Wrapped Staked ETH

Definition ∞ Wrapped Staked ETH refers to a derivative token that represents Ethereum (ETH) which has been staked on the Ethereum 2.0 Beacon Chain. This wrapped token allows stakers to maintain liquidity for their otherwise locked ETH, enabling its use in decentralized finance applications. It typically accrues staking rewards directly, reflecting the yield generated from securing the Ethereum network. Such tokens are crucial for enhancing capital efficiency for Ethereum stakers.
Context ∞ Wrapped staked ETH is a key asset in decentralized finance news, particularly within the liquid staking and lending protocols on Ethereum. Discussions often focus on the peg stability of these wrapped tokens to underlying staked ETH and the associated smart contract risks. Future developments aim to increase the utility and acceptance of various wrapped staked ETH derivatives across the DeFi ecosystem. These tokens are central to the growth of liquid staking and its impact on Ethereum’s economic security.