Introducing stETH: Lido's Staked Ether

stETH serves as a yield-bearing token accessible through Lido, a decentralized staking protocol. Users obtain stETH by depositing Ether into Lido's smart contract, which pools funds to stake on Ethereum. In return, users receive stETH tokens proportional to their deposit. As a rebasing token, stETH's value increases over time as Ethereum staking yields are distributed to holders. This feature makes stETH an appealing collateral option for platforms like eBTC, where the collateral's value appreciation enhances the safety of the borrowing environment.

Within the eBTC ecosystem, the protocol utilizes stETH as collateral to mint eBTC tokens. Users can initiate this process by opening Collateralized Debt Positions (CDPs), during which they have the flexibility to deposit various forms of ETH.

eBTC's interface provides users with the option to utilize zaps, facilitating the seamless conversion of their ETH, wETH, or wstETH into Lido's stETH. This streamlined process allows users to borrow eBTC directly and securely.

It's important to note that when utilizing zaps, users are not borrowing eBTC against ETH, wETH, or wstETH. Instead, the protocol automatically converts these assets into stETH on behalf of the user, which then serves as collateral.

For detailed instructions, please refer to the step-by-step guide on opening a CDP.