What is Liquid Staking?

Liquid staking is the act of delegating your tokens to a service that stakes for you without losing access to your funds.

Liquid staking allows you to access your funds even when you’re staking them. The funds remain in escrow, but aren’t “locked” and inaccessible, as they would be with PoS staking.

When you stake coins you have to lock them up for a specified amount of time. During which you cannot sell or transfer your coins. If there is a market crash during your lock period, you won’t be able to act in a timely manner. With liquid staking, you can add and remove funds as you pleased (usually with a trade-off of lower APR)

Liquid staking offers the best of both worlds: a passive income and access to your staked funds.

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Observations:

• The rETH token, which is considered one of the staking derivatives from RocketPool, usually has a higher price than Ethereum, and the most significant difference in its price with Ethereum was between March 28, 2022, and May 5, 2022 ; in this period, the price of the rETH token was always higher than the price of Ethereum.
• Because the value of rETH is effectively constantly increasing relative to ETH and the rETH/ETH exchange rate is updated approximately every 24 hours based on Beacon Chain rewards earned by Rocket Pool operators, this token cannot be said to be depegged against Ethereum because it is not supposed that the price will always be equal to Ethereum.
• In only three days, the price of rETH has been lower than the price of Ethereum, which includes 1% of the days, and considering the type of token, it is considered a success for the Rocket Money team.
• The ratio of the price of the rETH token to Ethereum reached its highest level of 1.045 on April 4, 2022. Also, this ratio reached the lowest possible number of 0.997 on June 16, 2022.
• The average price ratio of rETH token to ethereum has been 1.018, which can be calculated as a profit of 1.8 over the entire time frame for the ethereum stake in RocketPool.

Methodology:

• I have used the Ethereum.core.fact_hourly_token_prices table to get the token prices.
• The ratio that I have used here is the price of the token divided by the price of Ethereum, if the price of the ratio is higher than 1, it means that the price of the token is higher than Ethereum, and if the ratio is one, then the price of the token and the price of Ethereum are equal, and if the ratio is less than one This means that the price of the token has been lower than the price of Ethereum.
• I have used the Ethereum.core.ez_dex_swaps table to get the transactions of these tokens.
• I got all the token addresses from the official sources of each token, i.e. their website.
• Unfortunately, due to the failure of the tables for the aETHb token for the ankr platform, I did not consider this token in my calculations, and only the aETHc token was considered from the ankr platform.

aETHc contract address: 0xe95a203b1a91a908f9b9ce46459d101078c2c3cb

rETH contract address: 0xae78736cd615f374d3085123a210448e74fc6393

stETH contract address: 0xae7ab96520de3a18e5e111b5eaab095312d7fe84

Observations:

• The stETH token, which is considered a staked derivative from Lido, usually has an equal price to Ethereum.

• Considering the functionality of this platform and the token, it is considered a success that the average price is equal to Ethereum because the stake rewards can be withdrawn every 24 hours, and the user is not rewarded through the token price difference. Therefore, whenever the price of the token has a massive difference with the price of Ethereum, and the ratio of the price of the stETH token to Ethereum is far from 1, it can be said that this token is depeg.

• The ratio of the price of stETH token to Ethereum is 0.989 on average, which is very good and close to peg. Still, during the process, we see that this token faced many challenges, especially on June 17, 2022, when this ratio reached 0.93, which is the lowest possible ratio during this token.

• This trend started since May 11, 2022, and if we look at the Ethereum price chart, we will feel a sharp drop in the price from this day.

• Of course, stETH de-pegging in those days was not the only reason for the sharp price drop, but the ban on transfers and withdrawals in Celius, as well as the debts of this company and its need to sell and transfer stETH, has led to a domino effect.

Observations:

• The aETHc token, which is Considered a stake derivative from Ankr, the aETHc token is usually priced lower than Ethereum.

• Given that the ratio of aETHc to ETH changes over time to reflect accumulated rewards, that means one aETHc is increasingly worth more than 1 ETH. And Your aETHc amount will not increase. Instead, the price of aETHc is expected to grow in ETH value, as your aETHc includes your original stake plus earned staking rewards. Therefore, we cannot expect aETHc token to be pegged with Ethereum. Also, the fact that there is no 1:1 ratio for staking and the price of this token is usually lower than Ethereum cannot be considered a weakness because users receive more than one aETHc token in exchange for one Ethereum stake.

• The average ratio of the price of aETHc token to Ethereum was 0.933, and only 16 days, the price of this token was higher than Ethereum, which includes 2.5% of the total days.

• The lowest price ratio of aETHc token to Ethereum happened on May 16, 2021, with a ratio of 0.61, which is very strange and thought-provoking.

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Observations:

• The rETH token had the highest dollar volume of transactions, with an amount of 425.3 million dollars.
• In second place is the stETH token, with a value of 90 million dollars.
• In the third place, the trading volume of aETHc token is with the amount of 38.9 million dollars. According to the logarithmic diagram, the slope of the total volume of the reth token is relatively higher than other tokens, which can indicate the increased activity of transactions in this token.

Observations:

• The UniSwap version 3 platform has the most significant trading volume of these tokens, with 347.3 million dollars.
• In the second place is the Balancer platform has a volume of 116.8 million dollars.
• UniSwap Version 2 is in third place with a volume of 90 million dollars.
• The last rank is Postform Sushi Swap, with a volume of 2500 dollars.

Observations:

• The most significant volume of swaps was made by the rETH-WETH pool, with an amount of 242 million dollars.

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• According to the top 10 pools, it can be understood that most users tend to exchange their derivative tokens with WETH.

Conclusion: The price trend of derivatives tokens is very reasonable, but some market events can take them out of what is expected. We only expect a price peg with Ethereum from the stETH token, which this token has fulfilled the expectation well. The most significant volume of transactions is related to the rETH token. Also, among the platforms, the most significant volume of transactions has occurred in Plefterm UniSwap version 3. Also, the largest volume of tokens has been exchanged with WETH, which shows the interests of users.