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I see, so money is locked up but they'll deploy another smart contract that you have some stake in but you still have to find a buyer otherwise you are out of l

by e9 4y ago

I see, so money is locked up but they'll deploy another smart contract that you have some stake in but you still have to find a buyer otherwise you are out of luck and your money is actually locked up

pcthrowaway 4y ago
You don't "have to find a buyer", these are liquid tokens on Ethereum. So if you have 1 ETH, and you stake it with Lido (I think this is the largest staking pool), you get 1 stETH. Though if you want 1 stETH, you often would be better off buying it on a (decentralized) exchange (you could get a discount of 1% to 10%, though theoretically the discount could go higher in the future). when you hold your stETH on-chain, your balance rebases at the rate of the staking reward payout (minus, I think, some amount Lido takes out of this). For example, after a year, if the ETH staking reward was 10%, Lido might take 0.5% (which might go to their DAO, not sure). So you might end up with 1.095 stETH after one year. If you want to sell it, you can do it directly (again, likely at a discount to the price of ETH, though this might change depending on how easy it is to move in and out of staking once the details there are finalized) It's called liquid staking, because the tokenized share of the staking pool are tradable like any other token on Ethereum, meaning you just need a decentralized exchange, or a centralized exchange that supports it (of which I think stETH has a few) ---- edit: to clarify about not having to find a buyer, in case it's not obvious: there are various pools of funds referred to as "liquidity", which users wishing to transact on various markets can make trades from. These pools exist on both decentralized exchanges (through various types of automated market makers) as well as centralized exchanges (classically through an order book, same as the stock market). The only time you have to "find a buyer" (in crypto as well as in the stock market) is when you're looking to do what's called an OTC trade, which is typically just for institutional traders, as trading a large amount via an OTC arrangement will prevent a price movement which can otherwise occur (known as "slippage")

by e9 4y ago

pcthrowaway 4y ago

You don't "have to find a buyer", these are liquid tokens on Ethereum. So if you have 1 ETH, and you stake it with Lido (I think this is the largest staking pool), you get 1 stETH. Though if you want 1 stETH, you often would be better off buying it on a (decentralized) exchange (you could get a discount of 1% to 10%, though theoretically the discount could go higher in the future). when you hold your stETH on-chain, your balance rebases at the rate of the staking reward payout (minus, I think, some amount Lido takes out of this). For example, after a year, if the ETH staking reward was 10%, Lido might take 0.5% (which might go to their DAO, not sure). So you might end up with 1.095 stETH after one year. If you want to sell it, you can do it directly (again, likely at a discount to the price of ETH, though this might change depending on how easy it is to move in and out of staking once the details there are finalized) It's called liquid staking, because the tokenized share of the staking pool are tradable like any other token on Ethereum, meaning you just need a decentralized exchange, or a centralized exchange that supports it (of which I think stETH has a few) ---- edit: to clarify about not having to find a buyer, in case it's not obvious: there are various pools of funds referred to as "liquidity", which users wishing to transact on various markets can make trades from. These pools exist on both decentralized exchanges (through various types of automated market makers) as well as centralized exchanges (classically through an order book, same as the stock market). The only time you have to "find a buyer" (in crypto as well as in the stock market) is when you're looking to do what's called an OTC trade, which is typically just for institutional traders, as trading a large amount via an OTC arrangement will prevent a price movement which can otherwise occur (known as "slippage")