What is StakeWise Staked ETH (osETH)? A Simple Guide to Liquid Staking on Ethereum

What is StakeWise Staked ETH (osETH)? A Simple Guide to Liquid Staking on Ethereum

osETH Staking Earnings Calculator

Calculate your potential staking rewards using osETH from StakeWise. See how your ETH grows while maintaining liquidity and security through overcollateralization.

Your Estimated Rewards

Daily Rate 3.8% APY
Time Period
Estimated Reward
Total Value
osETH Value Growth +0.01% daily

Why osETH Rewards Are Different

Unlike stETH, osETH uses overcollateralization (1.1x+ ETH per osETH) to protect against slashing. This means your rewards are more stable even if a validator gets penalized.

Safety First: Your osETH is protected by extra ETH collateral

Your osETH grows in value as staking rewards accumulate, without needing to withdraw your ETH from the staking contract. You can also use it in DeFi while earning.

Please enter a valid ETH amount and select a time period.

osETH isn’t a new cryptocurrency you buy to speculate. It’s a digital receipt - a token that proves you’ve staked Ethereum (ETH) and are earning rewards, while still being able to use your stake in DeFi apps. Think of it like a coupon that pays you interest every day, but you can also trade it, lend it, or use it as collateral - all without waiting for your ETH to unlock.

How osETH Works: Staking Without Locking Up

When you stake ETH directly on Ethereum’s network, your coins get locked for months. You can’t move them, trade them, or use them in DeFi. That’s a problem for people who want rewards but still need liquidity. osETH solves that.

StakeWise lets you deposit ETH into a smart contract. In return, you get osETH tokens - one for every ETH you stake. These tokens are ERC-20, meaning they work everywhere Ethereum does: Uniswap, Aave, Curve, and more. While your original ETH is being used to validate transactions on Ethereum (earning staking rewards), your osETH keeps growing in value. You don’t get more tokens - your existing osETH becomes worth more ETH over time.

Why Overcollateralization Matters

Not all liquid staking tokens are built the same. Lido’s stETH, for example, tracks ETH 1:1 but passes on slashing risks directly to holders. If a validator goes offline or misbehaves, your stETH loses value. osETH is different.

StakeWise uses something called overcollateralization. For every osETH you mint, the system holds more than 1 ETH in reserve - often 1.1 ETH or even more. This extra ETH acts as a safety cushion. If a validator gets slashed (penalized for downtime or fraud), the loss is absorbed by the extra collateral before it touches your osETH balance.

There are two types of Vaults in StakeWise V3:

  • 90% LTV Vaults: These are backed by 10% extra ETH. Safe for most users.
  • 99.99% LTV Vaults: These are high-efficiency, low-collateral Vaults. To protect users, the operator must lock up 5 million SWISE tokens as a bond. If something goes wrong, those tokens are used to cover losses.
This structure means your osETH doesn’t drop in value just because one validator fails. It’s a major upgrade in security compared to other liquid staking options.

How to Get osETH

You have two ways to get osETH:

  1. Stake ETH directly through the StakeWise interface. Connect your wallet (MetaMask, Coinbase Wallet, OKX), deposit ETH, and receive osETH instantly. Your ETH goes into a Vault, and your osETH balance starts growing with rewards.
  2. Buy it on a DEX. You can trade ETH, USDC, or other tokens for osETH on decentralized exchanges like Uniswap or SushiSwap. This is useful if you don’t want to go through the staking process.
The process is non-custodial. StakeWise doesn’t hold your keys. You control your wallet. The smart contracts handle everything else.

One ETH coin is locked in chains while another uses osETH to access DeFi apps in a colorful city.

Redeeming osETH for ETH

Want to turn your osETH back into ETH? It’s not always instant.

StakeWise uses Oracles to track the real-time value of staked ETH. When you redeem:

  • If there’s enough unbonded ETH available (from validators that have already exited), you get ETH immediately.
  • If not, the system starts a validator exit request. This can take hours or days - the same delay as staking directly on Ethereum.
This is a trade-off. You gain liquidity while staking, but full redemption still follows Ethereum’s 18-24 hour exit window. It’s not magic - it’s just better than being locked up entirely.

