Loopring Layer 2 ETH staking has arrived! Powered by Lido, earning daily rewards on your staked ETH is now cheap, fast, and simple.
Read on to learn more about Lido and how to stake ETH on Loopring Layer 2.
Lido is a liquid staking solution for Ethereum 2.0 backed by industry-leading staking providers. Lido lets users stake their ETH, i.e. deposit assets, on Ethereum 2.0 — without locking assets or maintaining infrastructure. Staking secures the Ethereum 2.0 network, and the rewards incentivize participation.
Lido attempts to solve the problems associated with initial ETH staking — illiquidity, immovability and accessibility — making staked ETH liquid and allowing for participation with any amount of ETH to improve security of the Ethereum 2.0 network.
When using Lido, users receive secure staking rewards in real-time, allowing for participation in the securing of Ethereum 2.0 with fewer associated risks and less downside potential.
Read more about Lido in the Lido FAQ.
Staked ETH (stETH)
Staked ETH (stETH) is a token that represents staked ether in Lido, combining the value of initial deposit + staking rewards — penalties. stETH tokens are minted upon deposit and burned when redeemed. stETH token balances are pegged 1:1 to the ETH that is staked using Lido. stETH token balances are updated when the oracle reports changes in total stake every day. It effectively acts as a bridge bringing Ethereum 2.0’s staking rewards to ETH 1.0.
stETH tokens can be used as one would use ETH, allowing users to earn ETH staking rewards whilst benefiting from, among other things, yields across other DeFi products.
Read more about stETH on Lido here.
Wrapped staked ETH (wstETH)
Wrapped staked ETH (wstETH) is the wrapped version of stETH. wstETH is the token that users who stake their ETH on Loopring Layer 2 will receive.
Unlike stETH, The total amount of wstETH doesn’t change after users receive the token. Rather, the wstETH’s token value increases over time to reflect ETH staking rewards earned, while the amount of tokens the user has remains the same. Because of this difference in reward distribution, wstETH is priced differently than stETH.
Read more about wstETH on Lido here.
How to stake ETH on Loopring Layer 2
Users can stake ETH to receive wstETH on Loopring Layer 2 via both the web app and the Loopring Wallet app.
Staking via Loopring.io
Connect a wallet to Loopring.io and unlock it. Navigate to the Earn page. Enter an amount of ETH to stake for wstETH. Take note of the amount of wstETH that will be received, as well as the fee. If satisfied, click Subscribe to receive the amount of wstETH shown and begin earning rewards on staked ETH.
Staking via Loopring Wallet
Open the Loopring Wallet app. Navigate to the Earn tab. Tap the ETH Staking button. Enter an amount of ETH to stake for wstETH. Take note of the amount of wstETH that will be received, as well as the fee. If satisfied, tap Subscribe to receive the amount of wstETH shown and begin earning rewards on staked ETH.
It is important to note that users can’t redeem wstETH for ETH until phase 2 of Ethereum 2.0. However, users are able to trade wstETH for ETH on various exchanges at market prices.
Loopring will provide a pool to allow users to trade wstETH for ETH directly on Layer 2. The pool will rebalance periodically when it reaches a specific threshold. If there is not enough inventory on Layer 2, users can always withdraw their wstETH tokens to Layer 1 and swap for ETH in Lido, Curve, or 1inch — or alternatively wait for the pool to rebalance and try again later.
There exist a number of potential risks when staking ETH using liquid staking protocols. Detailed information about Lido’s potential risks can be found here.
Loopring is an Ethereum Layer 2 zkRollup protocol for scalable, secure DeFi and NFT applications. Loopring builds non-custodial, high-performance products atop our L2, including the Loopring Wallet — a mobile Ethereum smart wallet, and the Loopring L2 web app — an L2 orderbook and AMM DEX. To learn more, follow us on Medium or see Loopring.org.