How to Stake Ethereum on the Most Popular Staking Application Lido

Not everyone has 32 ethers required for direct staking on the beacon chain, the zero phase of the transition of the Ethereum blockchain to the proof-of-stake (PoS) consensus mechanism. To serve this community of smaller token holders, several projects have emerged that allow users to stake any amount they wish.

Some of the most popular applications offering small-volume staking include: RocketPool, Stafi, Lido, and several crypto exchanges. The yield on each varies, of course, but it is all relatively straightforward.

In this text, we will cover Lido, especially since it has become the most popular staking service, hosting over 32 percent of all 12.7 million ethers staked on the beacon chain, according to Dune Analytics. In terms of dollar value, this means that Lido currently hosts 7.4 billion dollars at current prices.

The process of investing in Lido is simple. By clicking the ‘Stake now’ button, you arrive at the staking dashboard. From there, you can choose from various PoS blockchains, including Solana, Kusama, Polygon, and Ethereum’s beacon chain.

After selecting Ethereum, you will be prompted to connect a Web3 wallet such as Coinbase Wallet, WalletConnect, or MetaMask, among others. The label ‘stETH’ stands for ‘staked ETH’, and that is the token you will receive after staking your ether through Lido.

It is somewhat like a receipt that shows you have staked ether in Lido, but it also means you can use that stETH in DeFi applications (such as creating DAI on Maker, for example).

This is because stETH has real monetary value while trying to track the price of Ethereum. Currently, however, sETH is trading at a slight discount to ether, according to Curve Finance.

The current yield of 4 percent is quite a generous return for such a simple task. Moreover, this yield is expected to increase after Ethereum completes its upgrade scheduled for August. 

– By merging with the proof-of-stake chain, the fees previously earned by miners will be transferred to those who stake. It is expected that this will result in yields between 7 and 12 percent – writes Lucas Outumuro from IntoTheBlock.