Wrapped Staked Ethereum on Lido
Dollar cost average into wstETH - liquid staked Ethereum earning yield through Lido.
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Dollar cost average into wstETH - liquid staked Ethereum earning yield through Lido.
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Current APR earned can be found here https://lido.fi/ethereum
WETH sent to an Amasa account which has setup Swap to Lido Staked ETH in Auto Allocation, automatically enters a set of smart contracts and is swapped to wstETH via decentralized exchange ( Uniswap ).
The percentage of WETH swapped to wstETH will match the set percentage chosen by the user in their Auto Allocation.
As part of the same transaction executed by the smart contracts, the user wallet address which was connected to setup the Amasa account will be sent the wstETH.
This asset is then held by, and under the control of the user, not the smart contracts or Amasa. When rebalancing a portfolio, a user can swap existing assets back to WETH from their dashboard and deposit into their updated Auto Allocation. This may be done if a user wants to change their approach from Stabilise to Amplify or vice versa.
Users can independently confirm and track all transactions on Arbiscan.
Risk Disclaimer
The DeFi space is not without risk. It is highly recommended to do your own research and only supply assets you can afford to lose. Read Risk Disclaimer
What is wstETH?
An introduction to Lido
Lido is a multi-platform staking solution that allows users to access the benefits of staking their crypto without fully locking their tokens. In Proof of Stake (PoS) networks, users can lock their digital assets through staking to participate in the consensus process and continue adding blocks to the blockchain. In exchange for locking their funds and maintaining the blockchain, stakers earn rewards in the form of interest from the network. Liquid staking allows for staked tokens to be used in defi protocols and apps. That is the basis for Lido, a liquid staking solution. When a user stakes ETH through Lido (rather than directly through the Ethereum blockchain), they receive stETH (staked ETH) tokens in return which are not locked and are freely transferable. The tokens still receive regular interest rewards.
wstETH - Wrapped stETH that can be bought and sold
Due to the rebasing nature of stETH, the stETH balance on the holder's address is not constant, it changes daily as oracle report comes in. Although rebasable tokens are becoming a common thing in DeFi recently, many dApps do not support rebasing. For example, Maker, UniSwap, and SushiSwap are not designed for rebasable tokens. Listing stETH on these apps can result in holders not receiving their daily staking rewards which effectively defeats the benefits of liquid staking. To integrate with such dApps, there's another form of Lido stTokens called wstETH (wrapped staked ether). This works with Amasa in a straightforward way because it can be swapped for ETH and other tokens on decentralized exchanges. wstETH is an ERC20 token that represents an account's share of the stETH total supply (stETH token wrapper with static balances). wstETH balance does not rebase, wstETH's price denominated in stETH changes instead. At any given time, anyone holding wstETH can convert any amount of it to stETH at a fixed rate, and vice versa. The rate is the same for everyone at any given moment. Normally, the rate gets updated once a day, when stETH undergoes a rebase.
Risks with using Lido products
Sourced from https://docs.lido.fi/guides/steth-integration-guide/#risks :
Smart contract security. There is an inherent risk that Lido could contain a smart contract vulnerability or bug. The Lido code is open-sourced, audited and covered by an extensive bug bounty program to minimize this risk. To mitigate smart contract risks, all of the core Lido contracts are audited. Audit reports can be found here. Besides, Lido is covered with a massive Immunefi bug-bounty program.
Beacon chain - Technical risk. Lido is built atop experimental technology under active development, and there is no guarantee that the Beacon Chain has been developed error-free. Any vulnerabilities inherent to the Beacon Chain bring with it slashing risk, as well as stETH balance fluctuation risk.
Slashing risk. Beacon chain validators risk staking penalties, with up to 100% of staked funds at risk if validators fail. To minimize this risk, Lido stakes across multiple professional and reputable node operators with heterogeneous setups, with additional mitigation in the form of self-coverage. stETH price risk.
Users risk an exchange price of stETH which is lower than inherent value due to withdrawal restrictions on Lido, making arbitrage and risk-free market-making impossible.
The Lido DAO is driven to mitigate the above risks and eliminate them to the extent possible. Despite this, they may still exist and, as such, we must communicate them.
