wstETH

02How yield accrues

wstETH is the non-rebasing wrapper of Lido's stETH. The underlying claim is the same (a pro-rata share of all ETH staked through Lido's validator set), but the share accounting differs: stETH is a rebasing token (your balance increases each day as staking rewards land), whereas wstETH keeps a fixed token count and represents each share's growing stETH-per-wstETH redemption rate. The wrapper exists because rebasing balances are clumsy collateral: most DeFi protocols (Fluid, Aave, Compound) account positions in token units rather than underlying claims, so a rebasing balance would re-price collateral arbitrarily. wstETH solves this by encoding the same staking yield as monotonic price appreciation against stETH. Yield source is Ethereum consensus + execution-layer rewards earned by Lido's permissioned node operator set (Lido currently runs ~25-30% of all Ethereum validators). Block proposals, attestations, sync-committee duties, and MEV-boost tips flow through Lido's withdrawal-credentials contract and are streamed back to stETH holders pro rata, with a 10% protocol fee split between node operators and the Lido DAO treasury. Net APR is therefore the consensus issuance rate (function of total ETH staked) plus the execution-layer take, minus the 10% fee, historically 3-4%. We snapshot the stETH-per-wstETH rate every 6h via on-chain getStETHByWstETH(1e18) at the snapshot block and compute the trailing 24h annualised growth. This is the cleanest possible reading: the rate is a direct on-chain function of the validator-side accounting, with no DEX price noise. Fluid imports the same rate into LL via the CappedRate handler, so wstETH supply APY on Fluid tracks the Lido net staking APR with sub-bp precision. Asset rating: AA (Prime). Lido has the longest Lindy of any onchain ETH staking protocol (Dec-2020 launch, >5y track record), validator set is diversified across 30+ vetted operators with slashing-coverage insurance, and the wrapper itself has been audited multiple times. Tail risks: (i) correlated slashing across operators (mitigated by Lido's operator-set diversification + insurance), (ii) Ethereum consensus failure (existential, not Lido-specific), (iii) governance: wstETH parameters and fee rate are controlled by Lido DAO.