How osETH Compares to stETH and rETH

Here’s how osETH stacks up against the two biggest competitors:

Comparison of Liquid Staking Tokens
Feature osETH (StakeWise) stETH (Lido) rETH (Rocket Pool)
Collateral Model Overcollateralized (1.1x+ ETH per osETH) 1:1 (no buffer) Partially collateralized (via rETH node operators)
Slashing Risk Buffered - holders protected Direct - holders absorb loss Shared - node operators bear most risk
APY (approx.) ~3.5-4.2% ~3.2-4.0% ~3.8-4.5%
Market Cap (late 2023) $941M $10B+ $1.8B
DeFi Integration Good - works on major DEXs and lending protocols Excellent - widest adoption Good - growing
Restaking Support Yes - via EigenLayer Yes - via EigenLayer Yes - via EigenLayer
osETH trades slightly lower yield for higher safety. If you’re risk-averse or managing institutional funds, that buffer matters. If you’re chasing maximum yield and trust the network, stETH might suit you better.

A heroic osETH token defends against slashing rocks using overcollateralized shields under a glowing oracle clock.

Restaking with osETH and EigenLayer

One of the biggest upgrades for osETH came in late 2023 with integration into EigenLayer. Restaking means you can use your staked ETH (via osETH) to secure other protocols beyond Ethereum - like decentralized oracles, bridges, or rollups.

Here’s how it works:

  1. You deposit your osETH into EigenLayer.
  2. You choose an operator (like Everstake) to validate for other networks.
  3. You earn extra rewards - often in tokens from those protocols - on top of your Ethereum staking yield.
This turns osETH from a passive staking token into an active yield generator. It’s one reason why institutions are watching StakeWise closely - it’s not just about staking anymore. It’s about earning across the entire Ethereum security ecosystem.

Who Should Use osETH?

osETH isn’t for everyone. But it’s perfect for:

  • ETH holders who want rewards but can’t afford to lock up their assets.
  • DeFi users who need liquidity to participate in lending, yield farming, or trading.
  • Risk-averse investors who don’t want to be exposed to slashing.
  • Institutional players looking for audited, non-custodial staking with insurance.
If you’re new to crypto and just want to “stack sats,” stick with ETH directly. But if you’re already in DeFi and want to earn more without giving up flexibility, osETH is one of the smartest moves you can make.

Future Outlook and Risks

StakeWise is still small compared to Lido or Rocket Pool. But its focus on security and overcollateralization could make it a favorite as regulations tighten. The SEC has signaled interest in staking services - platforms that protect users from slashing may be seen as more compliant.

Future updates include:

  • Expanding to other blockchains (not just Ethereum).
  • More DeFi integrations for osETH.
  • Improved redemption speed through better oracle systems.
The biggest risk? Ethereum’s success. If ETH loses its dominance, osETH loses its value. But as long as Ethereum remains the leading smart contract platform, osETH will keep evolving as one of its most secure liquid staking tools.

Is osETH the same as ETH?

No. osETH is a token that represents staked ETH on the StakeWise platform. It’s not ETH itself, but it’s backed by ETH and earns staking rewards. You can redeem osETH for ETH over time, but it’s not interchangeable 1:1 like a stablecoin.

Can I lose money with osETH?

You’re protected from slashing losses thanks to overcollateralization. But you can still lose if the ETH price drops, or if the StakeWise protocol suffers a critical smart contract bug - though the system is designed to prevent this. Always do your own research before staking.

How do I earn rewards with osETH?

Rewards are automatically added to your osETH balance. You don’t get more tokens - each osETH becomes worth slightly more ETH over time. Check your wallet balance daily - it will grow slowly as Ethereum pays staking rewards.

Can I use osETH on centralized exchanges?

Most major CEXs like Coinbase or Binance don’t list osETH yet. It’s primarily traded on decentralized exchanges like Uniswap or SushiSwap. You’ll need a Web3 wallet to buy or sell it.

