So, like, Ethereum's supply is going down, right? That means staking rewards should be coming just from fees. But... block fees are dropping, so shouldn’t rewards drop too? Yet Lido, eth.fi, and Rocket Pool all seem to have consistent rewards. How is that even possible?
Honestly, it's not really constant. APR is just sort of hovering in a range... they simplify it by giving us a flat number. Real yields fluctuate. It's never been stable, always changing and leaning lower.
But how do they even guarantee that constant APR? It's tied to network usage and the amount of staked ETH by the operator. And with ETH network fees crashing about 75% in the past year, how can this be sustainable?
Well, the APY isn’t just from the beacon chain. Most LRT ETH stuff like Lido and Rocket pulls from DeFi strategies too, so that’s why the numbers look steady. But yeah, APR can definitely swing depending on how well those strategies work. And about validators decreasing while staked ETH is rising, it takes time to get 32 ETH into the beacon chain.
Yep, I've noticed that too. If you check out the yield market, like Pendle.fi, the underlying APY varies daily. Constant APR claims are more of a marketing gimmick. Take Lido’s wstETH for example. The ‘real’ APY on that fluctuates around 2-3% daily, not that constant promise.
The APY is gradually decreasing, no doubt. But those rewards are compounding. If you've got a liquid staking token, its exchange rate is still climbing. So while it might seem stable now, the subtle decline isn’t obvious yet. Lido is pretty new; we need more time to see how things pan out.