Lido Staked Ether (stETH) is a token that represents your staked Ether in Lido, combining the fee of the preliminary deposit and staking rewards. stETH tokens are minted onto deposit and burned while redeemed. stETH token balances are pegged 1:1 to the ethers, which are staked through Lido, and the token’s balances are updated every day to reflect profits and rewards. stETH tokens can be utilized as one would use Ether, permitting you to earn ETH 2.0 staking rewards simultaneously as taking advantage of, e.g., yields across decentralized finance merchandise.
The Lido Ethereum Liquid Staking Protocol, constructed on Ethereum 2.0’s Beacon chain, permits its customers to earn staking rewards on the Beacon chain without locking Ether or keeping staking infrastructure.
Customers can deposit Ether to the Lido smart contract and obtain stETH tokens. Then the smart contract stakes token with the DAO-picked node operators.
Customers’ deposited budgets are pooled by using the DAO, and node operators never have direct access to the users’ belongings.
The stETH token can be moved at any time and is free from the limits associated with a loss of liquidity. The stETH token balance corresponds to the quantity of Beacon chain Ether that the holder should withdraw if state transitions were enabled in the Ethereum 2.0 network.