Lido Finance Guide: How to Stake ETH and Use stETH in DeFi

By Robert Stukes    On 7 Nov, 2025    Comments (20)

Lido Finance Guide: How to Stake ETH and Use stETH in DeFi

stETH Value Calculator

Your stETH Growth

Current Value:

Daily Growth:

Weekly Growth:

Monthly Growth:

Yearly Growth:

Annual Yield: 2.7%

Note: stETH value increases by approximately 0.0074% daily (2.7% annual yield). This calculation shows how your staked ETH grows with daily compounding.

Staking Ethereum used to be a barrier for most people. You needed 32 ETH-worth over $100,000 at today’s prices-to run a validator. That locked up your money, and you couldn’t trade it or use it in other DeFi apps. Lido Finance changed that. It lets you stake any amount of ETH, even 0.01 ETH, and get stETH in return-a token that represents your staked ETH plus rewards. And stETH isn’t just a receipt. It works like cash in DeFi. You can lend it, trade it, or use it as collateral. This guide breaks down exactly how Lido works, why it’s the most popular liquid staking platform, and how to use it without making costly mistakes.

How Lido Finance Works: No More 32 ETH门槛

Lido Finance is a decentralized protocol that lets you stake Ethereum without running your own validator. Instead of locking up your ETH, you deposit it into Lido’s smart contract. In return, you get stETH, a token that’s pegged 1:1 to ETH but grows over time as staking rewards are added. Unlike traditional staking, where your ETH is locked until withdrawal, stETH can be used anywhere Ethereum apps accept tokens-like Aave, Curve, or Uniswap.

The magic is in the automation. Every day, your stETH balance increases slightly. At a 2.7% annual yield, your balance grows by about 0.0074% daily. So if you stake 1 ETH today, you’ll have roughly 1.000074 stETH tomorrow. Over a year, that becomes 1.027 stETH. You don’t need to claim rewards manually. They compound automatically.

Lido doesn’t hold your funds. Your ETH is delegated to a network of 30 professional node operators-companies like Blockdaemon and Figment-that run validators on Ethereum. Lido’s smart contracts manage everything: deposits, reward distribution, and fee collection. The protocol takes a 10% fee on staking rewards: 5% goes to node operators, 5% goes to the Lido DAO treasury, which is controlled by LDO token holders.

Why Lido Dominates the Liquid Staking Market

As of October 2023, Lido controls 32.7% of all staked ETH on Ethereum-more than any other provider. That’s over $28 billion in total value locked. Why? Liquidity and integration.

stETH is the most liquid liquid staking token in crypto. Daily trading volume on DEXs like Curve and Uniswap exceeds $150 million. That’s 4x more than Rocket Pool’s rETH. Because of this, stETH is accepted as collateral in over 100 DeFi protocols. On Aave, you can borrow up to 75% of your stETH’s value. On Compound, you can earn interest on stETH directly. No other liquid staking token comes close.

Compare that to Coinbase Staking, which offers 4.5% APR but gives you no tradable token-just a balance in your Coinbase account. You can’t use it in DeFi. Or Rocket Pool, which gives you rETH but requires you to lock up additional collateral and has a much smaller liquidity pool.

Lido’s edge isn’t just higher returns-it’s access. If you want to earn yield while still using your ETH in lending, trading, or yield farming, stETH is the only token that lets you do it at scale.

How to Stake ETH on Lido: A Step-by-Step Guide

Staking with Lido takes less than five minutes. Here’s how:

  1. Go to lido.fi and connect your wallet (MetaMask, Ledger, or Trezor work best).
  2. Enter the amount of ETH you want to stake. You can stake as little as 0.01 ETH.
  3. Click "Stake ETH." Your wallet will prompt you to approve the transaction and pay a small gas fee-usually around $1.27 as of October 2023.
  4. Once confirmed, you’ll receive stETH instantly in your wallet.
That’s it. Your ETH is now staked. You’ll start earning rewards within minutes. Check your stETH balance in your wallet-it will slowly increase over time. No need to claim anything.

