What is Lido?

Lido is a liquid staking protocol that routes users’ ETH to validator operators and represents their stake with tokens. Depositing ETH into its shared pool produces stETH. Users do not operate the validators themselves: controlling the token in a wallet does not mean controlling the validator keys behind it.

stETH, wstETH and LDO have different roles

The stETH balance can change through accounting updates reflecting pool rewards and losses. wstETH wraps stETH: the number of tokens stays fixed while the amount of stETH represented by each token changes. Wrapping does not create a second, independent yield. Lido’s token documentation explains both accounting models.

LDO is a governance token; holding it does not stake ETH or earn stETH rewards. Lido combines LDO voting with Dual Governance, which gives stETH holders a way to challenge decisions. Those rights are distinct.

Example

Suppose 1 wstETH represents 1.20 stETH. Holding 2 wstETH then represents 2.40 stETH. If the conversion rate later reaches 1.236, those same 2 wstETH represent 2.472 stETH; the wallet still shows 2 wstETH. These are hypothetical rates, not current prices or promised returns. The wstETH contract calculates conversions using the token quantity and exchange rate.

Selling a token on a market and withdrawing ETH through the protocol are different transactions. The market price may diverge from the represented asset value; protocol withdrawals face queues and potential losses. Neither governance rights nor withdrawal conditions can be inferred from a token’s name.

The Lido analysis examines reward allocation and LDO’s economic rights; the staking comparison covers the choice between solo operation and a liquid pool.