What Is Lido Staked Ether (stETH)? Price, History & Where To Buy

The release of Ethereum 2.0 has been highly anticipated by many. Several million ETH have been staked to the Beacon Chain, but that staked ETH is locked up until ETH 2.0.

Current Lido Staked Ether (stETH) Price

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Cue Ethereum staking derivatives by Lido, where users can essentially have their bread buttered on both sides.

This gives individuals the opportunity to keep reaping the rewards of DeFi while their tokens are locked -the liquid staking innovation that has rocketed in popularity recently.

Staked Ether in Lido maximizes staking rewards by pegging distributed tokens (stETH) to deposited ETH tokens in a 1:1 ratio.

How Lido Staked Ether (stETH) Works

The process is relatively innovative and allows users to stake ETH tokens in Lido and then receive staked ETH (steETH) in return.

This utilizes liquid ETH staking features – users can use their stETH tokens to participate in DeFi in the Lido ecosystem. The exact amount of ETH staked will be the same amount received in stETH tokens.

There is no minimum amount of ETH that can be staked, and ETH can only be unstaked once the beacon chain goes live.

However, staking ETH on Lido becomes ultra-convenient, and individuals can earn rewards while trading with a liquid asset (stETH). All rewards are eligible for certain penalties if applicable – there’s also a 10% fee on rewards accrued.

The Lido DAO facilitates the staking solution and provides users with a decentralized option for staking ETH. The governance (DAO) aims to handle any possible issues that arise, as this is a fairly new and innovative solution that will require a transparent and fair approach.

What Is Lido Staked Ether (stETH) Used For?

The Lido staking app aims to be as versatile as Ethereum’s beacon chain and tries to replicate the process as best as possible.

Staking rewards are relatively familiar and straightforward to understand – Individual deposits X amount of X token for X amount of days and receives x% of rewards annually.

E.g., John participates in staking by depositing 1 ETH token for staking; staking terms require him to lock up the tokens for one year to receive an APY (annual percentage yield) of 3.5%. But, he won’t be able to use the ETH he’s deposited because it’s locked up.

After one year, he’ll receive his ETH plus the 3.5% he’s accrued.

Lido’s liquid staking works similarly, except that individuals receive stETH tokens (at a 1:1 peg) for the ETH they stake. These stETH tokens can be used to earn staking rewards by participating in DeFi applications within the Lido ecosystem. A very innovative approach to staking, where individuals are generously rewarded.

Where To Buy Lido Staked (stETH)

Lido Staked Ether (stETH) isn’t available to purchase. The only way to obtain these tokens is by staking ETH – stETH token balances will equal the amount of staked ETH, and stETH can be used to participate in the Lido ecosystem.

ETH tokens can be purchased on several centralized crypto exchanges. But, before you’re able to purchase ETH, you’ll need to deposit fiat money onto an exchange, and sequentially ETH tokens will be credited to your ETH digital wallet on the exchange.

The crypto exchanges below are the safest place where you can buy, sell and store ETH.

Five of the most popular crypto exchanges are:

1. Binance
2. Coinbase
3. KuCoin
4. HTX
5. Crypto.com

All of the above exchanges allow users to buy, sell, transfer and store ETH in a digital wallet on the exchange. You can use your debit or credit card to purchase ETH on centralized exchanges.

However, to receive stETH tokens, you’ll need to transfer your ETH tokens to a wallet off of the exchange – you can choose to send them to a wallet such as Metamask. Once ETH tokens are in Metamask, you can stake ETH on Lido and receive stETH in return.

The stETH price is pegged to the price of ETH.How long has Lido and stETH token existed?

Lido finance was founded in 2020 by Konstantin Lomashuk. It has quickly grown to become among the top staking options for ETH holders.

Lido currently has a total of $10 billion in ETH TVL (total value-locked). This is significantly high compared to other DeFi applications that support Ethereum staking. Staked ETH (stETH) is the tokens credited to users who stake ETH on Lido.

The Lido DAO controls all upgrades and changes instead of a centralized authority. This liquid staking solution allows earning rewards on even the smallest initial deposit of ETH.

The Lido (LDO) token serves as the governance token. The Lido token essentially acts as the native utility token of the Lido protocol.

