stETH Uses

    Digging into stETH utility.

    Introduction

    stETH is Lido’s liquid token equivalent of staked Ethereum. Users get stETH after staking Ether which bypasses the restraints of illiquidity, immovability, and inaccessibility of staking directly in Eth2.

    This means that stETH owners can put their tokens to work in creative ways to earn more yield in addition to staking rewards or even sell their tokens.

    stETH tokens can be used in variety of ways including liquidity pools, and defi applications such as Anchor, Yearn, and Balancer. This dashboard narrows down the investigation to liquidity pools to determine which ones have stETH and what the metrics are.

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    In What DEXs are stETH Being Used?

    Let's take a look at the decentralized exchanges with stETH liquidity pools. The chart below shows the number of unique users trading stETH in DEX platforms where stETH is being utilized.

    You can see that Curve leads the DEXs with 7,370 unique users trading stETH. This can be attributed to the fact that the stETH-ETH pool was one of the first, if not the first stETH pool to be created in the Ethereum ecosystem. Therefore, anyone wanting to trade stETH is likely to go to Curve. 1inch, Uniswap and Paraswap follow up in that order.

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    Next, let's take a look at how much volume each of the DEXs facilitates in terms of stETH trade. Clearly, Curve takes the lead with ~1.2m in stETH tokens traded, followed by 1inch with 57K and Paraswap with 23K. In fact, stETH trade volume on Curve alone is greater than all the others combined.

    Final Words

    It is no doubt that there is utility for stETH in decentralized exchanges. This validates LIDO's model that the Ethereum ecosystem needs a liquid staked Eth2 token that is liquid, movable and transferable.