Lido Staked Ether (stETH) is an ERC-20 token that is of particular interest to Ether hodlers. Because it also makes it possible for smaller wallets to participate in Ether staking and thus generate profits.
How does Proof of Stake work?
Proof of Stake is the consensus mechanism for Ethereum. Network participants, so-called validators, use their coins (stake) to ensure that the network remains secure. To do this, they deposit ETH in the network and receive additional ETH as a reward (“staking rewards”).
However, not all Ether users can afford it. Because the minimum bet for ether to be deposited is 32 ETH – an amount that not everyone has in their wallet.
Rescue is at hand: Lido Staked Ether (stETH)
However, if you now choose Lido Staked Ether (stETH), you can bypass this minimum amount. Instead of paying directly into the Ethereum smart contracts, you hand over your ether to the third-party provider Lido. This collects the ether coins, bundles them into packages of 32 and stakes them in the Ethereum blockchain. For the deposited ether, users then get stETH in the wallet. Lido pays out the accruing rewards at regular intervals, so that the supply of stETH is constantly increasing.
What else does Lido have in its luggage?
Lido allows users to stake other coins as well. These include Polygon (MATIC), Solana (SOL), Polkadot (DOT) and Kusama (KSM). In addition, the platform supports various governance processes.