If you’re new to crypto, stick to MetaMask. It’s the most user-friendly. Hardware wallets like Ledger are safer for larger amounts but require an extra step: you’ll need to use Ledger Live or a browser extension to connect to Lido.

stETH tokens flowing through Aave, Curve, and Yearn with reward particles, pixel art style

Using stETH in DeFi: Unlocking More Yield

stETH isn’t just a staking receipt. It’s a DeFi asset. Here’s how to put it to work:

  • Deposit on Aave: Lend stETH and earn interest on top of staking rewards. You can borrow against it too, up to 75% LTV.
  • Provide liquidity on Curve: Add stETH and ETH to the stETH/ETH pool on Curve. You’ll earn trading fees plus CRV rewards.
  • Deposit in Yearn vaults: Yearn’s yvstETH vault automatically compounds your staking rewards and yields an average of 8-10% APY when combined with other DeFi incentives.
  • Use as collateral on MakerDAO: Mint DAI against your stETH. This is popular among traders who want leverage without selling ETH.
The key is understanding that stETH isn’t ETH. Its value is always slightly higher than ETH because it includes accrued rewards. So if ETH is $3,000, stETH might be $3,015. That’s normal. Don’t panic if your stETH balance doesn’t match your ETH balance exactly-it’s supposed to be higher.

What You Should Worry About

Lido isn’t perfect. There are risks you need to know.

Centralization risk: Lido controls over 32% of all staked ETH. Ethereum’s security relies on decentralization. If one entity controls too much stake, it could theoretically manipulate the network. Ethereum core developers have warned about this. Lido’s response? They’re working on Lido V3, which will add more node operators and improve governance.

Unstaking delays: Before April 2023, you couldn’t withdraw ETH from Lido at all. Now, with the Shanghai upgrade, you can unstake-but it takes 18 to 36 hours because validators exit the network in queues. If you need ETH fast, stETH isn’t ideal.

Smart contract risk: Lido’s code has been audited multiple times, but bugs still happen. In 2022, a glitch caused a brief mispricing of stETH. It was fixed within hours. Still, always use trusted interfaces like lido.fi-not third-party sites.

Governance apathy: Only 4.2% of LDO token holders vote on proposals. That means a small group controls the future of the protocol. If you care about decentralization, consider holding LDO and voting.

How Lido Compares to Other Staking Options

Comparison of Ethereum Liquid Staking Platforms (October 2023)
Platform APR Token Received Liquidity DeFi Integration Minimum Stake Custodial?
Lido Finance 2.7% stETH Very High ($150M+/day) 100+ protocols 0.01 ETH No
Coinbase Staking 4.5% None (account balance) None 0 0.001 ETH Yes
Rocket Pool 3.2% rETH Low (40% of stETH) 15+ protocols 0.01 ETH No
Stakefish 4.0% stFISH (on other chains) Very Low Minimal 0.1 ETH Yes
If you want maximum DeFi flexibility, Lido is the only choice. If you just want the highest APR and don’t care about using your ETH elsewhere, Coinbase is simpler. But you lose control-and access to DeFi.

Locked ETH vs liquid stETH in DeFi, pixel art comparison with queue timer in background

Common Mistakes and How to Avoid Them

Most users make the same errors:

  • Thinking stETH = ETH: stETH’s value grows daily. Don’t panic if your balance is higher than your deposit. That’s the reward compounding.
  • Trading stETH/ETH at the wrong time: On Curve, stETH usually trades at a slight premium. If you swap stETH for ETH when the price is low, you lose value. Wait for a premium.
  • Ignoring gas fees: Staking costs $1-$2 in gas. Don’t stake tiny amounts like 0.001 ETH-it’s not worth it.
  • Using shady websites: Only stake via lido.fi. Fake sites copy the design. Check the URL.
  • Not understanding unstaking delays: If you need ETH in 24 hours, don’t stake with Lido. Wait until you’re sure you won’t need it.

What’s Next for Lido?

Lido is expanding beyond Ethereum. In September 2023, it launched staking on Solana, with over $2.4 million in SOL staked in the first month. It’s also working on staking for Polygon and Polkadot. The next big update, Lido V3, will allow partial unstaking-meaning you can withdraw just part of your stETH without waiting for the full queue. That’s a major upgrade for users who need flexibility.

The bigger question is regulation. The SEC fined Kraken for offering staking as an unregistered security. Lido avoids this because it’s decentralized. But if regulators start targeting liquid staking tokens as securities, stETH could face legal hurdles. That’s a risk, but right now, Lido’s structure gives it more protection than centralized platforms.

Final Thoughts: Is Lido Right for You?

If you own ETH and want to earn yield without giving up control or liquidity, Lido is the best option. stETH is the most versatile asset in DeFi. It’s not perfect-centralization and unstaking delays are real-but no other platform offers the same combination of ease, liquidity, and DeFi access.

For beginners: Start with 0.1 ETH. Use MetaMask. Stake on lido.fi. Watch your stETH balance grow. Then explore Aave or Curve. You’re already earning more than you would in a savings account.

For advanced users: Layer stETH into yield strategies. Combine it with lending, liquidity mining, and options. You’re not just staking-you’re building a self-sustaining yield engine.

