The Controversy Surrounding the Staked Ethereum stETH

Even though it hasn't occurred yet and its timing isn't determined, almost $35 billion has already been gambled on the success of a major forthcoming modification to Ethereum.

The "merge" is causing all of this, and it's intended to make Ethereum more secure and decentralized.

After the Lido Finance "staking" pool platform merges with the Ethereum network, critics are concerned that it will monopolize key aspects of the Ethereum network, including future network upgrades. 

Ethereum transactions will be processed after the Lido Finance "staking" pool platform merges with the Ethereum network.

"Pegs" are a hot-button topic in the crypto community right now. 

Since TerraUSD (UST) began losing its peg to the U.S. dollar last week, most cryptocurrencies have taken a tumble. 

And UST isn't the only one to have this problem. Another algorithmic stablecoin, DEI (DEI), has also fallen below $1.00.

ETH-USD holders of the Lido Staked ETH (LDO) have received a warning from the DeFi Lido (LDO), which allows you to stake your Ether (ETH-USD) ahead of Ethereum's move to proof-of-stake (stETH).

 Decrypt reports of this latest impact from Terra's (LUNA-USD) demise:

"People who had [stETH] in the Anchor lending protocol, which runs on the all-but-defunct Terra blockchain, rushed to retrieve it on Friday."
"As long as stETH is trading at a discount…there won't be enough ETH in the pool to back everyone's stETH,"

That's a problem for individuals who have borrowed money or otherwise monetized their stETH.

As Lido co-founder Jordan Fish pointed out on his widely followed "Cobie" Twitter handle, though, Positions waiting for the "Merge" to proof-of-stake don't need to worry about it too much. 

It was stated in the twitter thread that, when redemptions are allowed, 1 stETH may be exchanged for 1 ETH. 

There will never be a way to exchange UST for U.S. dollars. As a result, they have nothing in common.


He noted in the tweet thread:

 "UST cannot be redeemed for USD ever. So they're not really similar at all."

According to Ethereum developers, the Merge is progressing via several "testnets," and we should be able to put this all behind us once the Merge is complete. 

Cryptocurrency is expected to undergo a huge shift, so keep an eye out.