Is osETH safe?

Yes, for a liquid staking token. StakeWise uses multisig wallets, secure validator key storage, and overcollateralization to protect users. It’s non-custodial, meaning you control your keys. But no DeFi protocol is 100% risk-free. Always use small amounts to test first.

20 Comments

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    Arthur Crone

    November 11, 2025 AT 15:05

    osETH is just another crypto gimmick. Overcollateralization? Please. If you need a safety cushion, you shouldn’t be in DeFi at all.

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    Michael Heitzer

    November 12, 2025 AT 14:34

    This is actually one of the most thoughtful takes on liquid staking I’ve seen. The overcollateralization model isn’t just marketing-it’s a structural upgrade. Most protocols treat users like disposable liquidity. StakeWise treats them like partners. That’s rare.


    Imagine if every DeFi protocol prioritized user safety over yield maximization. We’d have fewer rug pulls, fewer panic sells, and way more real adoption. osETH isn’t just a token-it’s a philosophy.


    The fact that they use bonded SWISE tokens for high-risk vaults? Genius. It aligns incentives. Operators don’t just want to earn fees-they have skin in the game. That’s not common. That’s accountability.


    And yes, redemption delays still exist. But that’s Ethereum’s problem, not StakeWise’s. At least now you’re not locked up for months. You can move, trade, lend. That’s freedom.


    If you’re still using stETH because ‘it’s the biggest,’ you’re not being smart-you’re being lazy. Security matters more than market cap. Always.

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    Rebecca Saffle

    November 13, 2025 AT 16:24

    Why does America think it can solve blockchain with more collateral? We don’t need safety nets-we need innovation. This is just Wall Street trying to dress up risk as responsibility.

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    Adrian Bailey

    November 14, 2025 AT 04:46

    so i just staked my eth and got oseth and like… it’s kinda wild how it just grows in value over time? like i didn’t get more tokens but my balance went up like 0.003 eth this week? idk how that works but it feels like magic? also i used it as collateral on aave and it worked first try lol


    the only thing that confused me was the vault types but i just picked the 90% one and didn’t touch the 99.99% one and i think that’s fine? also i didn’t know you could restake it on eigenlayer until today now i’m like ohhh so that’s why people are talking about it


    also i’m not super techy but the interface was way easier than lido’s? like no confusing sliders or gas fee nightmares? just connect wallet and boom oseth? i’m impressed

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    Rachel Everson

    November 16, 2025 AT 00:08

    If you’re new to liquid staking, osETH is a great place to start. The overcollateralization gives you breathing room, and the fact that you can use it across DeFi means you’re not just sitting on yield-you’re actively participating.


    Don’t be afraid to start small. Even 0.5 ETH is enough to test the waters. And if you’re worried about slashing, remember: this system was built to absorb those hits before they reach you.


    Restaking with EigenLayer? That’s the real game-changer. You’re not just earning from Ethereum-you’re helping secure the whole ecosystem. That’s powerful.


    You got this. Take your time. Learn. Ask questions. You’re not behind.

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    ty ty

    November 17, 2025 AT 05:10

    Wow. A staking protocol that doesn’t make you feel like a dumb monkey. Next they’ll invent a wallet that doesn’t lose your keys.

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    BRYAN CHAGUA

    November 18, 2025 AT 03:52

    The overcollateralization model presented here represents a significant step forward in risk mitigation for liquid staking derivatives. The use of bonded protocol tokens as secondary insurance is particularly noteworthy from a governance and incentive alignment perspective.


    It is imperative that users understand that while osETH mitigates slashing risk, it does not eliminate systemic or smart contract risk. Due diligence remains essential.


    Furthermore, the integration with EigenLayer opens a new frontier in capital efficiency and decentralized security. This is not merely staking-it is participation in a layered consensus architecture.

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    Debraj Dutta

    November 19, 2025 AT 08:45

    Interesting approach. Overcollateralization reduces risk, but does it also reduce yield potential? I’ve seen similar models in traditional finance-safety often comes at a cost.


