What is Lido Staked Ether (stETH)?
Lido Staked Ether (stETH) is a liquid staking token issued by Lido Finance, representing a share of the total ETH staked through the Lido protocol. Lido was launched in 2020 and has become the dominant liquid staking solution for Ethereum, holding approximately 60% market share in the LST market.
How stETH Works
When you deposit ETH with Lido, you receive stETH on a 1:1 basis. The protocol batches user deposits and delegates them to a permissioned set of professional node operators who run Ethereum validators. As these validators earn staking rewards, your stETH balance automatically increases daily through a rebasing mechanism.
The rebasing model means your token balance grows over time rather than the token price. This makes it easy to track rewards but requires special handling in some DeFi protocols. Users receive approximately 90% of staking rewards, with the remaining 10% split between node operators and the Lido DAO treasury.
Key Features
Liquidity: Unlike native Ethereum staking which requires 32 ETH and locks funds, stETH can be freely traded, used as collateral, or deployed in DeFi protocols while still earning staking rewards. No Minimum: Deposit any amount of ETH, making staking accessible to users with less than 32 ETH. DeFi Integration: stETH is widely integrated across DeFi, including lending protocols like Aave, DEXs like Curve, and yield optimizers.Risks
Smart Contract Risk: Despite multiple audits and significant TVL history, smart contract vulnerabilities remain a possibility. Slashing Risk: If Lido node operators are penalized for validator misbehavior, stETH holders could see reduced rewards or principal. Depeg Risk: stETH may trade below ETH parity during market stress or liquidity crunches. Centralization Concerns: Lido's dominance in Ethereum staking has raised concerns about network centralization.Data Disclaimer
TVL and APY figures are sourced from on-chain data and may fluctuate. Data as of February 2026.