy centralized exchange that supports Lido Staked SOL (STSOL) purchases. Consider factors like ease of use, fee structure, and supported payment methods.
  2. Create an Account: Enter the required information and set a secure password. Enable two-factor authentication (2FA) for added security.
  3. Verify Your Identity: Complete Know-Your-Customer (KYC) verification, which may require varying information based on your nationality and region.
  4. Add a Payment Method: Follow the exchange's instructions to add a credit/debit card, bank account, or other supported payment methods.
  5. Buy Lido Staked SOL (STSOL): Use fiat currency or a popular cryptocurrency like USDT to purchase Lido Staked SOL (STSOL).
Buying on Decentralized Exchanges (DEXs)
  1. Choose a DEX: Select a reputable decentralized exchange like Uniswap that supports Lido Staked SOL (STSOL) trading.
  2. Connect Your Wallet: Use a compatible wallet like MetaMask to connect to the DEX.
  3. Find the Trading Pair: Look for the Lido Staked SOL (STSOL) trading pair and enter the amount you want to buy.
  4. Swap Tokens: Confirm the details and click the "Swap" button to complete the transaction.
Buying via Crypto Wallets
  1. Select a Wallet: Choose a reliable and reputable crypto wallet that supports Lido Staked SOL (STSOL).
  2. Create or Import a Wallet: Create a new wallet address or import an existing one, ensuring you have the seed phrase securely stored.
  3. Buy Lido Staked SOL (STSOL): Follow the wallet's instructions to purchase Lido Staked SOL (STSOL).
Post-Purchase
  • Store or Hold: Store your Lido Staked SOL (STSOL) in a wallet or on an exchange for long-term holding.
  • Trade: Trade Lido Staked SOL (STSOL) for other cryptocurrencies on supported exchanges.
  • Earn Rewards: Stake your Lido Staked SOL (STSOL) to earn rewards.
  • Transfer: Send Lido Staked SOL (STSOL) to anyone globally, virtually instantly.
  • Purchase Goods: Use Lido Staked SOL (STSOL) to buy goods or services from platforms that accept cryptocurrency payments.
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History of Lido Staked SOL

Lido Staked SOL (stSOL) is a tokenized representation of staked Solana (SOL) tokens within the Lido liquid staking protocol. The protocol, known as 'Lido for Solana,' was launched in May 2021 and is governed by the Lido DAO. It allows users to stake any amount of SOL and receive stSOL tokens, which can be traded or used as collateral in decentralized finance (DeFi) activities.

The stSOL tokens are backed by top staking providers and provide liquidity to users. When users deposit SOL into the Lido program, they immediately receive stSOL tokens, which represent their share of the total pool. Lido then delegates the SOL to validators on the Solana network, earning rewards that increase the value of stSOL tokens. These tokens can be used like SOL, enabling holders to earn staking rewards and access rewards from integrated platforms such as Saber and Raydium.

In September 2023, the Lido DAO's Peer-to-Peer (P2P) Validator submitted a proposal discussing the accomplishments, obstacles, and future outlook of Lido's operations on Solana. The team cited financial challenges and minimal fee revenues, suggesting the need for a sunset of the project. Lido on Solana was officially sunset in October 2023 due to unsustainable financials and low fees.

However, users have faced issues with withdrawing their staked SOL due to a faulty smart contract. As of April 2024, around $24 million in stSOL remains stuck, with users unable to retrieve their staked SOL. The issue has been identified as related to alterations in the Rent-Exempt Split logic and efforts are being made to resolve the issue through changes to the smart contract or workarounds.

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How Lido Staked SOL works

Lido Staked SOL (stSOL) is a liquid staking token that allows Solana (SOL) token holders to maintain liquidity while staking their assets. Here's how it works:

Staking SOL

To participate in staking, users deposit their SOL tokens into the Lido staking pool. This process is governed by the Lido DAO, ensuring a decentralized and community-driven approach.