Users can earn daily staking rewards, which are advantageous compared to standard protocols offering Ethereum 2.0 staking. Staked assets are typically immovable and illiquid in other DeFi protocols. Self-staking is problematic to many, and Lido provides a convenient and profitable solution.

What’s controversial about Lido?

Lido finance recently entered the crypto space as a solution for retail investors who can’t afford the 32 ETH minimum deposit (validator deposit) for the Ethereum 2.0 beacon chain. There are, however, some controversies surrounding Lido and stETH.

Let’s take a look at the top two controversies surrounding Lido & stETH:

• Smart Contract Vulnerabilities – As is the case with many protocols, there is a lot of concern regarding the exploitation of staked Ethereum smart contracts. If this occurs, there would be a situation that would likely involve permanent loss of the assets unless otherwise resolved.
• Earnings Aren’t Stable – The earnings are calculated using rebasing mechanisms, which means that the daily staking rewards vary according to increases and decreases in stETH tokens.

How many Lido Staked Ether (stETH) tokens are there?

At the time of writing, there is currently 3,226,160 ETH in Lido. This means there are 3,226,160 stETH tokens.

Can Lido Staked Ether (stETH) be mined?

No, stETH can’t be mined. stETH tokens can only be obtained by staking ETH on the Lido finance applications. stETH tokens are distributed at a 1:1 ratio with staked ETH.

Individuals can use their stETH tokens to participate with DeFi apps in the Lido ecosystem to accrue additional rewards.

What is the market cap of Lido Staked Ether (stETH)?

The market cap of Lido Staked Ether (stETH) is:

Lido Staked Ether (stETH) market cap = total amount of ETH tokens staked in Lido x current market price of ETH

Lido Staked Ether (stETH) Market Cap = 3,226,160 ETH x $3,044 = $9.82 billion

The market cap fluctuates according to the staked amount of ETH in Lido and the market price of ETH.

Biggest Competitors Of Lido Staked Ether (stETH)

The liquidity staking solutions provided by Lido are innovative and have garnered an extensive amount of interest and investment from retail investors and firms alike.

Standard liquidity pools don’t solve the dilemma of illiquidity and immovability that is characteristic of staking ETH on the beacon chain.

Essentially, Parallel Finance is the biggest competitor to the staking incentives offered by Lido Finance. However, they don’t currently provide ETH staking incentives and tradable liquid assets like Lido Finance.

What are the future plans for Lido Staked Ether (stETH)

Lido Finance continues to grow its unique approach to Ethereum staking. They have attracted many retail investors who would be otherwise excluded from staking on the beacon chain – due to the minimum 32 ETH staking deposit.

More than 3,226,160 ETH tokens are currently staked on Lido (+$10 billion in asset value).

Pros and Cons of Lido Staked Ether (stETH)

Pros:

• Liquid Staking and Rewards – Users who stake ETH on Lido receive stETH tokens and earn daily staking rewards.
• No Minimum Deposit – Individuals can earn rewards on minimal ETH deposits; there’s no need to stake 32 ETH.
• stETH Can Be Used In The Lido Ecosystem – Individuals can generate yield on their stETH tokens by utilizing DeFi apps in the Lido ecosystem.
• Lido Finance Has Major Partners – The innovative platform has partnered with some formidable names in the industry, including Coinbase Ventures and, most recently, Andreessen Horowitz (a16z).
• User-friendly – Lido has an extremely user-friendly platform that makes it simple for retail investors to participate in ETH staking.

Cons:

• The Amount Of Earnings Isn’t Stable – The rewards are calculated according to the daily balance of stETH tokens. Increases or decreases in the balance lead to varying reward rates, making the earnings unstable.
• Bug Exploits Can Lead To Permanent Loss – Smart contracts can be exploited, leading to permanent loss unless otherwise resolved. This is a major concern for smart contracts on such platforms in general but lends itself toward being riskier than keeping tokens stored in a digital wallet or exchange.There have been several smart contract exploits recently, including the $625 million Ronin hack, which has caused major concerns for crypto users. Participating in staking protocols doesn’t come without risk, and any losses incurred could be detrimental to the user. Lido is, however, operated by a DAO, which would transparently address issues of this nature.

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