Back in October, we first introduced aETH — a synthetic derivative asset that acts as a bridge between currently illiquid Ethereum 2.0 and the regular Ethereum network. This article will explore aETH’s role in more detail, showing how useful it can be for staking on the Stkr platform.
Solving liquidity challenges
While the Ethereum 2.0 launch presents major opportunities to early adopters, the staked assets get locked in the network until at least phase 1.5 is released (which can take up to several years!), stripping investors from any rewards for that period of time.
Luckily, you don’t have to wait that long for your rewards with Stkr: our newly introduced aETH bond-like token allows users to stake Eth2 and redeem rewards without having to wait until the end of the lockup period.
aETH: how does it work?
It’s quite straightforward: first, you deposit ETH on stkr.io (you can deposit any amount starting from 0.5 ETH).
Your ETH then gets staked in an Eth2 node via a Stkr Micropool, automatically getting locked up for an uncertain period of time (until phase 1.5 goes live), and you will automatically receive aETH on the Stkr platform.
Before the start of staking rewards, aETH is issued at a ratio of 1:1 to the amount of ETH you staked. So, for instance, if you have 10 ETH staked, you will get 10 aETH.
As aETH is a bond-like asset, representing your staked ETH plus any future staking rewards, the issuance ratio of aETH:ETH will decrease over time. 1 aETH will gradually be worth more than 1 ETH, so the exchange rate of ETH to aETH continually increases and you receive a value-equivalent amount pegged to the time at which you deposit your ETH
Have your cake and ETH it too
Owning aETH gives you several options. You can hold it and accumulate rewards, or you can redeem your aETH for real ETH at any time. In other words, you can have your cake and eat it too.
As we will provide initial liquidity for aETH on Uniswap, aETH holders also have the option to provide liquidity to the aETH/ETH pair and earn from transaction fees.
Finally, you can use aETH with DeFi products for staking and yield earning activities (we are currently working on listing aETH on some leading DeFi protocols, so expect more announcements to come in).
Please note that if you are trading aETH, you are effectively trading your entire investment (both the invested amount and the expected reward).
We are determined to incentivize aETH liquidity to make it easily tradable and accessible for everyone, so make sure to give it a go by depositing ETH on Stkr and stay tuned for further updates!