How Does Stader Work?
Stader is a multi-chain liquid staking platform with $323M TVL, offering ETHx on Ethereum and LSTs on BNB Chain, Polygon, and Hedera. Its B grade reflects standard liquid staking patterns with no novel mechanisms, backed by multiple audits from Sigma Prime, Halborn, and PeckShield, though the permissioned operator set and multi-chain complexity add moderate risk.
TVL
$201M
Sector
Liquid Staking
Risk Grade
B
Value Grade
C-
Core Mechanisms
3.4.2
ETHx reward-bearing liquid staking token on Ethereum
Standard reward-bearing LST pattern similar to rETH and wstETH
3.3.2
Permissioned node operator set with curated validators
Similar to Lido curated operator model
2.2.4
Split fee model: 10% to operators, 5% to DAO, 5% to SD buyback
Standard split model
1.3.2
SD token buyback funded by 5% of staking fees
Standard buyback mechanism
5.1.1
SD token governance for protocol parameters
Standard token-weighted governance
How the Pieces Interact
ETHx used as collateral depends on accurate oracle pricing; stale feeds could trigger incorrect liquidations
Curating separate operator sets across multiple chains increases governance overhead
Buyback-funded SD accumulation could enable governance concentration
Mass unstaking could cause ETHx to trade at a discount to NAV
What Could Go Wrong
- ETHx exchange rate depends on oracle feeds for accurate pricing; a stale or manipulated oracle could cause incorrect liquidations when ETHx is used as collateral in external lending protocols.
- Multi-chain deployment across Ethereum, BNB Chain, Polygon, and Hedera increases attack surface, as each chain integration introduces bridge dependencies and chain-specific risks.
- Permissioned node operator set means Stader currently controls which validators run ETHx-backed nodes, creating centralization risk in validator selection.
ETHx Depeg During Mass Unstaking Event
TailTrigger: ETH price drops 30%+ in 24 hours while major lending protocols liquidate ETHx-collateralized positions, triggering redemption queue delays exceeding 7 days
- 1.Sharp ETH decline triggers liquidations of ETHx-collateralized positions — Large volumes of ETHx hit market as liquidators sell
- 2.DEX liquidity pools for ETHx/ETH become imbalanced — ETHx trades at 3-5% discount to underlying ETH value
- 3.Arbitrageurs attempt to redeem ETHx but face queue delays — Discount persists as redemption cannot keep pace
- 4.Further ETHx holders panic sell at discount — ETHx discount widens to 5-10%
- 5.Ethereum exit queue creates additional delays — Depeg persists until exit queue clears over days to weeks
Risk Profile at a Glance
Overall: B (27/100)
Lower score = safer