Date: 2022-06-08

Methods

This analysis focuses on the price differences between stETH and ETH.

• ETH prices from ethereum.token_prices_hourly_v2
• ETH data is from between 2020-06-09 and 2021-12-03
• stETH prices from ethereum_core.fact_hourly_token_prices
• stETH data is from between 2020-12-23 and 2022-06-03

Overview

What is LIDO?

Lido Finance is a staking pool for Ethereum 2.0 that allows to participate in staking.

Website: Lido Finance

What is stETH?

stETH is a token that represents the staked Ether in Lido, combining the initial deposit value with rewards. Thus, stETH is a token that allows you to earn DeFi yield rewards.

stETH is the liquid token for betting ETH staked in the Eth2 contract with which users who bet their ETH in the Eth2 contract through Lido will receive the equivalent liquid token in the form of stETH.

Source

Analysis

⚠️ First Finding ⚠️

As the following chart shows, this analysis will be limited because of the current data limitations in Velocity. We only have an overlapping timeframe from 2021-01-01 till 2021-12-03. So we will concentrate on this.

Generally the price of stETH and ETH is nearly the same, but when we look at the chart, we can barely see a small difference.

To show this better I generated the next chart, which shows to lines, one for the difference in USD and one in Percentage.

Looking at the chart above, showing the price differences, we can see two big peaks, one (down) peak on 2021-05-16 20:00 and an (up) peak on 2021-08-06 18:00.

1. The first (down) peak on 2021-05-16 20:00 happened during a huge price drop in May 2021
2. The second (up) peak on 2021-08-06 18:00 happened during the huge price increase in August 2021

Conclusion

• stETH is worth more than ETH during huge price drops.
• During strong price increases stETH is worth less than ETH.
• It seems that it is difficult to hold the 'peg' for stETH during strong price movements.

Thanks for reading!

This analysis was created on 2022–06–08 for a bounty at Flipside Crypto by piper to answer the following questions:

Lido - stETH vs ETH: Q2. How has the price of stETH compared to ETH? Are there any events that triggered a big difference in price between the two tokens?

All data used are from Flipside Crypto. Flipside Crypto