Provide liquidity through wstETH

Liquidity providers are able to choose one or more pools to deposite tokens. With depositing the tokens, liquidity providers should set the collateral ratio, interest rate and deposit time. Only when the tokensis lent out, will the depositor's interest begin accumulating.

In singular Protocal, wstETH(in Lido) is used to provide liquidity.

What is stETH (wstETH)?

it is stETH which is deposited into the stETH wrapper to create a new token called wstETH.

stETH is a token that represents staked ether in Lido, combining the value of initial deposit + staking rewards. stETH tokens are minted upon deposit and burned when redeemed. stETH token balances are issued 1:1 to the ethers that are staked by Lido. stETH token’s balances are updated when the oracle reports change in total stake every day.

stETH token lets you get staking rewards for every day of holding these tokens in your wallet. They are fully liquid, so you can use them for your needs at any time

Why wstETH is used to provide liquidity?

wstETH is the wrapped staked ETH. By staking ETH and obtaining wstETH, liquidity providers can earn staking rewards in addition to lending interest. This significantly increases the total yield for liquidity providers.

wstETH remains liquid while earning staking rewards. Liquidity providers do not need to lock ETH for an extended period or maintain staking infrastructure. They can utilize or withdraw wstETH freely at any time. This flexibility and liquidity are particularly suitable for lending and borrowing.

The value of stETH tracks ETH at a 1:1 ratio. stETH can be used same as ETH in lending, borrowing and other DeFi applications. This makes the overall user experience more consistent and seamless.