Stader Labs Review 2024

Stader Labs Overview

What Is Stader Labs?

Stader is a crypto staking platform founded in 2021 that supports liquid staking and integrates with several popular DeFi protocols, such as Aave and Pendle. The protocol supports top staking assets like ETH, MATIC, and BNB, providing a liquid staking token that can be exchanged on the platform for the base asset when you’re done staking.

Stader brings liquid staking to popular assets like MATIC and even supports liquid staking on the Polygon network, a powerful way to save on fees while giving you the ability to earn additional yields through DeFi integrations.

Key Features

• Easy staking: Just connect a wallet and choose the amount you want to stake. Stader’s app exchanges your base token for a staked equivalent token. Gas fees apply.
• Integrated DeFi: Stader pairs well with DeFi applications like Aave, Curve, Balancer, and Pendle. You’ll find handy links to get you started double-dipping on yields.
• No-fuss unstaking: Stader’s newbie-friendly interface lets you unstake in just a few clicks. Blockchains may enforce a waiting period to unstake.
• Liquidity pools: If you need to make a portfolio change in a hurry, you can swap your liquid staking tokens through decentralized exchange liquidity pools linked directly from the app.

Our Expert Review Of Stader Labs

I’m a sucker for a clean UI, so Stader was love at first sight. The intuitive design makes the protocol a great fit for people new to staking, but who know some of the basics (like how to fund a crypto wallet).

Let’s face it. Staking can get complicated on some platforms. Stader makes it much easier to get started and provides liquid staking tokens for top cryptos like ETH and MATIC. In short, you’re not locked into a long commitment but you can still earn a healthy yield. And it’s easy.

Is Stader perfect? No. Fees come to mind, but Stader’s protocol fees are competitive with the rest of the sector at this time.

In this Stader Labs review, I’ll walk you through the basics, discuss protocol security, and share my overall experience with the platform.

Stader Supported Assets

Stader supports liquid staking for seven types of crypto, with the most recent addition being ETH. When staking through Stader, you’ll get a new token that represents your staked token. You can then use these liquid tokens in other DeFi protocols (more on this later), or swap them for other tokens if you need to make a quick exit.

There’s also a governance token for the Stader protocol (SD). Don’t worry, you won’t need the Stader token to transact on the platform. The SD token can be used for voting on governance and in DeFi liquidity pools.

The SD token is also used by Stader as an incentive token when staking certain assets. For example, staked ETH currently earns about 2% in boosted SD rewards. This won’t last forever.

Connecting To Stader

You’ll find support for top wallets like MetaMask and Coinbase Wallet (and several others), if you need to stake ETH, MATIC, BNB, or FTM. Assets like LUNA, NEAR, and HBAR that aren’t EVM-compatible can use wallets for those blockchains, i.e. Blade or Hashpack for HBAR.

If you’re staking ETH, as an example, it’s likely you’re already using one of the supported wallets.

I was able to connect MetaMask, which was unsurprising, but also with Frame Wallet, which isn’t explicitly supported.

Staking (And Unstaking) With Stader

Staking is just as easy as getting connected. And there’s no minimum staking amount — as a technical matter. But transaction costs play a role. Staking smaller amounts probably won’t be viable on pricier blockchains like Ethereum. It may cost more than you’ll earn.

Stader’s UI clearly displays the cost of the transaction as well as the exchange rate for the crypto you’re staking. 

The transaction cost is the blockchain fee for using the smart contract. Stader doesn’t mark this up; it’s market-driven and based on the complexity of the contract as well as network demand. 

It’s also not driven by how much you stake. You’ll pay the same amount if you stake 0.001 ETH or 100 ETH: $7.21 in the example below. 

It’s worth noting that this transaction cost is currently lower than both Lido and RocketPool, two other popular liquid staking protocols. I checked at different times of day with the same result: Stader had lower gas fees.

The savings suggest more efficient smart contracts are at work with Stader.

Lido’s transaction cost, seen below, is higher. However, Lido gives you the option to use lower-cost Layer 2 networks like Arbitrum, Polygon, or Optimism if you hold ETH on those blockchains.

Lido also displays the reward fee, which is 10% on both Lido and Stader. In the interest of transparency, Stader should add that to the UI. 

The reward fee isn’t a secret, but it’s also not as obvious as it could be on Stader.

The math is simple: If you earn $50 in staking rewards, Stader keeps $5, some of which they use to improve the protocol (per their documentation). You get the remaining $45, reflected in the annual staking rewards earnings.

Unstaking is easy too, but pay attention to the transaction costs and wait times. The waiting period is determined by each blockchain. The transaction cost is just the fee for using the network to run the smart contract. But it can add considerable cost to the round-trip staking adventure. 

You’ll pay coming and going. And much like trying to leave NJ, where I live, the tolls are higher on the way out.

