stETH, wstETH, and wbETH are Ethereum staking tokens that followed ETH's decline on December 24, with a drop of 1.8-2%. These tokens represent ETH staked on the Beacon Chain and should theoretically maintain a 1:1 value with ETH.

stETH is a liquid staking token issued by the Lido protocol, allowing users to stake ETH and receive stETH while retaining liquidity. wstETH is a wrapped version of stETH, whose value will grow over time due to staking rewards. wbETH, on the other hand, is a similar product issued by Binance.

The price fluctuations of these staking tokens reflect several pieces of information: first, the demand for ETH staking remains strong; second, liquid staking has become a mainstream choice; and third, users are willing to pay a certain cost for liquidity.

From the protocol data, Lido's TVL exceeds $30 billion, making it the largest protocol in the DeFi space. This indicates that liquid staking has become the standard operation for ETH holders. Compared to traditional staking, liquid staking allows users to earn staking rewards while participating in DeFi activities.

It is important to note that while these staking tokens are theoretically equivalent to ETH, they may become unpegged in extreme market conditions, such as when a large number of redemptions lead to insufficient liquidity or if there are issues with the smart contracts. Therefore, holding staking tokens requires an understanding of the associated risks.

For long-term investors optimistic about ETH, staking tokens are a good choice, offering around 4% annualized returns without sacrificing liquidity. However, it is essential to choose top protocols like Lido to avoid the smart contract risks associated with smaller protocols.