stETH: What It Is, How It Works, and Why It Matters in Staking
When you stake Ethereum, you lock up your ETH to help secure the network and earn rewards—but you can’t use it elsewhere. That’s where stETH, a liquid staking token issued by Lido Finance that represents your staked ETH and accumulated rewards. Also known as staked ETH, it lets you keep earning yield while still using your tokens in DeFi, trading, or lending. Unlike traditional staking, where your ETH is frozen until withdrawals are enabled, stETH moves freely across wallets, exchanges, and protocols. This flexibility is why over 20% of all ETH in circulation is now staked through Lido.
stETH isn’t magic—it’s built on a simple idea: when you deposit ETH into Lido’s smart contract, you get stETH back at a 1:1 ratio. Every time the network pays staking rewards, your stETH balance increases automatically. You don’t need to claim anything. The value of stETH stays pegged to ETH, but because it includes accrued rewards, it’s technically worth slightly more than 1 ETH over time. This is called Lido Finance, the decentralized protocol that manages stETH issuance and validator operations. Lido runs a network of trusted validators, handles slashing risks, and keeps everything transparent. You’re not staking alone—you’re part of a collective that’s securing Ethereum while keeping your capital liquid.
But stETH isn’t without risks. If Lido’s validators get slashed due to downtime or misbehavior, stETH could temporarily de-peg from ETH. That’s rare, but it’s happened before. Also, while stETH works on most major DeFi platforms like Aave and Curve, not every exchange supports it yet. And because it’s not native ETH, some users prefer holding ETH directly—especially if they plan to withdraw staked ETH after the Shanghai upgrade. Still, for most people using crypto daily, stETH offers the best of both worlds: yield and usability.
What you’ll find in the posts below are real-world examples of how people use stETH and similar tokens. From staking strategies that beat traditional savings accounts, to how stETH fits into DeFi yield farms, to why some exchanges list it while others don’t—you’ll see how this one token connects to bigger trends in crypto. Whether you’re new to staking or already holding stETH, these articles cut through the noise and show you exactly what’s happening now.
- By Eva van den Bergh
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- 14 Nov 2025
Understanding Liquid Staking Derivatives: How They Unlock Yield Without Locking Up Your ETH
Liquid staking derivatives let you earn Ethereum staking rewards while keeping your ETH liquid. Learn how stETH and rETH work, their risks, top providers, and how to multiply your yields using DeFi.