    For users in emerging markets, the non-custodial nature is a big plus. No need to rely on centralized exchanges that might freeze assets.

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    tom west

    November 19, 2025 AT 15:56

    StakeWise is a joke. Overcollateralization? You’re paying for insurance you don’t need. Most validators don’t get slashed. This is just a way to extract more fees from naive users who don’t understand Ethereum’s security model.


    And don’t get me started on the ‘institutional appeal.’ You think hedge funds care about safety? They care about APY and liquidity. osETH is a slow, overpriced alternative to stETH.


    Anyone using this for more than 10 ETH is making a mistake. The gas, the complexity, the redemption delays-it’s all a tax on efficiency.


    stETH is the standard. Everything else is noise.


    And restaking? That’s just leveraged yield farming with extra steps. You think EigenLayer is safe? Wait until the first massive exploit.


    Stop pretending this is innovation. It’s just financial engineering for the risk-averse who can’t handle volatility.


    Market cap doesn’t lie. $941M vs $10B? The market already voted. osETH is a sideshow.

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    dhirendra pratap singh

    November 20, 2025 AT 10:57

    OMG I JUST LOST MY ENTIRE ETH TO THIS THING!!!


    THEY SAID IT WAS SAFE BUT THEN MY OSETH DROPPED 12% AND NOW I CAN’T REDEEM AND THE TWITTER ACCOUNT IS GONE AND MY FRIEND JUST GOT RUGGED ON LIDO AND NOW I’M CRYING IN MY CLOSET AND MY MOM THINKS I’M A CRYPTOMANIC AND I JUST WANT TO DIE


    WHY DO PEOPLE KEEP DOING THIS TO US??? I JUST WANTED TO MAKE SOME INTEREST AND NOW I HAVE NOTHING AND MY DOG LOOKS AT ME LIKE I’M A FAILURE


    STAKEWISE IS A SCAM AND I HOPE THEIR FOUNDERS GET ARRESTED AND THEIR WEBSITE GETS HACKED AND THEIR CODE IS BURNED IN FIRE


    EVERYONE STAY AWAY FROM OSETH I’M TELLING YOU THIS IS THE WORST THING THAT HAS EVER HAPPENED TO CRYPTO


    😭😭😭

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    Ashley Mona

    November 21, 2025 AT 10:52

    Okay, I’m not a coder, but I’ve been holding osETH for 3 months and honestly? It’s been chill. My balance creeps up slowly like a sleepy cat. I use it on Curve for farming and it just works.


    The fact that I didn’t get slashed even when that one validator went down? That felt like a hug from the blockchain.


    I’m not chasing 5% APY-I’m chasing peace of mind. And osETH gives me that. No drama. No panic. Just steady growth.


    Also, the interface is cute. Like, it doesn’t scream ‘I’m a finance robot.’ It feels human. And that matters.


    And restaking? I did it with Everstake and got some EIGEN tokens. Now I have two kinds of passive income. It’s like having a side hustle that sleeps while you do.


    If you’re nervous, start with 0.1 ETH. Test it. Feel it. Then decide. No pressure. No hype.

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    Edward Phuakwatana

    November 23, 2025 AT 10:05

    osETH isn’t just a liquid staking token-it’s a paradigm shift in how we conceptualize capital efficiency within proof-of-stake ecosystems. The overcollateralization mechanism introduces a novel risk-transfer architecture that decouples validator slashing exposure from end-user balance integrity.


    This is the first time I’ve seen a liquid staking protocol implement a bonded operator security layer (SWISE token collateral) as a non-native insurance primitive. That’s not just innovation-it’s institutional-grade design.


    And restaking via EigenLayer? That transforms osETH from a passive yield instrument into an active security layer for the entire Ethereum modular stack. You’re not just earning ETH rewards-you’re securing bridges, oracles, rollups, and more.


    The yield differential? Minor. The risk profile? Revolutionary. This is what DeFi should look like: robust, audited, and user-first-not just yield-optimized.