Lido didn’t just make staking easier. It turned a locked-up asset into a dynamic financial tool. That’s why it’s the leader-and why it will stay that way.

Can I lose my ETH if I stake with Lido?

No, you don’t lose your ETH. Your ETH is staked on the Ethereum network through professional validators. Lido’s smart contracts hold your deposit, but they don’t control your funds. Even if Lido’s team disappeared, your ETH would still be staked and earning rewards. The only risk is if the smart contract has a critical bug-which has never happened.

Is stETH always worth 1 ETH?

No, stETH is not always worth exactly 1 ETH. Because stETH includes accrued staking rewards, its value is usually slightly higher than ETH-often by 0.5% to 2%. This is normal and expected. If stETH drops below ETH’s price, it’s a sign of market stress, not a bug. Over time, it tends to return to its true value.

How do I withdraw my ETH from Lido?

You can unstake your stETH for ETH through the Lido interface. After the Shanghai upgrade, unstaking is possible but not instant. You’ll be placed in a queue, and withdrawals take 18-36 hours. You can only withdraw full stETH balances-you can’t withdraw partial amounts yet. Lido V3, coming in 2024, will allow partial unstaking.

Do I need to pay taxes on stETH rewards?

Yes. In most countries, including the UK and US, staking rewards are treated as income. Each time your stETH balance increases, it’s considered taxable income based on the ETH price at that moment. You must track daily accruals for tax reporting. Use tools like Koinly or TokenTax to automate this.

What’s the difference between stETH and ETH?

ETH is the native cryptocurrency of Ethereum. stETH is a token issued by Lido that represents your staked ETH plus accumulated rewards. You can’t use stETH to pay for Ethereum transactions or send it to exchanges that don’t support it. But stETH can be used in DeFi apps to earn extra yield, while ETH alone just sits idle. stETH is ETH with superpowers.

20 Comments

  • Image placeholder

    Louise Watson

    November 9, 2025 AT 04:19

    stETH isn't ETH. It's ETH with benefits.

  • Image placeholder

    Liam Workman

    November 10, 2025 AT 22:54

    Man, I love how Lido turned a boring lock-up into a DeFi Swiss Army knife. 🤖💸 stETH isn't just a receipt-it's a passport to yield farming, lending, and all the weird crypto parties. I started with 0.1 ETH and now I'm earning on top of earning. It's like compound interest, but with more memes.

    Also, the fact that you can use it on Aave, Curve, and even MakerDAO? That’s not innovation-that’s magic.

    And yeah, the 10% fee feels steep until you realize how much liquidity you’re getting. I’d pay 20% for this kind of flexibility.

    Biggest win? No more waiting months to unstake. I can still move my money, even if it takes 24 hours. That’s way better than Coinbase’s locked account.

    I’ve tried Rocket Pool. Cool tech, but the liquidity is a ghost town. stETH moves. It breathes. It lives.

    Also, the daily balance bump? It’s like your wallet is slowly growing a beard. You don’t notice it day-to-day, but look back in a month and you’re like… ‘Wait, did I just get richer?’

    And don’t even get me started on tax tracking. Koinly saved my life. Every 0.000074 ETH increase? Tax event. It’s wild.

    Lido V3 with partial unstaking? Please come soon. I want to withdraw 0.3 stETH without waiting for a queue the size of the DMV.

    And yes, I know the centralization risk. But honestly? 32% isn’t scary yet. It’s just… dominant. Like Google in 2005.

    If you’re new-just stake 0.1 ETH on lido.fi. Don’t overthink it. Watch your stETH grow. Then come back and play with Aave. You’ll thank me.

    Also, stETH > rETH. End of story. The volume difference is insane. No contest.

    And if you think stETH should always equal ETH? You’re missing the point. It’s not a 1:1 peg. It’s a 1:1 + rewards. It’s supposed to be higher. Chill.

    And no, you won’t lose your ETH. Even if Lido vanished tomorrow, your ETH is still staked on Ethereum. Smart contracts don’t sleep.

    Final thought: This isn’t staking. This is financial alchemy.

  • Image placeholder

    Benjamin Jackson

    November 12, 2025 AT 05:38

    Just staked my first 0.05 ETH last week. My stETH balance went up by 0.000037 this morning. I stared at it for 10 minutes like it was a baby’s first step. 😅

    Feels good to earn while doing nothing. And yes, I know it’s not ‘real’ money yet-but it’s real enough to make me smile.

