Liquid staking tokens (LSTs) let you earn staking yield while keeping your assets usable in DeFi. But stETH, cbETH, rETH, and mSOL are meaningfully different products. Here's what matters when choosing.
The Basics: Why LSTs Exist
Staking ETH natively on the beacon chain requires 32 ETH (~$115k at $3,600 ETH) and locks your funds during withdrawal queues. Staking SOL natively locks your SOL for the ~2-3 day unstaking period.
Liquid staking protocols pool user deposits, stake on your behalf, and give you a token representing your staked position. The token accrues staking yield and can be used in DeFi — swap it, use it as collateral, provide liquidity.
Ethereum LSTs
stETH (Lido)
- Model: Rebasing token — your stETH balance increases daily to reflect accrued rewards
- Yield: ~3.3% APY (Lido takes 10% fee on rewards)
- Decentralization: Lido uses ~30 curated node operators; not permissionless. Lido holds ~30% of all staked ETH — a centralization concern for Ethereum's health
- DeFi: Deepest liquidity of any LST. Used as collateral everywhere (Aave, Compound, MakerDAO). stETH/ETH Curve pool is one of DeFi's most liquid pools
- Wrapped form: wstETH is the non-rebasing version — preferred for DeFi protocols that can't handle rebasing tokens
Best for: Maximum DeFi composability; deep liquidity in every major protocol.
cbETH (Coinbase)
- Model: Value-accruing token — price increases vs ETH over time; balance stays constant
- Yield: ~2.9% APY (Coinbase takes ~25% fee — the highest of any major LST)
- Decentralization: Centralized — Coinbase operates all validators
- DeFi: Good liquidity on Ethereum; accepted by major lending protocols
- Regulatory advantage: Coinbase is a US-regulated entity; some institutions prefer cbETH for compliance reasons
Best for: Institutional investors requiring regulated custodian; US compliance focus.
rETH (Rocket Pool)
- Model: Value-accruing token
- Yield: ~3.4% APY (Rocket Pool takes ~14% fee, lower than Lido)
- Decentralization: Most decentralized major LST — permissionless node operators who stake 8 ETH collateral (plus 16 ETH user funds). Anyone can run a Rocket Pool node
- Smart contract risk: More complex system (collateral mechanics); has been audited but carries more moving parts than Lido's simpler design
- DeFi: Good but lower liquidity than stETH. rETH/ETH pools exist on Curve, Balancer, and Uniswap
Best for: Users prioritizing decentralization and who want to support permissionless staking infrastructure.
frxETH / sfrxETH (Frax)
- Model: Two-token system — frxETH is the liquid token (no yield), sfrxETH is the staked version (all yield concentrated here)
- Yield: ~3.8-4.2% APY on sfrxETH — higher because only sfrxETH holders earn rewards (frxETH LP providers earn separately)
- Decentralization: Semi-decentralized validators; governance via FRAX protocol
- DeFi: frxETH/ETH on Curve has attracted significant liquidity through Frax incentives
Best for: Users who want maximum ETH staking yield and are comfortable with Frax protocol risk.
Solana LST: mSOL (Marinade Finance)
- Model: Value-accruing — mSOL price rises against SOL as staking rewards accrue
- Yield: ~7-8% APY (Solana's native staking yield is higher than Ethereum's; ~6-8% base)
- Decentralization: Marinade delegates to 100+ validators using a scoring algorithm. Permissionless validators can apply
- DeFi: Deep integration across Solana DeFi — used as collateral on MarginFi, Kamino, and as LP on Orca/Raydium
- Instant unstake: Marinade has an immediate unstaking feature (small fee) via liquidity pools — you don't wait the 2-3 day epoch
Alternatives on Solana:
- jitoSOL (Jito) — captures MEV rewards on top of base staking; often ~8-9% APY; validators must run Jito MEV client
- bSOL (BlazeStake) — community-focused; delegates to many small validators; lower yield (~7%) but strong decentralization
- LST (Sanctum) — Sanctum's own LST; Sanctum also provides the protocol for many validator-specific LSTs
Comparison Table
| | stETH | cbETH | rETH | mSOL | jitoSOL | |--|--|--|--|--|--| | Chain | Ethereum | Ethereum | Ethereum | Solana | Solana | | Yield | ~3.3% | ~2.9% | ~3.4% | ~7.5% | ~8.5% | | Fee | 10% | 25% | 14% | 8% | ~5% | | Decentralization | Medium | Low | High | High | Medium | | DeFi liquidity | Deepest | Good | Good | Deep | Growing | | Smart contract risk | Low (audited, tested) | Low | Medium | Low | Low |
Key Risks for All LSTs
Smart contract risk: All LSTs introduce smart contract risk on top of native staking. A bug in Lido, Rocket Pool, or Marinade's contracts could affect all depositors.
Depeg risk: LSTs can trade below their underlying value during stress events. stETH depegged to ~0.94 ETH during the 3AC collapse in June 2022 before recovering.
Slashing: If node operators get slashed, LST holders absorb the loss proportionally (usually small; Lido has had minor slashing events without significant user impact).
Withdrawal queue: During high ETH withdrawal periods, instant redemptions through secondary markets may carry small discounts.