How is wstETH different from stETH?

The coin count is fixed and the price grows. The yield is the same. wstETH is the same staking share in a form that suits DeFi and L2s.

You need out of stETH right now, no waiting. Which route?

Swap on a DEX at the market rate. A DEX gives you ETH at once, at the market price. The queue gives exactly 1 : 1, but you wait.

Lido: staking with any amount

Lesson 29 of 58 in the course “Crypto”. Free, with animations and a quiz.

Staking without 32 ETH or a server

Lido pools ETH from many people and hands it to professional validator operators. You go to stake.lido.fi, deposit even 0.01 ETH and get stETH one to one right away. Your stETH balance grows every day as rewards drip in. The key difference from staking on an exchange: the token sits in your own wallet, and you can use it in DeFi.

stETH and wstETH: same thing, two forms

With stETH the number of coins grows: 1 becomes about 1.025 after a year. Some apps and bridges cannot handle that, so there is a wrapper called wstETH. Its coin count stays fixed, and its price grows instead: 1 wstETH is already worth more than 1 ETH. The yield is the same. DeFi apps, Aave and L2s usually use wstETH, and you can wrap or unwrap right on the Lido site.

How to get your ETH back

There are two ways. The first is a withdrawal request in Lido itself: you get exactly 1 ETH per 1 stETH, but you have to wait, from a few days to weeks if the queue is long. The second is swapping stETH for ETH on Uniswap or Curve. It is instant, but at the market rate. In calm times the gap is under a percent; in a panic it can be noticeable. If you are not in a hurry, the queue almost always pays better.

Biggest does not mean risk-free

Lido is the largest liquid staking protocol: it holds about 9M ETH, roughly a fifth of all staked ether. It takes 10% of rewards, and the rest is yours. The risk is that the protocol is smart contracts plus a set of operators, so any failure hits everyone at once. And the Ethereum community has long debated whether one player has too much power. So it is wise not to put everything in one place. The next lesson covers Rocket Pool, the main alternative.

Check yourself

How is wstETH different from stETH?
Correct answer: The coin count is fixed and the price grows. The yield is the same. wstETH is the same staking share in a form that suits DeFi and L2s.
You need out of stETH right now, no waiting. Which route?
Correct answer: Swap on a DEX at the market rate. A DEX gives you ETH at once, at the market price. The queue gives exactly 1 : 1, but you wait.

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