ETH liquid staking explained: stETH, rETH, cbETH and the risks of restaking

Liquid staking lets you stake ETH and still hold a transferable token that represents it. You deposit ETH with a protocol or exchange such as Lido, Rocket Pool or Coinbase, it runs validators, and you receive stETH, rETH or cbETH, which grows with staking rewards and can be sold, moved or used in DeFi. The convenience comes with extra layers of risk on top of normal staking. Crypto assets are volatile and this is not financial advice.

What is ETH liquid staking?

ETH liquid staking is pooled staking that gives you a liquid staking token (LST) in return for your ETH. Ethereum.org describes an LST as “an ERC-20 token that represents a claim on staked ETH and the rewards it earns.” Instead of waiting in Ethereum’s exit queue to get your ETH back, you can sell the token on the market or redeem it through the protocol.

Ordinary staking locks ETH in a validator: solo staking needs 32 ETH and your own node, and exiting takes time. Liquid staking accepts small amounts (Rocket Pool from 0.01 ETH, Lido any amount) and hands you a token you can use elsewhere, for example as collateral on a lending market. Ethereum.org stresses one subtlety: the protocol “doesn’t know your token exists”, so your claim depends on the provider’s smart contracts and operators rather than on Ethereum itself (ethereum.org).

For the full set of staking routes, from solo nodes to exchange staking, and how protocol rewards are set, see how to stake Ethereum. Background on proof of stake is in our Ethereum explainer.

How do stETH, rETH and cbETH earn rewards?

There are two designs. Lido’s stETH is a rebasing token: your stETH balance increases daily when Lido’s oracle reports validator balances. Rocket Pool’s rETH, Coinbase’s cbETH and Lido’s wrapped wstETH keep a fixed number of tokens, and each token becomes redeemable for more ETH over time through a rising exchange rate.

Lido’s integration guide puts it plainly: “the stETH balance updates regularly”, while “the wstETH balance does not change on its own but rather increases in value against stETH” (Lido docs). Many DeFi apps and bridges prefer wstETH because a changing balance breaks their accounting.

Coinbase says cbETH “represents 1 staked ETH plus all of its accrued staking rewards” from when its conversion rate was initialised on 16 June 2022, so cbETH and ETH trade at different prices by design (Coinbase Help). Rocket Pool says “rETH earns rewards over time increasing its value” (Rocket Pool).

Rebasing versus exchange-rate matters for records: with stETH you receive many small balance increases; with rETH or cbETH the gain shows up only when you sell or redeem. Tax treatment of each is still unsettled in several countries; see crypto taxes by country.

Which liquid staking providers are there, and what do they charge?

The three best-known ETH liquid staking tokens are Lido’s stETH, Rocket Pool’s rETH and Coinbase’s cbETH. Lido takes 10% of staking rewards, split between node operators and the Lido DAO treasury. Coinbase advertises “a simple 10% commission” on cbETH rewards, against its 35% standard commission for regular ETH staking on the platform. Rocket Pool’s node operators take a commission set by the protocol.

Sources: Lido docs, Lido Help, Rocket Pool, Coinbase cbETH and Coinbase fee disclosures, checked November 2026. Lido’s fee can be changed by a DAO vote; Coinbase One members pay a lower standard staking commission (25.25% to 31.75% by tier). Read the provider’s own page before staking, and see our Coinbase review for the platform itself.

How much of all staked ETH is liquid staked with Lido?

Lido is the largest single staking provider. As of 7 November 2026, Lido’s API reported 9.70 million ETH staked through stETH, while validatorqueue.com showed about 44.4 million ETH staked on Ethereum in total, 36.37% of supply. That puts Lido at roughly 22% of all staked ETH, below the one-third level often cited as a concentration concern.

Why the share matters: Ethereum’s consensus needs two-thirds of staked ETH to finalise blocks, so a single provider controlling a third or more could, in principle, halt finality, and one controlling two-thirds could finalise blocks on its own terms. Lido spreads stake across many node operators, but token holders still share a single set of smart contracts and governance. Ethereum.org recommends pools with “permissionless, distributed operator sets” and warns that concentration can lead to “censorship, value extraction, and single points of failure” (ethereum.org).

The figures change daily: check Lido’s stETH stats and validatorqueue.com for current numbers.

How do you get ETH back from liquid staking?

You have two routes: redeem through the protocol or sell the token. Lido’s withdrawal queue usually takes 1 to 5 days under normal conditions, and you receive an NFT that marks your place in line. Selling stETH, rETH or cbETH on an exchange or DEX is immediate, but the price may sit below the ETH it represents when many holders want out at once.

