Staked Ether

price
change

Discover Staked Ether'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 Staked Ether?

Staked Ether (STETH) is a cryptocurrency token that represents a unit of ether (ETH) that has been "staked" or deposited in the Ethereum beacon chain. It is a liquidity token that allows users to stake any amount of ether and receive an equivalent amount of STETH, which can be traded, lent, or used for other liquidity purposes. STETH is not a stablecoin but functions more like an IOU, with the expectation that holders can redeem it for an equivalent amount of ether once the Ethereum network upgrade is complete.

How is Staked Ether used?

Staked Ether (stETH) is a token that represents staked Ethereum in the Lido platform. It allows users to stake any amount of Ether (ETH) and receive an equivalent amount of stETH, which can be used across the DeFi ecosystem to earn rewards and participate in various liquidity activities. Here are some key ways stETH is used:

  1. Liquidity Pools: stETH can be combined with ETH in liquidity pools, enabling users to swap stETH for ETH whenever desired. This process, known as a pool swap, essentially unstakes a user's ETH.

  2. Lending: Lending platforms like Aave allow users to wrap their stETH and other cryptocurrencies to use as loans to others. The lending value is determined by the wrapped token, which is based on the underlying value of the staked token.

  3. Yield Farming: Users who stake their ETH or stETH can earn yields. Platforms such as Harvest offer token holders the chance to deposit stETH and double their yield earnings.

  1. Derivatives: stETH can be used to create derivatives such as insurance derivatives and put/call options, providing additional financial instruments for users.

  2. Trading: stETH can be traded like ETH, allowing users to buy and sell it on various exchanges.

  3. Staking Rewards: stETH accrues staking rewards regardless of where it is acquired, and users receive daily rewards in the form of stETH balance rebases.

These uses enable stETH to function as a liquid staking derivative, allowing users to participate in various DeFi activities while still earning staking rewards.

How do I store Staked Ether?

To store Staked Ether (stETH) tokens securely, you can use a Ledger hardware wallet. Ledger offers a range of wallets, including the Ledger Nano S Plus and Ledger Nano X, which are designed to protect your private keys and sign transactions offline, making them resistant to malicious attacks and threats.

  1. Select and Purchase a Ledger Wallet:

    • Choose the Ledger wallet that suits your needs, such as the Ledger Nano S Plus for beginners or the Ledger Nano X for Bluetooth connectivity.
  2. Set Up the Ledger Live App:

    • Download and install the Ledger Live app on your desktop or mobile device.
    • Pair the Ledger wallet with the Ledger Live app to manage your stETH tokens securely.
  3. Add a stETH Account:

  • Open the Ledger Live app and add a stETH account with a few clicks.
  • Choose among different providers to manage your stETH tokens easily.
  1. Secure Storage and Management:
    • Ledger Live allows you to check your real-time balance, track transaction histories, and manage your stETH tokens securely.
    • You can also use Ledger Live to stake your stETH tokens and track your rewards.

By following these steps, you can securely store and manage your stETH tokens using a Ledger hardware wallet and the Ledger Live app.

How to buy Staked Ether?

To buy Staked Ether (STETH) tokens, you can follow these steps:

  1. Buy ETH:

    • Open an account on a reliable exchange like Bit2Me or Binance.
    • Verify your account and add funds to your wallet.
    • Buy Ethereum (ETH) and keep it in your wallet.
  2. Set up a Wallet:

    • Download and install a Web3 crypto wallet like MetaMask or Trust Wallet.
    • Create and set up a new wallet, ensuring to keep your seed phrase safe.
  3. Transfer ETH to Wallet:

  • Transfer the purchased ETH from your exchange wallet to your MetaMask or Trust Wallet.
  1. Choose a DEX:

    • Select a decentralized exchange (DEX) that supports STETH, such as PancakeSwap or Uniswap.
    • Connect your wallet to the DEX by following the instructions.
  2. Swap ETH for STETH:

    • On the DEX, select ETH as the payment and STETH as the token you want to acquire.
    • Enter the amount you want to swap and confirm the transaction.
  3. Check for Smart Contract:

  • If STETH is not listed on the DEX, you can find its smart contract address on Etherscan.io and manually enter it to perform the swap.