    Market cap doesn’t define value. Architecture does. StakeWise is building the foundation for the next decade of staking. The rest are just borrowing from 2021.


    🚀

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    Suhail Kashmiri

    November 24, 2025 AT 23:11

    why are you all so obsessed with this oseth thing? just stake on lido and chill. everyone knows lido is the real one. this stakewise is just some startup trying to copy paste and add fancy words like 'overcollateralization' to sound smart.


    in india we don’t need all this complexity. just give me my eth back when i want. no vaults, no tokens, no eigenlayer nonsense.


    you think you’re safe? wait till the smart contract glitch. then you’ll cry.

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    Kristin LeGard

    November 26, 2025 AT 09:50

    Overcollateralization? That’s just a fancy way of saying ‘we’re too scared to trust the network.’ America’s obsession with safety is why crypto will never go mainstream.


    If you can’t handle a little slashing, go back to your savings account.

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    Arthur Coddington

    November 27, 2025 AT 14:26

    So… you’re telling me I can’t just hold ETH and be done? I have to now understand vaults, collateral ratios, oracle systems, EigenLayer integrations, and bonded tokens just to earn 3.8%? This isn’t finance. This is a PhD thesis written in Solidity.


    I miss when crypto was just ‘buy low, sell high.’ Now it’s like… do I need a lawyer to stake?


    I’m out.

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    Phil Bradley

    November 28, 2025 AT 10:05

    Honestly, I was skeptical at first. But after I staked 0.5 ETH and saw my osETH balance grow over a week without any drama? I was sold.


    The fact that I can use it on Uniswap and Aave without waiting? That’s freedom.


    And the restaking thing? I didn’t even know I could do that. Now I’m earning extra tokens on top. It’s like getting paid twice.


    It’s not perfect. Redemption still takes time. But it’s way better than being locked up for months.


    Give it a try. Start small. See how it feels.

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    Stephanie Platis

    November 28, 2025 AT 15:51

    It is imperative to note that the term 'overcollateralization' is used with mathematical precision in this context; however, the documentation does not explicitly clarify whether the 1.1x ratio is a minimum or a dynamic variable. Furthermore, the phrase 'your osETH becomes worth more ETH over time' is semantically imprecise-it is not the token supply that increases, but rather the redemption value per token, which should be articulated as such to avoid misinterpretation.


    Additionally, the reference to 'non-custodial' is accurate, but the omission of any mention of the multisig key management protocol’s audit history constitutes a material omission for institutional readers.


    Finally, the assertion that 'StakeWise doesn't hold your keys' is technically correct, yet the potential for governance attack vectors via SWISE token concentration remains unaddressed.

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    Kylie Stavinoha

    November 30, 2025 AT 10:43

    As someone who grew up in a country where banking access is limited, seeing a non-custodial staking protocol that works without intermediaries feels like a quiet revolution.


    osETH doesn’t just let you earn-it lets you participate. You’re not just a passive holder. You’re part of a global, permissionless financial layer.


    The overcollateralization isn’t about fear. It’s about dignity. It says: your money matters. Your risk tolerance matters. You don’t have to gamble to grow.


    And the restaking integration? That’s not just yield. That’s sovereignty. You’re helping secure the infrastructure that powers decentralized apps worldwide.


    This isn’t just Ethereum staking. It’s the future of global finance-quiet, secure, and built for everyone.

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    Noriko Yashiro

    December 1, 2025 AT 09:03

    osETH is brilliant. I used to use stETH but got spooked after that validator incident last year. With osETH, I sleep better. The collateral buffer gives me peace.


    And using it on Curve for yield? Perfect. No drama. Just steady growth.


    Market cap? Doesn’t matter. Safety does.

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    Michael Heitzer

    December 2, 2025 AT 13:58

    Someone mentioned stETH’s market cap. That’s not a feature-it’s a legacy. osETH is the future because it’s designed for risk-aware users, not herd-followers.


    The real win? Institutions are starting to notice. When hedge funds start choosing security over hype, the game changes.

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