stETH is a token that represents staked ether in Lido, combining the value of initial deposit + staking rewards. stETH tokens are minted upon deposit and burned when redeemed. stETH token balances are issued 1:1 to the ethers that are staked by Lido. stETH token’s balances are updated when the oracle reports change in total stake every day.
The mechanism which updates the stETH balances every day is called a “rebase”. Every day at 12PM UTC the amount of stETH in your address will increase with the current APR. You can learn more here: https://blog.lido.fi/steth-the-mechanics-of-steth/
stETH tokens can be used as one would use ether, allowing you to get Ethereum staking rewards whilst benefiting from e.g. yields across decentralised finance products.
Lido's stETH token lets you get staking rewards for every day of holding these tokens in your wallet. They are fully liquid, so you can use them for your needs at any time — trade, sell, exchange, invest in DeFi projects, etc.