Remember to be cautious of scams and ensure you are using the official contract addresses and wallets.

Discover
Staked Ether
We give you the tools to invest your time and money in 1000+ tokens.
Subscribe

History of Staked Ether

Staked Ether (STETH) is a tokenized representation of Ether (ETH) that has been staked on the Ethereum blockchain through the Lido platform. The concept of STETH emerged as a response to the limitations of traditional Ethereum staking, which required a minimum of 32 ETH to participate. Lido, founded in December 2020, introduced STETH as a means to make staked ETH liquid and accessible to users with any amount of ETH.

Early Development and Growth

Lido's initial version allowed users to stake ETH and receive STETH in return, making their staked funds liquid and reusable in other protocols. This innovation marked the beginning of the liquid staking industry, with Lido becoming a pioneer in this field. The project gained significant traction, attracting investments from notable firms such as Semantic Ventures, ParaFi Capital, and Andreessen Horowitz.

Key Features and Benefits

STETH tokens are minted upon deposit and burned when redeemed, with balances updated to reflect earnings and rewards. This tokenized form of staked ETH enables users to earn ETH 2.0 staking rewards and benefit from yields across Decentralized Finance (DeFi) products. STETH can be used as collateral for loans, invested in liquidity pools, and sold on the open market, making it a highly liquid token.

Market Impact and Challenges

The price of STETH has occasionally deviated from its 1:1 ratio with ETH, causing market instability. For instance, in June 2022, STETH traded at a significant discount to ETH, leading to concerns about the security of Ethereum and the broader crypto market. Despite these challenges, STETH has maintained its position as a top 10 cryptocurrency by market capitalization, with a market cap of nearly $11.5 billion.

Current Status and Future Prospects

Today, STETH continues to play a crucial role in DeFi, offering users a flexible and accessible way to engage in Ethereum staking. As the Ethereum network transitions to Ethereum 2.0, the utility and use cases of STETH are expected to expand, potentially leading to increased adoption and further growth in the liquid staking market.

Discover
Staked Ether
We give you the tools to invest your time and money in 1000+ tokens.
Subscribe

How Staked Ether works

Staked Ether (stETH) is a tokenized representation of Ether (ETH) that is staked through Lido, a staking solution built for the Ethereum network. When users stake their Ether on the Ethereum 2.0 Beacon Chain, they receive staking rewards in the form of additional Ether. However, these rewards are typically locked up until the staking period is over. Lido's stETH solves this issue by making staked ETH liquid and accessible for use across various DeFi (Decentralized Finance) products.

Staking and Rewards

When users stake their Ether through Lido, they receive stETH tokens in a 1:1 ratio. These tokens are updated daily to reflect the staking rewards earned. This means that stETH holders can continue to earn rewards even if they use their stETH across different DeFi platforms.

Liquidity and Use Cases

stETH tokens are fully liquid, allowing users to trade, sell, exchange, invest, or utilize them in various ways. This liquidity enables users to participate in DeFi activities such as lending, yield farming, and liquidity pooling without having to unstake their Ether. For example, stETH can be pooled with ETH in a liquidity pool, allowing users to swap stETH for ETH when needed.

Mechanics and Updates

The stETH token balances are updated daily at 12PM UTC when the oracle reports changes in Eth2 deposits and rewards. This update, known as a "rebase," reflects the current staking rewards and ensures that stETH holders continue to earn rewards without needing to receive a transaction in their wallet.

Benefits and Flexibility

The main advantage of stETH is that it allows users to earn staking rewards while still being able to use their Ether across various DeFi products. This flexibility makes stETH a popular choice for those who want to maximize their returns without being locked into traditional staking requirements.