Lido processes requests first-in, first-out. Its help centre lists what slows things down: a large queue, “bunker mode” (an emergency state triggered by events like mass slashings), and the beacon chain’s own exit queue when validators have to leave (Lido Help). The withdrawal NFT can be transferred, and its new owner can claim the ETH (Lido docs).

Ethereum’s queues move both ways. On 7 November 2026 validatorqueue.com showed about 979,724 ETH waiting to enter staking (an estimated 17 days) and 4,183 ETH waiting to exit (about 1 day). A long exit queue is when liquid staking tokens are most useful, and also when their market price is most likely to slip.

Rocket Pool lets holders “unstake at any time with no minimum lock up periods” by burning rETH when the protocol has liquidity, or by swapping on a DEX. Coinbase users unwrap cbETH back into staked ETH and then unstake; Coinbase charges a fee only for instant unstaking.

What are the risks of liquid staking?

Liquid staking keeps all the risks of staking (validator penalties and slashing) and adds smart-contract risk, price risk when the token trades below ETH, governance risk, and counterparty or regulatory risk for exchange-issued tokens. Lido’s own documentation notes that “up to 100% of staked funds” are at risk if validators fail, which is why it spreads stake across operators and holds self-coverage.

• Smart-contract risk: your ETH sits in contracts that “could contain bugs or be exploited”, in ethereum.org’s words. Prefer audited, open-source code with a long track record.
• Depeg or discount risk: an LST is only worth its redemption value if you can redeem. In a rush for the exit, market prices can trade below the underlying ETH, which hurts anyone forced to sell, for example to repay a loan.
• Leverage loops: borrowing ETH against stETH to stake again magnifies both yield and liquidation risk if the discount widens.
• Centralisation and governance: a DAO vote can change fees or operator sets; a company can change terms or regional availability.
• Custodial and regulatory risk: cbETH is minted only by Coinbase and depends on Coinbase’s custody and its regional eligibility rules. See is it safe to keep crypto on an exchange.
• Phishing: fake staking sites and “claim your rewards” airdrops target LST holders. Reach staking apps by typing the address, and keep a hardware wallet for large balances (Ledger vs Trezor vs Coldcard).

What is restaking, and why is EigenLayer riskier than plain staking?

Restaking means using already-staked ETH, or a liquid staking token, to secure additional services on top of Ethereum in exchange for extra rewards. EigenLayer is the largest restaking protocol. The catch is extra slashing: services built on EigenLayer, called AVSs, can slash the stake operators allocate to them, according to rules each AVS designs, so restakers can lose ETH for failures outside Ethereum’s own rules.

EigenLayer’s documentation says AVSs “have flexibility to design their protocols to slash for any reason” and that slashing “does not have to be objectively attributable (that is, provable onchain)”. An AVS can slash an operator’s “Unique Stake” allocated to one of its operator sets, and slashed funds are burned or, with Redistributable Operator Sets, redistributed. A slash resolution delay of 7 days applies before slashed shares are cleared (EigenLayer docs).

The documentation itself warns that stakers “should carefully consider the AVSs that their delegated Operators are running” and that redistributable sets “may offer higher rewards, but these should be considered against the increased slashing risks.” Liquid restaking tokens, which wrap restaked positions into another tradable token, stack one more contract and one more redemption queue on top. Each layer adds yield and adds a way to lose principal.

How do you start liquid staking safely?

Start small and check each step. Reach the provider’s app by typing its address, connect a wallet you control (ideally with a hardware wallet), confirm the token contract address on the provider’s own documentation, stake a test amount, and check that the LST arrives in your wallet. Only then add more, and keep the transaction hashes for your records.

• Verify the token: look-alike tokens with the same ticker exist on every chain. Add stETH, wstETH, rETH or cbETH from the contract address the provider publishes, not from a search result.
• Read what you sign: staking ETH is a deposit transaction; an unexpected “approve” or “permit” request for tokens you already hold is a warning sign.
• Know your exit: decide in advance whether you would redeem through the queue or sell on the market, and how long you could wait.
• Bridged versions differ: wstETH or rETH on a layer 2 is a bridged representation with an extra bridge contract; redeeming for ETH may first require bridging back to Ethereum mainnet.

Is liquid staking better than staking on an exchange or solo staking?

It depends on what you value. Solo staking keeps 100% of rewards and removes intermediaries but needs 32 ETH and a node. Liquid staking suits holders who want rewards on smaller amounts and the option to sell quickly, in exchange for smart-contract and depeg risk. Exchange staking is simplest but leaves custody with the exchange and often charges the highest commission.

Whatever route you choose, staking yields are variable and set by the protocol, not promised by the provider. Comparing Ethereum with other proof-of-stake chains? See Solana vs Ethereum.