If you hold stETH, what exactly do you have to wait for when exiting?
“Liquid” in “liquid staking” can easily be taken to mean that you can get your ETH back at any time, at the original price, and directly. Before taking action, first distinguish between the two exit paths.
Using Lido’s publicly documented mechanism as an example:
First, withdraw through the protocol. After submitting a withdrawal request, you wait for it to be processed and then claim your ETH. Lido issues a token representing your claim to the withdrawal. “Submitted” and “ready to claim” are two separate stages. Seeing that your request was successfully created does not mean the ETH is back in your wallet.
Second, exchange stETH or wstETH for other assets on the secondary market. In this case, you accept the exchange terms the market offers at that time. The outcome depends on price, liquidity, and fees. The speed of exiting through the market and the wait time in the protocol’s withdrawal queue are subject to different constraints.
Why distinguish between them first? Suppose someone needs to use ETH tomorrow but sees only that it is “tradable” and assumes that a protocol withdrawal is also guaranteed to arrive tomorrow. Their plans could run into trouble. This example only illustrates the difference between liquidity and withdrawal timing; it does not assume that any platform will necessarily be delayed.
When checking your exit arrangements, keep these three points in mind:
1. Are you withdrawing through the protocol or exchanging on the market?
2. Does the page show an estimated wait time, or is the request already ready to claim? The estimated time may change as the queue changes.
3. Do you continue earning rewards while you wait? Lido’s withdrawal queue rules state that tokens in the queue do not continue earning staking rewards during that period.
One more caveat: LSTs remain subject to staking-related risks, and also carry risks such as smart contract, governance, and market liquidity risks. The fact that they are transferable only means there is an additional exit path; it does not replace the need to understand the underlying mechanisms.
Lido is used above as a specific example to explain the mechanism; this is not a product recommendation. Withdrawal and reward rules should be checked separately for other protocols.
#Ethereum #LiquidStaking #RiskManagement
“Liquid” in “liquid staking” can easily be taken to mean that you can get your ETH back at any time, at the original price, and directly. Before taking action, first distinguish between the two exit paths.
Using Lido’s publicly documented mechanism as an example:
First, withdraw through the protocol. After submitting a withdrawal request, you wait for it to be processed and then claim your ETH. Lido issues a token representing your claim to the withdrawal. “Submitted” and “ready to claim” are two separate stages. Seeing that your request was successfully created does not mean the ETH is back in your wallet.
Second, exchange stETH or wstETH for other assets on the secondary market. In this case, you accept the exchange terms the market offers at that time. The outcome depends on price, liquidity, and fees. The speed of exiting through the market and the wait time in the protocol’s withdrawal queue are subject to different constraints.
Why distinguish between them first? Suppose someone needs to use ETH tomorrow but sees only that it is “tradable” and assumes that a protocol withdrawal is also guaranteed to arrive tomorrow. Their plans could run into trouble. This example only illustrates the difference between liquidity and withdrawal timing; it does not assume that any platform will necessarily be delayed.
When checking your exit arrangements, keep these three points in mind:
1. Are you withdrawing through the protocol or exchanging on the market?
2. Does the page show an estimated wait time, or is the request already ready to claim? The estimated time may change as the queue changes.
3. Do you continue earning rewards while you wait? Lido’s withdrawal queue rules state that tokens in the queue do not continue earning staking rewards during that period.
One more caveat: LSTs remain subject to staking-related risks, and also carry risks such as smart contract, governance, and market liquidity risks. The fact that they are transferable only means there is an additional exit path; it does not replace the need to understand the underlying mechanisms.
Lido is used above as a specific example to explain the mechanism; this is not a product recommendation. Withdrawal and reward rules should be checked separately for other protocols.
#Ethereum #LiquidStaking #RiskManagement