Lido Staked Ether ($stETH) is a token that represents your staked ether in Lido, combining the value of the initial deposit and staking rewards. $stETH tokens are minted upon deposit and burned when redeemed. $stETH token balances are pegged 1:1 to the ethers that are staked by Lido and the tokens balances are updated daily to reflect earnings and rewards. $stETH tokens can be used as one would use ether, allowing you to earn ETH 2.0 staking rewards whilst benefiting from e.g. yields across decentralized finance products. Lido Staked Ether ($stETH) is based on multiple networks, including Ethereum, Terra, Solana, Kusama, and Polygon. 

What is Lido?

The Lido is an Ethereum Liquid Staking Protocol, built on Ethereum 2.0's Beacon chain, allowing its users to earn staking rewards on the Beacon chain without locking Ether or maintaining staking infrastructure. Users can deposit Ether to the Lido smart contract and receive $stETH tokens in return. The smart contract then stakes tokens with the DAO-picked node operators. 
 

StETH is a derivative of ETH that is staked on Lido. Lido is a decentralized protocol allowing users to stake ETH and participate in the consensus mechanism of Ethereum. Staking helps to secure the Ethereum network under a proof-of-stake consensus mechanism, which is more energy-efficient and scalable.

Lido is a liquid staking solution for Ethereum backed by several industry-leading staking providers. Its main advantage is that it enables participating in Ethereums PoS consensus mechanism without a minimum stake. Staking on Ethereum has some drawbacks, such as requiring a minimum of 32 ETH to stake, locking up tokens for an indefinite period of time until withdrawals are enabled during the Shapella upgrade, and exposing users to slashing risks if validators misbehave or go offline.

Lido aims to solve these problems by allowing users to stake any amount of ETH with multiple professional validators who share the slashing risks and provide high uptime. Lido liquifies ETH and creates staked ETH liquid by issuing stETH tokens. stETH can then be used for trading, lending, or as collateral across DeFi applications.

Lido is a decentralized autonomous organization (DAO) that is governed by its community members. The team behind Lido consists of various node operators, developers, auditors and partners who contribute to the projects security, functionality and growth.

Some of the node operators include P2P Validator, Chorus One, Staking Facilities, Certus One, Stakefish and others. Some of the developers include Lido DAO members, Paradigm Research, Sigma Prime and others. Some of the auditors include Quantstamp, Sigma Prime and Trail of Bits. Some of the partners include Curve Finance, 1inch Network, Yearn Finance and others.

When you stake your ETH with Lido, you receive stETH in exchange. This token represents your stake in the Ethereum network and can be traded or held like any other ERC-20 token. In return for staking your ETH, you receive a share of the rewards generated by the network. These rewards are paid out in the form of ETH. The protocol auto-converts the rewards into stETH and accumulates all staking rewards in the users account.

One of the key benefits of stETH is that it is liquid and can be traded on various decentralized exchanges, making it easy to buy and sell. Traditional staking, on the other hand, permanently locks up funds until a pre-determined period is over. Consequently, funds cannot be accessed during that time. With stETH, you can earn rewards while still having access to your funds at any time.

StETH has the extra benefit of providing a higher yield than traditional staking. This is because Lido's staking pool is designed to maximize rewards by delegating funds to a variety of validators across multiple networks. By diversifying its stake across different validators, Lido is able to reduce the risk of slashing, which is the penalty for validators who act maliciously or fail to follow the network's rules. This approach allows Lido to offer a higher yield on stETH compared to traditional staking, making it an attractive option for investors looking to earn passive income on their ETH holdings.

stETH tokens are created when users deposit their ETH into Lidos smart contract. The contract then sends the ETH to one of Lidos validators who stake it on behalf of the user. The user receives an equivalent amount of stETH tokens in return. The stETH tokens represent both the initial deposit and the rewards earned by staking.

The balance of stETH tokens increases over time as more ETH is generated through staking. The rewards are calculated based on the total amount of ETH staked on Lido and the current annual percentage rate (APR) of staking. The APR varies depending on how many validators are active and how much ETH is staked across the network.

The supply of stETH tracks the number of ETH deposited into the Lido contract. The total supply of stETH can be tracked via the token contract address. At the time of writing, the supply of stETH is 6,056,183.

stETH is available for trading on a number of exchanges including Curve, 1Inch, Uniswap, SushiSwap, Bybit, Gate.io and more.