What is Wrapped stETH? Ethereum derivative explained

Wrapped stETH (wstETH) is a currency that combines the flexibility of decentralized finance (DeFi) with the advantages of Ethereum staking.

In this article we’ll discuss what is Wrapped stETH, how it works, what it is used for, and price history of Wrapped stETH (WSTETH).

Table of Contents

• What is Wrapped stETH?
• How does Wrapped stETH work?
• Price history of Wrapped stETH

What is Wrapped stETH?

A stable variant of staked ether, Wrapped stETH (WSTETH) is a currency intended for usage in decentralized finance (DeFi) applications. By staking ETH using Lido’s liquid staking platform, one can receive a wrapped version of stETH. As a result, users can still take part in DeFi applications and receive incentives for staking.

The value of stETH is standardized by wrapping it into wstETH, which also facilitates integration with a variety of DeFi protocols. WSTETH keeps a fixed balance that rises in value over time, in contrast to standard stETH, which rebalances every day to reflect staking earnings.

Because of its increased predictability and compatibility with loan platforms, liquidity pools, and smart contracts, users can leverage their staked assets without compromising their staking incentives.

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How does Wrapped stETH work?

Built on the Ethereum blockchain, wrapped stETH stakes ETH using Lido’s liquid staking platform. The method creates a stable and consistent balanced version of stETH by wrapping stETH, which is acquired by staking ETH via Lido’s platform.

By offering a stable and consistent balanced version of stETH, Wrapped stETH cryptocurrency sets itself apart from rivals and is appropriate for DeFi applications. Its ability to offer a wrapped version of stETH that is compatible with a variety of DeFi protocols gives it a competitive edge. Compared to other liquid staking methods, which might not offer a steady and consistent balance, wrapped stETH performs well.

What is Wrapped stETH used for?

Wrapped stETH (WSTETH) aims to offer a consistent and stable balance version of stETH that can be utilized in DeFi applications including aggregators, optimizers, liquidity pools, lending protocols, and DEXs. Wrapped stETH cryptocurrency’s frequent rebasing makes it inappropriate for certain DeFi protocols; this project attempts to address this issue. Among the possible applications for wrapped stETH are liquidity provision, yield generation, and DeFi application participation.

How many Wrapped stETH are there?

The total supply and circulating supply of Wrapped stETH is set at 3,476,696.

The official contract for WSTETH is 0x7f39c581f595b53c5cb19bd0b3f8da6c935e2ca0 and more information about Wrapped Ether can be taken from the following links: https://lido.fi/ and https://blog.lido.fi/

Price history of Wrapped stETH

WSTETH is currently trading around $3042.37 with a market cap of $10.6 billion and a 24-hour trading volume of $24.7 million.

Wrapped stETH 1D chart, Source: Tradingview

The price of WSTETH has rallied in the past few days as the crypto market in general is witnessing a bullish rally. Further targets for WSTETH can be $4000, with some retracement levels coming up around the $2500 mark.

It is advisable to not invest in any cryptocurrency without doing research as they can be volatile and considered a risky investment as compared to traditional financial instruments.

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Who created Wrapped stETH?

The developers behind Lido, a liquid staking platform, developed Wrapped stETH (wstETH). WstETH is a wrapped form of stETH, a coin that represents the portion of ETH that you have staked through Lido. Unlike stETH, which is rebased every day to reflect staking rewards, wstETH is made to be more easily integrated with DeFi protocols by keeping a steady balance.

Is Wrapped stETH secure?

Although wrapped stETH (wstETH) is usually regarded as secure, it’s crucial to comprehend the security context. No exploits or hacks of Wrapped stETH itself have been documented.

However, stETH has been lost due to flaws in other protocols or systems that use it, such the Bybit exchange hack or the Idols NFT Protocol exploit. Rather than focusing on Wrapped stETH’s security, these occurrences emphasize how crucial it is to comprehend the risks involved in using stETH and the protocols that interface with it.

What makes Wrapped stETH unique?

A tokenized form of staked Ether on the Ethereum (ETH) network, wrapped stETH (stETH) is a special kind of cryptocurrency. Accordingly, users that stake their Ethereum on Lido receive stETH, which is an equivalent of their staked Ethereum.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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