Discover
Staked Ether
We give you the tools to invest your time and money in 1000+ tokens.
Subscribe

Staked Ether's strengths

Staked Ether (stETH) has several strengths that make it an attractive option for investors and users in the decentralized finance (DeFi) ecosystem:

  1. Liquidity Token: stETH operates as a liquidity token, allowing users to deposit their ETH into a smart contract on the Lido blockchain and receive an equivalent amount of stETH. This token can be traded, exchanged, borrowed against, or utilized for other liquidity purposes.

  2. Flexibility in Staking: Unlike the traditional staking requirement of 32 ETH on the Ethereum network, Lido Finance enables users to stake any amount of ether and receive stETH, making it more accessible to a broader range of users.

  3. Yield Generation: stETH holders can earn interest on their staked ETH, providing a passive income stream. This interest can be further amplified by using stETH in yield farming strategies.

  1. Decentralized Finance Applications: stETH can be used in various DeFi applications such as lending, yield farming, and derivatives, providing users with a range of opportunities to generate returns on their staked assets.

  2. Security and Decentralization: By staking ETH, users contribute to the security and decentralization of the Ethereum network, which is transitioning from a proof-of-work to a proof-of-stake consensus mechanism.

  3. Liquidity Pools: stETH can be combined with ETH in liquidity pools, enabling users to swap stETH for ETH whenever desired. This process, known as a pool swap, essentially unstakes a user's ETH.

Overall, stETH offers a flexible and liquid way to participate in the Ethereum staking process while maintaining access to the staked assets for other DeFi activities.

Staked Ether's risks

Staked Ether (STETH) carries several risks:

  1. Slashing and Penalties: Validators can be slashed for misbehavior, resulting in a loss of staked ETH. Penalties can also occur if a validator is offline for an extended period.

  2. Validator Risk: Choosing a reputable validator is crucial, as they can engage in harmful behavior leading to slashing or penalties. This risk is mitigated by selecting a trustworthy validator.

  3. Client Software Bugs: Bugs in client software can cause issues, such as the inability to finalize transactions. This risk is reduced by having multiple implementations of the blockchain.

  1. Unstaking (Unbonding) Periods: Blockchains implement a buffer period before stakers can unstake and withdraw their stake, which can create a duration mismatch for custodians or exchange platforms.

  2. Counterparty Risk: Staking through a counterparty like Lido or Rocket Pool carries the risk that the counterparty may get slashed, hacked, or default due to bankruptcy or fraud.

  3. Liquidity Risks: STETH is a liquidity token, and its value can be affected by the liquidity of the underlying ETH. If the liquidity of ETH decreases, the value of STETH may also decrease.

  1. Max Thresholds for Staking Platforms: Concentration of staking power in a single platform like Lido can pose a systemic threat to Ethereum if that platform were to experience issues or be compromised.

  2. Technical Risks of Restaking: Restaking protocols like EigenLayer carry technical risks such as excessive slashing, loss of control over the stake, and malicious apps. However, these risks can be mitigated through auditing, bug bounties, and protocol monitoring.

  3. Financial Risks: While restaking itself does not carry financial risks, the use of Liquid Restaking Tokens (LRT) can lead to financial risks if users deposit their LRT into lending protocols and experience liquidation.

These risks highlight the importance of careful consideration and due diligence when engaging in staking and using STETH.

Discover
Staked Ether
We give you the tools to invest your time and money in 1000+ tokens.
Subscribe

Did Staked Ether raise funds?

Discover
Staked Ether
We give you the tools to invest your time and money in 1000+ tokens.
Subscribe
Discover
Staked Ether
We give you the tools to invest your time and money in 1000+ tokens.
Subscribe

Staked Ether’s team

  • Lido Team: The team behind Staked Ether (STETH) consists of various node operators, developers, auditors, and partners who contribute to the project's security, functionality, and growth.

Whalee AI

The fundamental analysis assistant for crypto value investors.

Staked Ether NEWS REPORT

Latest news

Want an analysis of Staked Ether? Tell us on discord.

Help us improve!
Tell us what you think of this page and which features you would like to see next.
OPEN FORM