An Example

If you were to stake $1,000 worth of ETH, your annual yield would be about $57 dollars. If, after a year, you decide to unstake, the total transaction cost, including both staking and unstaking, would be about $40. This makes your effective yield about $17, or 1.7%. 

Worth it? Maybe. It depends on the amount you stake (and for how long).

If you’re staking larger amounts, the transaction cost becomes a smaller factor relative to the yield, but it’s something to consider when staking on Stader or other platforms.

Also, consider making your moves when network traffic is lower, which can help reduce gas fees.

You also have the option of swapping other assets for the staked tokens on a decentralized exchange, which may be a cheaper way to go. The liquidity pool isn’t live yet, but soon you’ll be able to swap ETH for ETHx on Uniswap.

And here’s the good news: If you’re looking for a place to stake MATIC, Stader offers a superior solution. More on that in a bit.

DeFi Integrations

One of the big advantages of liquid staking is that you can exit your position quickly through swaps on a decentralized exchange (DEX) like Uniswap. 

The other theoretical advantage is that you can use your liquid tokens on other protocols. Stader makes this more than just theory, providing links to other protocols and pools where you can put your liquid tokens to work immediately.

For example, here’s what’s available now for Polygon MATIC (MATICx) staking. 

• Leveraged Staking: CIAN integration brings leverage to MATIC staking, resulting in a yield of 7% to 10%.
• Liquidity Pools: Earn up to 18.26% through six active liquidity pools by providing tokens to the pool. Protocols include Balancer, Quickswap, and Meshswap.
• SD Pools: Yields go straight to the moon if you provide liquidity for SD/MATIC pairs. One pool on Quickswap shows a 57% APR. The risk for this reward: SD tokens are new, so the future price is speculative.
• Lending and Borrowing: Aave, Meshswap, and Midas all offer crypto lending and borrowing for MATICx.
• Yield Optimizers: Beefy Finance offers a pool to auto-compound your staking rewards. The result: currently over 7% APY.
• Vaults: Olive provides a DeFi vault (basically a time-locked contract) that currently lets you earn almost 33% APY on your MATICx with automated options trades.

For ETHx, users can deposit into a vault with Sommerlier Finance (currently offering over 50% APY!), or a yield optimizer such as Pendle. Just to name a couple of examples. Stader Labs offers a selection of defi connections for all of their supported tokens, with a number of options for users to choose from.

Stader ETH Node Operators

For people who hold larger amounts of ETH (4 ETH minimum), Stader lets you get started as a node operator with a much lower commitment compared to solo staking. 

Typically, you need 32 ETH to go it alone, and current yields for solo staking are about 5%. With Stader, you can outperform solo yields with a low 4 ETH bond commitment. Stader node operators earn nearly 15% per year based on current incentives. A little over half of the yield is paid in SD, the Stader protocol token, which we’ll discuss in a bit.

As the commitments get bigger, it’s even more important to do your own research. Stader’s ETH docs are a good starting point.

Stader’s Hidden Gem (MATICx)

If you’re a Polygon fan, you probably have a stack or two of MATIC you’d like to put to work. 

The problem: MATIC staking must be done on the Ethereum blockchain, which makes staking cost-prohibitive unless those stacks are pretty tall.

Stader fixes this. Now, you can stake MATIC on the Polygon network, dropping the transaction cost to nearly zero. Stader still takes a 10% cut of your staking rewards, but for many MATIC holders, this is a small price to pay. Currently, the yield is 5.1%.

MATICx token

And, as detailed in the section above, there are plenty of ways to boost your yields by deploying your MATICx in leveraged staking protocols, liquidity pools, or yield optimizers.

Some of us are aspiring crypto whales, but we’re not there just yet. Stader’s MATIC liquid staking makes room for investors with small-but-growing stacks to earn a yield too.

How Stader’s Liquid Tokens Work

When you stake on Stader, you get “x” tokens in exchange for the tokens you stake. 

What you’ll notice immediately is that this is not a 1-for-1 exchange.

That’s because Stader’s liquid staking tokens represent the yield on the tokens in addition to the value of the underlying token, like MATIC or ETH. 

Over time, the exchange rate changes as the tokens accumulate more earnings from yields. When it comes time to unstake, you’ll get a larger amount of the base token than when you started.

By comparison to MATIC/MATICx, the exchange rate for the newly launched ETH token is much closer to 1:1. One ETH = 0.999 ETHx. 

The number of liquid tokens you have won’t change. Just the exchange rate changes. In effect, the yield is paid in price appreciation — a better exchange rate — for the liquid token.

With traditional staking, you’ll typically earn more of the same token. So, if you staked $1,000 of ETH with a 5% yield, at the end of the year, you’d have $1,050 worth of ETH. The dollar value assumes the price of ETH stays the same. (It won’t.)