  • Image placeholder

    Angie Martin-Schwarze

    November 12, 2025 AT 14:56

    i staked eth but now my steth is worth more and i dont know if i shoudl sell or keep or whatttt

  • Image placeholder

    Fred Kärblane

    November 14, 2025 AT 14:55

    Let’s talk about composability. stETH is the most composable liquid staking asset in DeFi. Period. You’re not just earning yield-you’re building a yield stack. Aave + Curve + Yearn = triple-dip compounding. That’s not passive income-that’s DeFi orchestration.

    And the fact that it’s accepted across 100+ protocols? That’s network effects on steroids. This isn’t a product. It’s infrastructure.

    Meanwhile, Coinbase gives you a balance. A balance. Like a bank account from 1998.

  • Image placeholder

    Janna Preston

    November 14, 2025 AT 23:22

    Wait, so if I stake 1 ETH, I get 1.027 stETH after a year? But what if ETH price drops? Do I still get the same stETH? Or does it lose value too?

  • Image placeholder

    Meagan Wristen

    November 15, 2025 AT 12:40

    Hi everyone! Just wanted to say I started with 0.02 ETH last month and I’m already earning more than my savings account. It feels so good to be part of something that’s actually growing. 😊

    Also, I used MetaMask and it was super easy. No drama. Just click, approve, done.

    And I love that I can use stETH on Curve now-got my first CRV rewards yesterday! So cool!

  • Image placeholder

    Becca Robins

    November 17, 2025 AT 10:04

    so like… is stETH like a crypto savings bond? 🤔

    also why does my balance keep going up even when i dont do anything? its like my wallet is on autopilot 🤖

    also lido looks sus but i guess its legit since everyone uses it??

  • Image placeholder

    Alexa Huffman

    November 18, 2025 AT 13:42

    One thing that’s often overlooked: stETH’s premium reflects market confidence in Ethereum’s staking yield. When stETH trades above ETH, it’s not a bug-it’s a signal that the market believes in the long-term security and reward structure of Ethereum staking.

    This is why institutional players prefer stETH over rETH or any other liquid staking token. Liquidity isn’t just volume-it’s trust.

    And yes, tax implications are real. Track every accrual. Use Koinly. You’ll thank yourself during tax season.

  • Image placeholder

    gerald buddiman

    November 18, 2025 AT 14:05

    Okay, I’m gonna be real-I was scared to stake because I thought I’d lose my ETH. Like, what if Lido gets hacked? What if the devs run away? What if the blockchain crashes? 😭

    But then I read the docs. And I realized: my ETH isn’t in Lido’s bank account. It’s on the Ethereum network. Lido’s just the middleman. The validators are real companies. The code is audited.

    And then I saw my stETH balance go up by 0.00007 ETH overnight. I cried. Not because I’m emotional-I just… didn’t think crypto could be this chill.

    Also, I used Ledger. It took 3 tries to connect. But it worked. And now I’m earning. And I’m not stressed.

    Also, stETH > ETH. It’s not a typo. It’s math.

  • Image placeholder

    Arjun Ullas

    November 20, 2025 AT 12:21

    Dear reader, the economic architecture of Lido Finance represents a paradigm shift in decentralized finance. The tokenization of staking rights via stETH introduces a novel liquidity mechanism previously unattainable in proof-of-stake ecosystems.

    Moreover, the delegation model to professional node operators ensures validator decentralization, while the 10% fee structure is both transparent and sustainable.

    However, the concentration of staked ETH under a single protocol poses systemic risk to Ethereum’s consensus security, as per the principle of validator diversity enshrined in Nakamoto consensus.

    Therefore, while Lido’s current dominance is economically rational, governance participation via LDO voting must be actively encouraged by all stakeholders to preserve the integrity of the network.

    Furthermore, the tax treatment of staking rewards as ordinary income under IRS guidelines necessitates meticulous record-keeping.

    Recommendation: Utilize lido.fi exclusively. Avoid third-party interfaces. Always verify contract addresses. Security is non-negotiable.

  • Image placeholder

    Steven Lam

    November 21, 2025 AT 22:36

    why are people so obsessed with this steth thing its just a token

    youre better off just holding eth and waiting for the next bull run

    all this de fi stuff is just gambling with numbers

    and why do you need to use it in 100 protocols its just extra work

    im just gonna hold

  • Image placeholder

    Noah Roelofsn

    November 23, 2025 AT 00:09

    stETH isn’t just a yield generator-it’s a liquidity multiplier. The real genius is how it turns a static asset into a dynamic one. You’re not just earning 2.7%-you’re unlocking access to a whole ecosystem of yield layers.

    Think of it like this: ETH is a savings account. stETH is a savings account that also lets you rent out your house, invest in a startup, and trade on the stock market-all at the same time.

