What Is stETH? Lido Staked ETH and wstETH Explained

stETH is Lido's liquid staking token for Ethereum: you deposit ETH with Lido, it is staked with professional node operators, and you receive stETH that tracks your staked ETH plus rewards. Your stETH balance grows roughly once a day as rewards arrive, and you can trade it, use it as collateral, or redeem it for ETH through Lido's withdrawal queue. Lido is the protocol that issues it, and wstETH is the wrapped, non-rebasing version of the same position.

This guide explains how Lido works, the difference between stETH and wstETH, how withdrawals have worked since 2023, what Lido v3 and stVaults change, the 2022 stETH discount, and the risks to weigh before holding it.

What is Lido?

Lido is a liquid staking protocol. Running your own Ethereum validator takes 32 ETH, hardware and constant uptime. Lido pools deposits of any size, hands the ETH to a curated set of node operators who run the validators, and issues stETH to depositors so their stake stays liquid. For the general idea, see our guide to liquid staking tokens.

Lido is by far the largest Ethereum liquid staking protocol. As of 17 October 2026, DefiLlama shows about $23.5 billion of TVL for Lido on Ethereum, roughly 57% of the ~$41.2 billion it tracks across Ethereum liquid staking protocols. Lido's own stats endpoint reported about 9.68 million ETH staked on the same day.

Lido charges a 10% fee on staking rewards, split between node operators and the DAO treasury, and the DAO can change it by vote, according to the Lido documentation. The protocol is governed by holders of the LDO token, with an extra check for stETH holders covered below.

How stETH works: the daily rebase

stETH is a rebasing token. You don't receive extra tokens through a claim; instead, the balance shown in your wallet changes when Lido's oracles report validator balances. The integration guide says rebases "normally" happen daily, once five of nine oracle daemons agree on the report.

Under the hood, Lido tracks shares. Each holder owns a fixed number of shares, and the stETH balance is calculated as their share of all pooled ETH. When rewards arrive, total pooled ETH rises, so every holder's balance rises with it.

• Rewards: Lido's 7-day average stETH APR was about 2.2% on 17 October 2026, per the Lido API. That is net of the 10% fee and moves with Ethereum network activity.
• Sanity checks: the oracle report is blocked if it implies an APR above 27% or a drop in staked ETH of more than 5%, per the same guide.
• Rounding quirk: because balances come from integer division, transferring a "full" stETH balance can leave 1-2 wei behind. It's harmless, but it confuses some apps.

Rebasing can also go the other way. If validators were penalised or slashed badly enough, a report could lower balances. That has not happened at scale, but it's the reason stETH is not risk-free ETH.

wstETH vs stETH: which should you hold?

wstETH ("wrapped stETH") holds the same position in a non-rebasing ERC-20. Instead of your balance growing, each wstETH becomes worth more stETH over time. On 17 October 2026, one wstETH was worth about 1.246 stETH, based on CoinGecko prices.

The Lido docs recommend bridging wstETH rather than stETH, because a bridge contract holding rebasing stETH can trap the rewards. On most networks other than Ethereum, bridged wstETH can't be unwrapped locally; you bring it back to Ethereum first.

A simple rule: hold stETH if you like seeing the balance grow and keep it on Ethereum; use wstETH for lending markets, liquidity pools, vaults and other chains. Both are the same claim on Lido's staked ETH, and you can wrap or unwrap at any time on Ethereum.

Withdrawals since Shapella

When Lido launched in 2020, nobody could withdraw staked ETH at all. Ethereum's Shapella upgrade enabled validator withdrawals on 12 April 2023 at 22:27 UTC (epoch 194,048), according to ethereum.org. Lido added withdrawals in its v2 upgrade on 15 May 2023, after a DAO vote, as The Defiant reported.

There are now two exits:

1. Sell on the market. Swap stETH or wstETH for ETH on a DEX. It's instant, but you take the market price, which can sit below 1 ETH in stressed conditions.
2. Redeem through Lido. Request a withdrawal and receive an NFT that marks your place in a first-in, first-out queue. Requests must be between 100 wei and 1,000 stETH, can't be cancelled, and are claimed once finalised, per the docs. The NFT is transferable.

Lido's help centre says the withdrawal period "can take anywhere between 1-5 days" in normal conditions. In extreme conditions, such as mass slashing, the protocol can enter "Bunker mode" and process requests more slowly. Ethereum's own validator exit queue also stretches waits when many stakers leave at once.

