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ETH vs stETH: Are these tokens the same?

If you have attempted to stake ETH before, then you might know that you need at least 32 ETH to become an Ethereum validator. On top of the high amount required for staking, becoming an Ethereum validator also requires technical knowledge. Most importantly, once your stake your ETH, you are not able to withdraw that ETH for an undefined amount of time (realistically, this will likely be possible within the next year but the exact date is unclear) because withdrawals of staked ETH is currently disabled.

Cue Lido Staked Ether(stETH), which is the token investors on the Lido platform receive in exchange for their staked ETH. stETH is an ERC20 token that is pegged on a 1:1 basis for the ETH you stake. Those holding the stETH tokens receive staking rewards from Lido's platform. At any point of time, your stETH is redeemable for ETH and you have the freedom to stake any amount of ETH you like. This way, Lido takes away the pain of understanding the technicalities of ETH staking and offers liquid staking to solve the liquidity problem in traditional staking. But does this mean that stETH and ETH are virtually the same?

The difference between the ETH token and stETH token is the same difference between any ETH token and any other ERC20 token. The main highlight of a stETH token is that it is pegged to ETH. But like your ETH, you can trade and transfer your stETH across DeFi. Although your stETH does represent your locked staked position of your ETH, stETH does not have to be an idle token like your staked ETH would be. Due to its liquidity, there are many uses for stETH to yield you additional earnings on top of your staking returns.

Uses for stETH

The following is a list of ways stETH can be used for earning more interest:

  • Liquidity pools: On Curve, you can deposit stETH in their stETH-ETH pool to earn the fees by providing liquidity. In return, you’ll receive the Curve LP tokens, representing your stake in the pool, which can be further used in other DeFi protocols.

  • Lending: On AAVE V2, you can easily supply your stETH. Although the APY is low, you can borrow against it and use the borrowed funds in other DeFi dApps to generate extra yield.

  • Yield Farming: You can also deposit your stETH with Harvest Finance, which is a Yield Aggregator that aggregates and automates the process of yield farming for its users.

Get the full list of platforms that let you earn more with your stETH


What is Lido staked Ether (stETH)?

stETH is an ERC20 token that represents your staked ETH on a 1:1 basis. It is a liquid asset that was provided by Lido in return for your staked position through Lido.

How to stake ETH with Lido?

1. Download the Omni app. 2. Send ETH to your Omni wallet or buy some directly through the app. 3. Stake within 3 taps by tapping Earn on the Home Screen, clicking ETH, and selecting Stake ETH

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