    And the fact that Curve’s stETH/ETH pool has $150M+ daily volume? That’s not luck. That’s design.

    Most people think DeFi is complicated. But Lido made it stupid simple. Stake → get stETH → use it. Done.

    And yes, the tax tracking is a pain. But it’s the price of freedom. You’re not just staking. You’re building.

    Also, never stake less than 0.1 ETH. Gas fees eat tiny amounts alive.

  • Image placeholder

    Sierra Rustami

    November 24, 2025 AT 15:02

    USA for staking. Why are we letting some decentralized thing from Europe run our crypto? Coinbase is American. Coinbase is safe. Lido? Who even runs it? Some anonymous DAO? No thanks.

    Also, why would I want my ETH to be ‘used’ in some weird DeFi app? I just want to hold and sell later.

    Staking is for losers who don’t trust the system.

  • Image placeholder

    Glen Meyer

    November 25, 2025 AT 21:33

    you guys are all so naive

    lido is a russian front

    they’re collecting all our eth to crash the chain

    they’re working with the feds

    why else would they let anyone stake 0.01 eth? it’s a trap

    hold eth. dont touch steth. dont trust the system

  • Image placeholder

    Christopher Evans

    November 26, 2025 AT 08:02

    Thank you for the detailed breakdown. The clarity on unstaking delays and tax implications is particularly valuable. I appreciate the emphasis on using only lido.fi-this is critical advice.

    I’ve been staking for six months and have not encountered any issues. The transparency of the protocol is commendable.

    For those concerned about centralization: Lido’s governance model is evolving, and active participation via LDO voting is the best safeguard.

    Proceed with awareness, not fear.

  • Image placeholder

    Ryan McCarthy

    November 28, 2025 AT 01:34

    Staked my first 0.1 ETH last week. My stETH balance went up by 0.00007 today. I didn’t do anything. I just… watched. And it grew.

    That’s the magic. You’re not working for it. The network is.

    And now I’m trying out Aave. Just deposited 0.05 stETH. Got 0.00001 more in interest. I’m basically a crypto landlord now.

    Also, I used MetaMask. It was easy. No panic. No confusion.

    And yeah, stETH > ETH. It’s not a mistake. It’s math. It’s rewards.

    Keep it simple. Stake. Watch. Repeat.

  • Image placeholder

    Abelard Rocker

    November 28, 2025 AT 22:14

    Let me tell you something you won’t hear from the Lido marketing team.

    stETH is a time bomb wrapped in a DeFi glitter bomb.

    Yes, it’s liquid. Yes, it’s easy. Yes, you earn yield. But here’s the real question: What happens when the market realizes that stETH is not ETH? What happens when the premium collapses? What happens when the 32% staked ETH becomes a single point of failure?

    Remember Terra? Remember Celsius? They looked safe too.

    Lido’s smart contracts are audited. So were theirs.

    And what about the 18-36 hour unstaking delay? That’s not a feature-it’s a crisis buffer. Meaning: if everyone tries to exit at once, the system slows down to avoid collapse.

    And the fact that LDO holders control the treasury? That’s not democracy. That’s a cabal.

    Don’t get me wrong-I’ve staked. I’m earning. But I’m not sleeping with my wallet open.

    This isn’t finance. It’s a confidence game.

    And the people who say ‘just use Koinly for taxes’? They’re not thinking about the next bear market.

    When ETH crashes 70%, will stETH still trade at a premium? Or will it crash harder because everyone’s trying to exit?

    Be smart. Be scared. Don’t be a sheep.

  • Image placeholder

    Hope Aubrey

    November 30, 2025 AT 12:52

    OMG I JUST STAKED MY FIRST ETH AND NOW MY BALANCE IS GROWING ON ITS OWN?? 😱

    AND I’M GETTING CRV REWARDS TOO??

    THIS IS LIKE A MAGIC MONEY TREE BUT I DIDN’T EVEN PLANT IT

    also lido is so much better than coinbase bc i can use it everywhere

    but why does my steth cost more than eth?? is that normal??

    also tax is scary but i’m using token tax so i’m fine??

  • Image placeholder

    andrew seeby

    December 1, 2025 AT 01:46

    staked 0.1 eth on lido. got steth. balance went up by 0.00007 today. i didn’t do anything. just checked my wallet. felt like a wizard.

    also used meta mask. worked first try. no drama.

    now im putting it on curve. hoping for crv. also trying aave.

    lido is just… nice. like a warm blanket for your eth.

    and yes, steth > eth. its not a glitch. its the reward.

    also i think lido v3 will be the real game changer. partial unstaking? yes please.

Write a comment