Lido v3 and stVaults

Lido v3 went live on Ethereum mainnet on 30 January 2026, introducing stVaults, as The Block reported after about a year of testing. An stVault is a non-custodial, opt-in contract that lets an institution, protocol or rollup choose its own node operators and setup while still minting stETH against the staked ETH.

Day-one users named by The Block include Linea, which stakes bridged ETH through a protocol-controlled vault, and Nansen. Because each vault is isolated, a badly configured vault is meant to carry its own risk rather than spread it to every stETH holder. Lido's existing pooled staking continues alongside the vaults.

Governance also changed. In June 2025, LDO holders voted to adopt dual governance, which lets stETH holders delay DAO decisions by locking stETH in an escrow, and freeze them if enough stETH objects so that dissenters can exit first, according to The Block.

The 2022 stETH discount

Before withdrawals existed, the only way out of stETH was to sell it. In May and June 2022, after the Terra collapse, a wave of forced sellers hit that market. Fortune reported that a 2-3% gap between stETH and ETH opened up and widened to 5-6% by early June, as Celsius and Three Arrows Capital, both large stETH holders, came under pressure. The main Curve pool was left holding roughly 111,000 ETH against 492,000 stETH.

The lesson is that stETH was never at risk of losing its backing; it lost its exit liquidity. Holders who borrowed against stETH were the ones hurt, because a lower market price pushed loans towards liquidation. Withdrawals have since given arbitrageurs a way to close a gap, which is why stETH traded at 0.9996 ETH on 17 October 2026, per CoinGecko. For more on how pegs break, read depegs explained.

Risks of holding stETH

• Smart contract risk. stETH, wstETH, the withdrawal queue and stVaults are all code. A bug could affect funds.
• Slashing and validator risk. Lido has had slashing events, including 20 validators run by Launchnodes in October 2023, which Cointelegraph covered. Losses so far have been small relative to rewards.
• Liquidity and price risk. The market price can trade below ETH, and withdrawals take days. Leveraged positions are the most exposed; see our guide to whether liquid staking is safe.
• Concentration and governance. One protocol controlling a large slice of Ethereum stake is a long-running debate. Dual governance reduces, but doesn't remove, the influence of LDO holders.
• Layering risk. Using stETH in restaking, loops or bridges adds the risks of each extra protocol. Our restaking platforms guide covers that stack.

If you're deciding between a liquid token and staking directly, our comparison of liquid staking vs native staking sets out the trade-offs.

Where JewelSwap fits

JewelSwap doesn't offer stETH or Ethereum staking. It runs liquid staking on other chains with the same basic idea: JWLSUI on Sui, JWLEGLD on MultiversX and JWLXRD on Radix. Unlike stETH's single rebasing token, these use a dual-token model, where the staked S-variant (SJWLSUI, SJWLEGLD, SJWLXRD) is the one that appreciates, much like wstETH.

Frequently asked questions

What is stETH?

stETH is Lido's liquid staking token for Ethereum. It represents ETH staked through Lido plus the rewards it earns, and its balance updates roughly daily. You can trade it, use it in DeFi or redeem it for ETH through Lido's withdrawal queue.

What is the difference between wstETH and stETH?

They represent the same staked ETH. stETH rebases, so your balance grows as rewards arrive. wstETH keeps a fixed balance and instead becomes worth more stETH over time, which makes it easier for DeFi protocols and bridges to handle.

Can I withdraw stETH for ETH?

Yes. Since Lido v2 went live on 15 May 2023, you can request a withdrawal through Lido and claim ETH once the request is finalised, usually within 1-5 days in normal conditions. You can also sell stETH on a DEX for an instant but market-priced exit.

Is stETH the same as ETH?

No. stETH is a claim on ETH staked through Lido. It usually trades very close to 1 ETH, but it carries smart contract, slashing and liquidity risks that plain ETH doesn't, and it traded at a 5-6% discount in June 2022.

What is Lido v3?

Lido v3 is the upgrade that went live on Ethereum mainnet on 30 January 2026 and introduced stVaults: isolated, opt-in staking vaults where institutions and protocols choose their own node operators and setup while still minting stETH.

How much does Lido charge?

Lido takes a 10% fee on staking rewards, split between node operators and the Lido DAO treasury. The DAO can change the fee by vote, and stVault configurations can set different terms.

Keep reading

• What is a liquid staking token (LST)?
• Liquid staking vs native staking
• Is liquid staking safe?
• Best restaking platforms in 2026
• Staking ETFs explained

This article is educational and isn't financial advice. Figures are as of 17 October 2026 from DefiLlama, CoinGecko, Lido's API and the sources linked, and they change daily. JewelSwap does not offer stETH or Ethereum staking.