Bancor is a trading platform that allows LPs to stake their assets as liquidity in order to earn trading fees. This allows wstETH (wrapped stETH) to be staked single-sided to earn trading fees with the added benefit of impermanent loss protection.
Adding wstETH liquidity to Bancor
1. Visit Bancor and navigate to the wstETH/BNT pool.
2. Under ‘Actions’, click the ‘+’ symbol to add liquidity.
3. Choose the token you want to stake. You can choose between wstETH and BNT.
4. Choose the amount you want to stake. As Bancor lets you add single-sided liquidity - allowing you to choose which specific token you want to add - the space available may be limited as your deposit must be matched on the other side. If there is insufficient space in a pool, you have three options:
Provide BNT to open up space.
Wait until another user provides BNT to open space.
Work with Bancor governance to increase the pool's BNT co-investment limit.
5. Input the amount to stake and press ‘Stake and Protect’.
6. If this is your first time using Bancor, you will need to approve token spending. A pop up will appear - press ‘Unlimited Approval’ and confirm using your wallet of choice.
7. Once confirmed, you will be providing wstETH liquidity to Bancor and you will start to earn trading fees.
Unstaking your wstETH liquidity on Bancor
To unstake, click the arrow on the far right of the ‘My Protected Positions’ overview.
Choose the percentage of your staked amount which you would like to withdraw.
Press ‘continue’ and confirm the transaction using your Ethereum wallet.
Your previously staked funds will now appear in your Ethereum wallet.
Converting your stETH to wstETH
You can wrap/unwrap your stETH tokens using stake.lido.fi/wrap. Simply connect your wallet, unlock your stETH tokens and press Wrap.
You can also choose to convert your ETH to wstETH directly. To do this, select ETH on the token drop down. This allows you to save on gas compared to swapping from ETH to stETH to wstETH.
For more information on wrapped stETH (wstETH), visit help.lido.fi/en/collections/2947347-wrapped-steth-wsteth.