If you are new to cryptocurrency or staking, Lido is a good way to get started. This article will show you how you can stake your Ethereum tokens to earn interest on them. 

What is staking? 

By staking, you earn interest in your cryptocurrency holdings by depositing your Ethereum tokens to validators to secure the Ethereum network. They are rewarded with interest in their tokens. This type of staking will be available on beacon chain in the ETH2 (Ethereum 2.0) in the Proof of stake blockchain.

What is Lido? 

Lido is one of the largest staking platforms for Ethereum. It allows you to stake your Ethereum tokens without needing any complex infrastructure with a super simple and straightforward process. 

With Lido, you can stake your Ethereum rather than leaving it on your exchange or on another staking platform. By staking on Lido, your staked Ethereum will generate passive income for you. 

Lido’s primary goal is to eliminate the various problems associated with staking Ethereum, such as inaccessibility, immovability, liquidity, conversion, and more. By staking on Lido, you get complete control of your staked Ethereum without any restrictions in terms of the staked amount or the staked period. 

Advantages of Staking on Lido

As mentioned before, Lido gives complete freedom to stake your Ethereum without any restrictions and gives complete control over your staked Ethereum.

The following are the main advantages of staking on Lido is a liquid staking protocol that is completely non-custodial and decentralized, meaning you have full control over it, and it’s considered super flexible than self-staking. 

Advantage of Lido: 

  • Allow users to earn staking rewards without the need to lock up the tokens by giving stETH.
  • Allow users to earn staking rewards irrespective of the deposit amount, there’s no need to stake 32 ETH here
  • The risk of losing staked funds through software errors is reduced as compared to other methods
  • Developed it’s own liquid variant of staked ETH called stETH. They are the same value as ETH at 1:1 value

How to stake Ethereum on Lido? 

Now that you know a bit about staking, Lido and it’s advantages, let’s talk about how you can stake Ethereum on Lido. 

Lido offers an attractive 8% APR on the tokens staked. To stake Ethereum on Lido, follow the below steps. 

  1. Head over to the Lido staking platform and connect your wallet (Metamask is the easiest to use for this purpose)

  2. Once you click on connect wallet, you will be introduced to the different wallet options available
  3. Once connected, you will be able to see the available balance in your wallet
  4. Enter the amount of Ethereum to stake and click on “Stake”

  5. Confirm the transaction
  6. Once confirmed, there will be an equivalent amount of stETH you staked on Lido.

Withdrawing ETH From Lido

At the time of writing this article, you can only deposit ETH and withdrawals have not been enabled by the Ethereum Chain. So Lido cannot return the ETH since it’s a limitation of the Ethereum chain. It could take months before this is enabled.

However, they give out stETH that represents the ETH you just staked. 

What is stETH? 

If you are wondering what stETH is, it’s a token that represents the staked ether on Lido. The value of the stETH includes both the initially staked ether + the staking rewards. The value of stETH is set at the 1:1 value of the staked ether on Lido. 

You are free to trade this stETH or, redeem it for ETH whenever withdrawals are enabled.

How to trade stETH?

The stETH isn’t listed on most of the crypto exchanges but here’s how you can trade stETH. This method will show you how to connect your crypto wallet to DEX (Uniswap, Sushiswap, etc.)and trade stETH.

  1. To get started, download any wallet. But we recommend Metamask due to its vast integration. 
  2. Once downloaded, register and setup the crypto wallet. 
  3. Purchase Ethereum from Binance or any other cryptocurrency exchange and use your metamask wallet address to make the purchase. 
  4. Once you have the Ethereum in the metamask wallet, connect your wallet to DEX
  5. Use the Ethereum in your metamask wallet to trade with the stETH