What Is stETH? The Token You Get for Staking ETH With Lido

stETH is the token Lido gives you when you stake ETH with it. Deposit 1 ETH and you get 1 stETH, and from then on the stETH balance in your wallet creeps upward as staking rewards arrive. It is not a separate coin to bet on. It is a claim on staked ETH that you can hold, trade or use elsewhere while the ETH itself stays with Lido's validators.

Where do the rewards show up?

In the balance itself, not as incoming payments. stETH rebases: roughly once a day the number in your wallet is adjusted upward, so 100 stETH quietly becomes 100.007 stETH with no transaction to click on. It behaves like a savings account that adds interest to the balance rather than sending you a transfer. The current net rate is around 2.4% a year after Lido's 10% cut of rewards, and it moves with how much ETH is staked network-wide.

Is one stETH always worth one ETH?

Through Lido, yes - you can redeem stETH for ETH one for one, and withdrawals have worked that way since Lido's 2023 upgrade, processed in order and usually taking one to five days. On the open market the price can slip below ETH, because a buyer who takes it off your hands inherits the wait. That is what happened in mid-2022, when withdrawals were not yet possible at all and stETH changed hands for around 0.94 ETH. A discount is the market pricing a queue, not a token coming apart - but it does mean you should never count on an instant exit at exactly par.

What is it used for?

Mostly as collateral. stETH is accepted on Aave, pooled on exchanges such as Uniswap and Curve, and plugged into well over a hundred other apps. The one catch is the rebase: a balance that changes on its own confuses contracts that were not built for it, which is why Lido also issues a fixed-balance version called wstETH for DeFi use.

If you hold stETH, check the balance rather than your transaction history - the rewards are invisible otherwise, and people regularly think they are not being paid. And before you borrow against it, assume the price can wobble below ETH on a bad week. Next: what liquid staking is and what wstETH is.