What is Lido Staked Ether?
Lido Staked Ether (stETH) is a unique token that represents your staked ether within the Lido platform. This token combines the initial deposit value with staking rewards, providing a seamless experience for Ethereum users. When you deposit your ether, stETH tokens are minted instantly, and they are burned upon redemption, reflecting the stake accurately.
Market Dynamics of stETH
The value of stETH against ether (ETH) is influenced by market demand. At present, stETH is pegged at a 1:1 ratio to the ether that Lido has staked, but its price can vary. This happens because it is currently impossible to claim the underlying ether until Ethereum 2.0 fully merges. As of June 11, 2022, stETH is valued at 0.955 ETH, primarily due to liquidity concerns and risks associated with potential delays in the transition to Ethereum 2.0.
Using stETH in DeFi
One of the attractive features of stETH is that it allows users to earn staking rewards while maintaining liquidity. stETH can be traded just like ether, which opens up various options for decentralized finance (DeFi) strategies. This flexibility means that you can utilize stETH across multiple DeFi platforms, allowing you to maximize your yield potential. For instance, platforms like Bybit offer trading for stETH where users can capitalize on stETH/USDT pairs.
