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Wrapped stETH (WSTETH)

Wrapped stETH (WSTETH) is a token that represents a stable version of staked Ether () without the rebasing mechanism, utilized in various applications. Created by the team behind , a platform, WSTETH is designed to facilitate integration with DeFi protocols by maintaining a constant balance, unlike stETH, which undergoes regular rebasing.[1][2][3][4]

Overview

introduced the WSTETH token on February 19, 2021, to address the challenges associated with using in specific environments. While stETH is configured to rebase daily to reflect rewards, WSTETH maintains a static balance, making it more suitable for use in protocols that require consistent token balances, such as and .

WSTETH represents a share of the total supply but does not undergo daily balance adjustments. Instead, its value appreciates relative to stETH as rewards accumulate. This design allows WSTETH users to participate in activities while benefiting from staking rewards without the complications associated with rebasing tokens.[1][2][3][4]

Functionality and Use Cases

WSTETH can be acquired by wrapping stETH through the platform or through integrated with Lido. Once wrapped, WSTETH can be utilized across multiple protocols on various , including , , and . It serves as collateral in lending platforms like and can be used in on exchanges such as and .

The primary utility of WSTETH lies in its compatibility with a broader range of . The static balance of WSTETH ensures smooth integration with protocols that may not be designed to handle fluctuating balances, thereby facilitating participation in activities such as yield farming and .[2][1][3][4]

Bridging and Cross-Chain Integrations

To increase the accessibility of WSTETH, has extended its availability across multiple networks. Support for bridging WSTETH to and was introduced on October 6, 2022. This was followed by the launch of a bridge to the ecosystem via Neutron on September 28, 2023, along with subsequent deployments on networks such as , , , , Linea, and .

These bridging capabilities enable WSTETH to be used across various ecosystems, enhancing its utility within the landscape.

In summary, Wrapped stETH (WSTETH) serves as a rebase-free alternative to stETH within the DeFi ecosystem. Its design makes it easy to participate in a variety of DeFi activities while enabling the accumulation of staking rewards.[1][2][3][4]

Lido Finance

Lido is a decentralized solution that facilitates the staking of assets on networks such as and . Unlike traditional staking methods that often require assets to be locked up, Lido allows users to maintain liquidity. When users stake through Lido, they receive tokens like , which correspond to their staked assets. These tokens accrue staking rewards and can be utilized in various applications, offering both liquidity and the ability to participate in other on-chain activities. Lido functions by pooling user deposits and staking them with network , with the aim of simplifying the staking process and, at the same time, allowing the continuous generation of rewards and flexibility in the use of assets.[1][2][3]

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Wrapped stETH (WSTETH)

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September 24, 2024

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