Due to the introduction of Ethereum 2.0, the concept of proof-of-stake (PoS) is taking the world by storm. While this concept promises many benefits, it also comes with some drawbacks.
Fortunately, alternative platforms offer liquid stakings, such as StakeHound, that allow you to stake and wrap your tokens into stETH without a minimum required amount and lock-up period.
But what exactly is stETH, and how can you benefit from it? Essentially, stETH is a wrapped token offered by StakeHound that allows users to wrap their assets as a 1:1 peg with the underlying asset. This permits users to participate in DeFi while still receiving staking rewards.
What is stETH?
The launch of ETH 2.0 allows users to stake their tokens and receive passive income, which is attractive for those who have at least 32 ETH lying around and don’t mind sacrificing the liquidity of their assets for two years due to a lock-up. However, most everyday users want full control over their assets and prefer to stay as liquid as possible. This is where StakeHound comes in. To enjoy liquid staking, users can wrap their ETH into stETH with StakeHound.
stETH is a wrapped token with a 1:1 representation of the user’s underlying ETH. After a user onboards their ETH, StakeHound stakes those ETH for the users and redistributes the rewards to stETH. That way, the stETH allows you to receive ETH 2.0 staking rewards without the minimum staking requirement and no lock-up period as stETH can be sold at any time, for example, on Uniswap.
StakeHound and Wrapping
Decentralized finance (DeFi) provides financial services and products by utilizing smart contracts on the blockchain without relying on any central entity. Until now, DeFi applications are mostly built on the Ethereum network. To participate in this network, users must own ERC-20 tokens. If you don’t own them, wrapping non-ERC-20 tokens can help you create a compatible token specific to comply with the network’s architecture. StakeHound can help you with this.
StakeHounds’s goal is to bridge the worlds of staking and DeFi together. To achieve this goal, Stakehound wraps users’ non-ERC-20 tokens, storing them with our custody partners Copper.io and Fireblocks and then issuing stETH back to the users.
Staking rewards earned are distributed to users’ accounts, allowing them to earn passive income still and increase their balance. Issued stETH follows the ERC20 standard, which means that users can freely transfer, trade, and use them in DeFi platforms, unlocking liquidity previously locked up in staking.
Through stETH, users can now have the freedom to use their staked tokens, participate in DeFi, collateralize their assets, or exchange it with other tokens. All of those advantages allow users to earn staking rewards without experiencing the lock-up period. Users can now withdraw their staked tokens whenever they want.
The launching of ETH 2.0 and its switch from proof-of-work (PoW) to PoS opens up many opportunities to participants. Using StakeHound, users do not require a minimum stake of 32 ETH that will be locked up for two years and the setup and maintenance of validator nodes. Instead, StakeHound allows users to get the same rewards while promoting liquidity. The platform also allows users to participate in DeFi by issuing stETH; a token backed 1:1 by ETH.
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