The benefit of liquid staking is that you can use the liquid tokens to earn additional yields in DeFi, sell them, use them as collateral, or just HODL. With traditional staking — which locks your tokens, the last option is really all you have: HODL.

Stader Token (SD)

As a decentralized protocol, Stader is run by the community. Holding SD tokens gives you the ability to vote on governance proposals for the project. 

The tokens don’t currently offer a yield unless you supply liquidity in a pool, but if you bought at the end of 2022, you’ve already made a mint. SD traded at under $0.27 on December 31, 2022. By April 2023, SD reached $1.77. At press time, the SD token trades at over $0.82.

The total supply of the Stader token is fixed at 150 million. This gives a bit more weight to the token when used as an incentive, as seen in ETH staking. At least we know there won’t be an endless river of SD tokens overflowing demand.

Stader Support

Stader is a decentralized protocol, so there’s no toll-free number to call. If you have questions, the docs are usually the best place to start. If you’ve read the docs and you’re still stuck, there are several ways to reach out to the community and the team.

• Community Forum
• Stader Labs Twitter
• Stader Community Discord
• Stader Labs Official Community Telegram

Who’s Stader For?

• Institutions that hold crypto: Businesses and institutions that have a crypto investment can earn a yield without needing to trust a custodian. Stader’s audits, on-chain monitoring, and bug bounty program all help ensure safer self-custody staking.
• People who are new to crypto DeFi: Stader’s newbie-friendly UI makes it a breeze to get started. Just know the basics of managing a wallet before jumping in. Also, do a bit of research before using your liquid tokens on other protocols.
• People who want to boost yields through DeFi apps: With 40+ DeFi integrations, there are plenty of ways to put your liquid staking tokens to work.
• People who want hands-off staking yields: You don’t have to use your tokens in DeFi. Stader offers a viable set-it-and-forget-it strategy for staking without sacrificing self-custody.

Who’s It Not For?

• People who aren’t comfortable using crypto wallets: Stader and similar protocols require a base level of knowledge regarding crypto wallets like MetaMask. 
• People who want to stake small amounts of ETH: The transaction cost to stake ETH through smart contracts like Stader, Lido, and others makes it cost-prohibitive to stake small amounts. As alternatives, you can consider staking MATIC on Stader or swap ETH for a liquid staking token.

Stader Alternatives

Stader Vs. Lido

Lido is still the leader in liquid staking, boasting about 75% market share. This dominance also leads to more DeFi opportunities, with Lido’s stETH token in particular. However, Stader offers staking for more tokens, and the DeFi ecosystem for Stader’s liquid staking tokens is growing.

Stader Vs. Coinbase

Staking is big business for centralized exchanges like Coinbase. And it’s easy. But it comes with some caveats, including higher staking fees (estimated at 20% on Coinbase) and the need to use Coinbase for custody rather than your own crypto wallet.

Stader Vs. RocketPool

Unlike Stader, which offers a variety of staking options, RocketPool is laser-focused on ETH staking. RocketPool came to popularity with its ability to run a node using only 8 ETH. Stader optimizes this further with a low 4 ETH bind requirement. Both offer liquid staking for ETH as well.

Is StaderLabs Safe To Use?

Stader’s protocol centers on smart contracts, so that’s probably the area that deserves the most consideration. Here’s some background on the founders, audits, bounties, and the protocol’s history.

• Founders: Amitej Gajjala, Sidhartha D, and Dheeraj Borra
• Investors: True Ventures, Coinbase Ventures, Pantera Capital, and others
• Audits: Halborn, PeckShield, BlockSec, ImmuneBytes, OSEC + More
• On-Chain Monitoring: Provided by Forta
• Bug Bounties: $1 million bug bounty on each blockchain (Immunefi)

Engaging with any protocol, you take on smart contract risk. This is a risk for every protocol, not just Stader. And while they have a long list of audits and bug bounties live, there is still a small risk of their protocol being hacked. However, they have done a good job overall of covering their bases.

Final Thoughts On Stader

Stader’s liquid staking has all the hallmarks of a future powerhouse in the space. Newer staking options, like ETH, currently offer fewer DeFi opportunities. But if you look at what Stader has done with MATIC, the future for ETH staking and whatever comes next (SOL?) could be bright with Stader.

Frequently Asked Questions

Eric Huffman

Staff Writer

Eric Huffman is a staff writer for MilkRoad.com. In addition to crypto and blockchain topics, Eric also writes extensively on insurance and personal finance matters that affect everyday households.

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Shannon Ullman

Managing Editor

Managing editor working to make crypto easier to understand. Pairing editorial integrity with crypto curiosity for content that makes readers feel like they finally “get it.”

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