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About Lido Staked ETH
Key Points
- Lido is a decentralized protocol allowing users to stake ETH and participate in Ethereum’s proof-of-stake consensus mechanism.
- StETH is a derivative of ETH that is staked on Lido, enabling users to stake any amount of ETH with multiple professional validators.
- Lido aims to solve drawbacks of traditional staking, such as requiring a minimum of 32 ETH, locking up tokens, and exposing users to slashing risks.
- Lido is a decentralized autonomous organization (DAO) governed by its community members.
- stETH can be traded or held like any other ERC-20 token and represents a share of the rewards generated by the network.
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About Lido Staked Ether
Introducing stETH: A Comprehensive Overview
StETH is a derivative of ETH, staked on Lido, a decentralized protocol that enables users to stake their ETH and participate in Ethereum’s consensus mechanism. By doing so, staking contributes to the security of the Ethereum network, which operates under a proof-of-stake consensus mechanism, boasting enhanced energy efficiency and scalability.
Lido offers a liquid staking solution for Ethereum, backed by a consortium of industry-leading staking providers. The primary benefit of this solution lies in its ability to facilitate participation in Ethereum’s proof-of-stake (PoS) consensus mechanism, sans the burden of a minimum stake requirement. Notably, staking on Ethereum is fraught with drawbacks, including the necessity of a minimum 32 ETH stake, the indefinite lock-up of tokens until withdrawals are enabled during the forthcoming Shapella upgrade, and the exposure to slashing risks in the event of validator misbehavior or offline status.
Lido seeks to alleviate these issues by enabling users to stake any amount of ETH with multiple professional validators, who collectively assume the slashing risks and ensure high uptime. By liquifying ETH, Lido creates a liquid staked ETH, represented by stETH tokens. These tokens can subsequently be utilized for trading, lending, or as collateral across various DeFi applications.
The Visionaries Behind StETH: Meet the Founders
Lido is a decentralized autonomous organization (DAO) governed by its community members, who collectively shape the project’s trajectory. The team behind Lido comprises a diverse ensemble of node operators, developers, auditors, and partners, each contributing their expertise to ensure the project’s security, functionality, and growth.
Notable node operators comprise P2P Validator, Chorus One, Staking Facilities, Certus One, Stakefish, and several others. The developer community encompasses Lido DAO members, Paradigm Research, Sigma Prime, and other esteemed contributors. Meanwhile, prominent auditors include Quantstamp, Sigma Prime, and Trail of Bits. Furthermore, the partnership network boasts esteemed collaborations with Curve Finance, 1inch Network, Yearn Finance, and numerous others.
The Mechanism of StETH: A Comprehensive Overview
When you stake your ETH with Lido, you receive stETH in exchange, a token that embodies your stake in the Ethereum network and can be freely traded or held, much like any other ERC-20 token. In return for staking your ETH, you are entitled to a share of the rewards generated by the network, which are paid out in the form of ETH. The protocol seamlessly converts these rewards into stETH, accumulating all staking rewards in the user’s account.
One of the primary advantages of stETH lies in its liquidity, allowing it to be seamlessly traded on various decentralized exchanges, thereby facilitating effortless buying and selling. In contrast, traditional staking involves a permanent lock-up of funds until a predetermined period has elapsed, rendering them inaccessible during that time. stETH, on the other hand, empowers users to accrue rewards while maintaining unfettered access to their funds at all times.
StETH boasts an additional advantage, offering a higher yield compared to traditional staking methods. This is attributed to Lido’s staking pool, which is strategically designed to maximize rewards by delegating funds to a diverse range of validators across multiple networks. By adopting a diversified staking approach, Lido effectively mitigates the risk of slashing, a penalty imposed on validators who engage in malicious activities or fail to comply with the network’s protocols. Consequently, Lido is able to provide a higher yield on stETH, making it an attractive proposition for investors seeking to generate passive income from their ETH holdings.
The Genesis of StETH: A Step-by-Step Explanation
Upon depositing their ETH into Lido’s smart contract, users trigger the creation of stETH tokens. The contract subsequently allocates the ETH to one of Lido’s validators, who then stake it on the user’s behalf. In return, the user receives a corresponding amount of stETH tokens, which serve as a representation of both the initial deposit and the accrued staking rewards.
The balance of stETH tokens experiences a steady accretion over time, driven by the incremental generation of ETH through staking. The rewards are calculated based on the aggregate amount of ETH staked on Lido and the prevailing annual percentage rate (APR) of staking, which fluctuates in response to the number of active validators and the total amount of ETH staked across the network.
The Circulating Supply of StETH: An Overview
The circulating supply of stETH is directly pegged to the amount of ETH deposited into the Lido contract, ensuring a seamless tracking mechanism. The total supply of stETH can be conveniently monitored via the token contract address. As of the current writing, the stETH supply stands at 6,056,183.
Where to Acquire StETH: A Comprehensive Guide
stETH is listed on a diverse range of prominent exchanges, including Curve, 1Inch, Uniswap, SushiSwap, Bybit, Gate.io, and many others, facilitating seamless trading opportunities.
Associated Resources
Discover Lido, the premier Ethereum staking solution, empowering users with seamless and secure staking experiences.
Discover Rocket Pool (RPL), a pioneering decentralized Ethereum staking pool that’s revolutionizing the landscape of blockchain technology.
Delve into the intricacies of stETH’s on-chain analytics.
Delve into the world of liquid staking derivatives on CoinMarketCap Alexandria, your premier resource for in-depth insights and expert knowledge.
Discover the intricacies of liquid staking, demystified on CMC Glossary.