Introduction

Users who stake ETH in Lido's Eth2 contract will earn stETH. If you stake 1 ETH with Lido, you get 1stETH back.

stETH lets users participate in the DeFi ecosystem (Yearn, Curve, Maker, Aave) while still earning Eth2 via Phase 0 staking.

stETH earns staking incentives wherever it's bought. It will rebase everyday to reflect Ethereum staking benefits whether you get stETH through stake.lido.fi, 1inch, or a friend.

This eliminates the drawbacks of directly staking Eth2: illiquidity, immovability, inaccessibility. Lido lets you use your staked ETH so you don't have to pick between staking and DeFi.

Holding stETH or using stETH on multiple DeFi protocols is possible for users.

• stETH can be used as part of liquidity pools on decentralized exchanges alongside other cryptocurrencies.

• As a collateral for borrowing assets, users can engage in different DeFi methods without having to sell their underlying ETH.

• Aggregators can leverage this as an additional yield layer on top of the already existing yield farming.

Where do stETH tokens go?

You may get a feel for stETH users' habits by following the flow of their coins from wallet to labeled addresses. In the following table, we look at stETH's location over the since 2022, by their labeled address.

Analysis

Observation

• In terms of volume, we can observe that the Anchor vault is now taking in the most, where consumers may exchange their stETH for bETH in order to use it as collateral on Anchor.

• AAVE stETH pool is the next following the anchor with 22.8% shares of taking stETH, that followed by Curve Finance pool that is currently receiving the 15.5% shares of stETH volume.

• It looks that 1inch is the most popular swap router.

• User-interacted liquidity pools include the Lido.

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