A liquid staking token is a claim on a staked position, not the staked asset itself. According to BitGo’s explainer on liquid staking derivatives, published 12 February 2026, these tokens “represent claims on underlying staked positions, not independent assets,” and the token “does not create additional value on its own” – it mirrors whatever the underlying stake is doing, subject to the rules of the protocol that issued it. Holding stETH or rETH means holding that claim, not the ether sitting behind it.
What differs between protocols is how the claim is represented in the token’s own accounting – and that difference changes what a holder sees in their wallet day to day.
Two accounting designs for the same claim
Lido’s stETH uses a rebasing design. According to Lido’s own blog, stETH balances update once a day when a Lido oracle reports changes in ETH2 deposits and in ETH rewards earned by users who stake through the protocol. Lido’s help centre describes stETH as “a transferable rebasing utility token representing a share of the total ETH staked through the protocol,” made up of user deposits plus accumulated staking rewards. In practice this means a holder’s stETH balance itself grows over time – the number of tokens in the wallet increases roughly daily as rewards are added, rather than the value of each token rising while the count stays flat.
Lido also offers a second design: wstETH. Per Lido’s own site describing how the two tokens work, wstETH is a non-rebasing wrapped version of stETH. Its balance stays fixed – the number of tokens in a wallet does not change – while the value of each token rises over time to reflect earned rewards. Lido’s site states that “the amount of stETH held can potentially grow automatically over time,” whereas wstETH instead grows in exchange rate rather than in count.
Rocket Pool also issues a liquid staking token, rETH. A Rocket Pool support page hosted by MetaMask, headlined “Rocket Pool / MetaMask Help,” addresses it – but only that headline could be verified for this piece, not the text beneath it. This page cannot say, on that basis, whether rETH’s balance mechanics resemble wstETH’s fixed-balance design, or how its redemption process behaves during network congestion. That is a real gap in what can be reported here, not an omission for brevity.
Redemption: how the claim turns back into ether
Turning the token back into the underlying asset is not uniform across protocols. BitGo’s explainer notes that “some protocols require token holders to initiate an unstaking process and wait through a network-defined exit period,” while others “rely more heavily on secondary market liquidity” – meaning a holder simply sells the token on an exchange or in a decentralised trading pool rather than redeeming it through the protocol itself. Lido’s own GitHub README for its core protocol states that the stETH token balance corresponds to “the amount of ether that the holder could request to withdraw,” describing an in-protocol withdrawal path, though the README does not specify timing or conditions for that withdrawal beyond noting that Lido’s smart contract stakes pooled deposits with DAO-selected node operators who, per that same README, never have direct access to users’ assets.
Why the token’s price can drift from the underlying value
Because a liquid staking token trades separately from the ether it claims a share of, its market price is not guaranteed to track that underlying value exactly. According to BitGo, pricing can diverge from underlying asset value; market conditions, redemption constraints and risk perception all influence how these derivatives trade, particularly during periods of volatility. BitGo adds that during volatile periods, derivatives may trade at a discount to the underlying asset, reflecting liquidity and exit uncertainty at that moment.
The common misreading
The mistake is treating a liquid staking token as fully interchangeable with the staked asset on demand – assuming 1 stETH or 1 rETH can always be swapped for the same amount of ETH at will. What the token actually promises is a claim on a staked position, redeemable through whatever process the issuing protocol has built, or sellable on a secondary market whose price can move away from that underlying value. Neither of those is the same as instant, guaranteed parity.
What this page does not tell you
This page does not say whether stETH, wstETH or rETH is currently trading at, above or below its underlying redemption value – that requires live market and on-chain data not included in the sources used here. It does not independently verify validator diversity, governance safeguards or smart-contract security for Lido or Rocket Pool; the claims above come from the protocols’ own documentation or from a vendor’s general commentary, not from an independent audit. It does not describe Rocket Pool’s accounting model or its exit process during network congestion, because only the headline of the available Rocket Pool source could be verified, not its content. And it covers only two Ethereum-based examples – stETH/wstETH and rETH – not the full range of liquid staking designs across other proof-of-stake networks.
Sources
Every fact above is attributed to one of these reports. Where they disagree, the article says so.