Receiving stSOL

Upon depositing SOL, users instantly receive stSOL tokens, which represent their share of the total SOL pool deposited with Lido. This token can be traded, used as collateral in DeFi applications, or exchanged for SOL at any time in the open market.

Earning Rewards

As the SOL pool earns staking rewards, the value of stSOL tokens appreciates. This means that users can potentially earn additional income through their stSOL holdings, making it a more liquid and versatile option compared to traditional staking methods.

Trading and Liquidity

stSOL tokens can be traded on various platforms, including decentralized exchanges (DEXes) like Raydium, Saber, and Jupiter. This liquidity allows users to easily convert their stSOL back into SOL or other assets if needed.

Withdrawal Options

Users can withdraw their SOL from the staking pool, but this process takes around 2-3 days (1 Solana Epoch). Alternatively, they can instantly exchange stSOL for SOL on the open market, providing more flexibility.

Risks and Considerations

As with any cryptocurrency investment, there are risks associated with stSOL, including technical threats, market volatility, and counterparty risks. It is essential to conduct thorough research and due diligence before investing in stSOL or any other cryptocurrency.

Overall, Lido Staked SOL (stSOL) offers a convenient and liquid way for Solana token holders to participate in staking and earn rewards while maintaining flexibility and control over their assets.

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Lido Staked SOL's strengths

The token Lido Staked SOL (STSOL) has several strengths:

  • Liquidity: STSOL allows Solana token holders to maintain liquidity on their staked assets, which can then be traded or used as collateral in DeFi products.
  • Flexibility: Users can stake SOL with Lido and receive stSOL, which can be used in various DeFi applications, providing more flexibility to earn yields.
  • Ease of Use: Lido offers a user-friendly interface and accessibility, making it easier for retail investors to participate in staking.
  • Security: Smart contracts used by Lido are audited by quality auditors, ensuring a secure environment for users.
  • Tradability: stSOL tokens are freely tradeable on the open market, allowing users to easily buy and sell their staked assets.

These strengths make Lido Staked SOL an attractive option for users looking to earn yields on their SOL tokens while maintaining liquidity and flexibility.

Lido Staked SOL's risks

Lido Staked SOL (STSOL) carries several financial risks. These include:

  • Smart Contract Security Risk: There is a possibility that Lido's smart contracts may contain vulnerabilities or bugs, which could be exploited by attackers, leading to potential losses for users.
  • Slashing Risk: Validators on Solana risk staking penalties if they fail to fulfill their responsibilities properly. Lido mitigates this risk by distributing stakes across multiple professional and trustworthy node operators with varied configurations and maintaining an insurance fund to cover potential penalties.
  • stSOL Price Risk: The market price of stSOL could fall below its intrinsic value due to withdrawal limitations on Lido, which could hinder arbitrage and market-making activities.
  • Adoption Risk: The value of stSOL is built around the staking rewards associated with the Solana network. If Solana fails to reach required levels of adoption, this could lead to significant fluctuations in the value of SOL and stSOL.
  • Technical Risk: Lido is built on experimental technology, which may contain inherent vulnerabilities that could impact the value of stSOL.
  • Liquidity Risk: Integrations with various DeFi protocols may have limited liquidity, leading to price slippage and potential losses.
  • Market Risk: The value of stSOL can rise or fall based on market conditions, which could result in the loss of the staker's original investment.

It is crucial for users to be aware of these risks and make informed decisions when participating in liquid staking with Lido.

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Did Lido Staked SOL raise funds?

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Lido Staked SOL's ecosystem

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Lido Staked SOL
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Lido Staked SOL’s team

  • Jordan Fish: One of the founders of Lido Finance, also known as CryptoCobain, a long-time ETH whale and Twitter personality.
  • Vasiliy Shapovalov: A team member of Lido Staked SOL.
  • Konstantin Lomashuk: A team member of Lido Staked SOL.
  • Kasper Rasmussen: A team member of Lido Staked SOL.
  • Pavel Poddubnyi: A team member of Lido Staked SOL.
  • Pavel Pavlov: A product manager at P2P Validator, the organization responsible for operating Lido on Solana.

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