In this article, we aim to discuss about the pools most commonly used to swap in and out of stETH. And also finding the most common pairs and which pools are most often used.
What is stETH Token ?
A staked ETH token is an ERC20 token in Lido. Once a deposit is made, the token is minted and burned when redeemed. Ethers staked by Lido are pegged 1:1 to the balance of the stETH token. Every day the oracle reports the change in stake, which is when stETH token balances are updated.
Staking and mining are two different phenomena related to cryptocurrency that are used for creating new coins and circulating them on the market. In mining, a miner solves computational equations to mine new coins and get rewarded. As part of staking, a staker deposits money into a cryptocurrency wallet to support the security and operation of a blockchain network. In its simplest form, staking is the process of locking cryptocurrencies to receive rewards for holding them.
Staking is a term used to refer to the delegating of a certain number of tokens to the governance model of the blockchain and thus locking them out of circulation for a specified length of timeNicole DeCicco
The purpose of this post is to identify the pools most commonly used for swapping in and out of stETH. The following graph shows the weekly swaps and transactions for stETH. For the week of Apr 17-23, 2022 we can see a maximum number of tokens being swapped and a maximum amount of transactions being made to StETH from WETH pool. We can see that most swap transactions were between the pairs stETH-WETH and WETH-stETH.
Lets discuss about the small introduction about merging of ethereum, With the merge, Ethereum makes the transition from proof-of-work (PoW) to proof-of-stake (PoS). The proof-of-work method of consensus on the blockchain relies on the lockup of a staker’s Ethereum. Computing power is required to secure blockchain consensus. This is done by people (miners) who secure the network.
In order to solve the blockchain trilemma, Ethereum has worked on a variety of problems:
Security , decentralization and scalability The blockchain so far has compromised on at least one of these features. However, it is still helpful.
By this we can have different benefits , The Merge allows for decentralization and security by requiring a minimal number of nodes and reducing the amount of work required to run nodes Compared to PoW, PoS requires 99% less energy Through scalability, it opens the possibility of sharding and 100k TPS in the future.
The Ethereum merge is again postponed to June . We can see that from the below tweet.
It won’t be June, but likely in the few months after. No firm date yet, but we’re definitely in the final chapter of PoW on Ethereum— Tim Beiko | timbeiko.eth 🔥🧱 (@TimBeiko) April 12, 2022
From the below graphs we can see the swap transactions which are done between these 2 pairs (stETH-WETH and WETH-stETH) from past 3 months on weekly basis. There was a maximum of 95 transactions during the week of April (17-23), 2022. We could see a maximum of 223.67 tokens during the same week. Transactions and tokens show an increasing trend. Possibly the Ethereum Merge is very close to its release date, and users are rapidly staking Ethereum due to the many advantages it offers. .
From the below graph we can see the weekly swaps from stETH to WETH. In this we can see there are a maximum number swaps from stETH-WETH pool during the Feb27-Mar05 week 2022. And the maximum number of tokens were seen from stETH-WETH are on April 17-23, 2022 week. Both swaps and tokens are in increasing trend from this pool stETH-WETH.
From the below heat map we can clearly see on which day of the week there we can see a maximum number of swaps from stETH to ETH using Uniswap . Initially there is not much swaps from stETH to WETH . But later we can see the increasing trend of swaps from stETH to WETH .
From the below heat map we can clearly see on which day of the week there we can see a maximum number of swaps to stETH from WETH using Uniswap . Initially there is not much swaps to stETH from WETH . But later we can see the increasing trend of swaps to stETH from WETH .
Based on the analysis above, we can conclude that the most frequently used pools for swapping in and out of stETH are stETH – WETH. We find that the same pairs are most frequently used for swaps in and out of stETH.