{"id":30367,"date":"2022-06-12T01:27:11","date_gmt":"2022-06-12T08:27:11","guid":{"rendered":"https:\/\/financer.com\/crypto\/lido-staked-ether\/"},"modified":"2023-11-06T17:08:48","modified_gmt":"2023-11-07T01:08:48","slug":"lido-staked-ether","status":"publish","type":"crypto","link":"https:\/\/financer.com\/crypto\/lido-staked-ether\/","title":{"rendered":"Lido Staked Ether"},"content":{"rendered":"\n\n\n
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Lido Staked Ether (stETH) is a derivative of Ethereum<\/a>. What makes it unique and why is it so popular? It offers an alternative way to stake ETH that lowers the financial threshold for participating in Ethereum Staking. <\/p>\n\n\n\n Normally, you would need 32ETH to be a validator on Ethereum – which is a good deal of money. But what if you don’t have 32ETH to stake but still want to participate? <\/p>\n\n\n\n That’s where Lido Staked Ether comes in. It allows those who can\u2019t afford to participate in Ethereum staking to enjoy the rewards of staking without putting up that much.<\/p>\n\n\n\n What’s more, Lido Staked ETH makes staking on Ethereum more flexible. In traditional ETH staking, the assets are locked and can’t be used for any other purpose.<\/p>\n\n\n Lido Staked Ether is a derivative<\/em> because it is derived from another product. In this case, Ethereum. So you can think of Lido Staked Ether as an investment product created from Ethereum.\u00a0<\/span><\/p><\/div>\n\n\n As the name suggests, Lido Staked Ether was created by the Lido protocol. Lido Staked Ether has become immensely popular in the crypto community accounting for a large chunk of staking that happens on Ethereum.\u00a0<\/p>\n\n\n\n stETH was created to maintain a 1:1 peg with ETH. This means that stETH tokens can be redeemable for ETH 1:1. In other words, the price of stETH is tied to the price of ETH. <\/p>\n\n\n\n Hence the price action of stETH mirrors that of ETH.\u00a0<\/p>\n\n\n\n Lido Staked Ether maintains its price dependency with ETH in three ways:<\/p>\n\n\n\n stETH was created in October 2020 shortly before Ethereum started the process of switching to the PoS consensus protocol. <\/p>\n\n\n\n The process of securing stETH tokens starts with depositing your ETH via smart contract on the Lido blockchain. This awards you with an equal number of stETH tokens that you can trade, exchange, and use as collateral as well as for other liquidity purposes.<\/p>\n\n\n\n Two things make this process possible: \u00a0oracles<\/a> and rebase<\/a>.<\/p>\n\n\n\n As long as your staked ETH accumulates staking gains, your balance will be updated accordingly every 24 hours.<\/p>\n\n\n\n Lido is a community-managed platform and its structure consists of:<\/p>\n\n\n\n According to data from Nansen<\/a>, Lido Staked Ethereum accounts for 31% of total ETH currently staked and is the most used way to stake the Ethereum.<\/p>\n\n\n\n Since stETH represents staked Ethereum, the derivative token can be used as a substitute for ETH and serve any purpose related to its use. More, specifically, stETH can be used for the following:\u00a0<\/p>\n\n\n\n Because stETH accumulates staking rewards in real-time and changes value, it is incompatible with some DeFi protocols like Uniswap<\/a>. <\/p>\n\n\n\n Lido solved this problem by creating a second kind of staked ETH – wstETH<\/a>.<\/p>\n\n\n\n wstETH stands for wrapped-staked-ETH. It allows your staked ETH to continue accumulating staking interest as well as serve as collateral in decentralized exchanges(like Uniswap).<\/p>\n\n\n\n Staked ETH was created by Lido Finance.<\/p>\n\n\n\n The protocol was founded in October 2020 by Konstantin Lomashuk<\/a>, Vasily Shapavalov, <\/a>and Jordan Fish.<\/a><\/p>\n\n\n\n In 2020, Basil became Chief Technology Officer of P2P Validator and one of his first tasks was to create a staking solution for Ethereum’s upcoming Beacon chain. This solution later evolved into Lido.<\/p>\n\n\n\n Jordan Fish (better known as @Cobie<\/a> in crypto circles) is a computer science graduate. Cryptocurrencies are more of a hobby and passion for him. According to Jordan<\/a>, he invested $500 in Bitcoin at the very beginning and hasn’t invested ever since.<\/p>\n\n\n\nWhat Determines the Price of Lido Staked Ether (stETH)?<\/strong><\/h2>\n\n\n\n
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How Lido Staked Ether Works<\/strong><\/h2>\n\n\n\n
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What is Lido Staked Ether used for?<\/strong><\/h2>\n\n\n\n
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Through Lido Staked Ether, this interest is currently 4.5% per annum with Lido collecting 10% of it.<\/li>\n\n\n\n<\/p>\n\n\n\n
Who are the Founders of Lido Staked Ether?<\/strong><\/h2>\n\n\n\n
Konstantin has a Ph.D. in finance and is the founder of P2P Validator<\/a>, Vasily has a BSc in mathematics and 10 years of experience as a software engineer before moving into crypto in 2019.<\/p>\n\n\n\n