Lido is a liquid staking protocol for Ethereum that allows users to collectively fund new validators and receive rewards. Lido outsources the technical and operational complexity of operating an Ethereum validator to a permissioned group of validator operators.
When you deposit ETH or MATIC into Lido, you receive Lido’s liquid staking tokens, stETH or stMATIC, which represent your proportional claim to ETH or MATIC in Lido. As validators operating on Lido receive rewards, you are eligible to receive rewards proportional to your stake, which is typically expected to occur daily.
When you stake ETH with Lido, Lido sends you stETH on a 1:1 basis equivalent to the amount of ETH staked, so that if you were to stake 1 ETH you would be issued 1 stETH in return.
When you send MATIC to be staked in Lido, Lido converts your MATIC to stMATIC. The conversion rate is calculated according to your proportional claim to MATIC on the Lido protocol. For example, if Lido's conversion rate is “1 MATIC = 0.99 stMATIC” and you were to send 1 MATIC to Lido to stake, you would receive 0.99 stMATIC to represent your stake with Lido.