Introduction

From May 7th, stETH started to depeg from ETH. As can be seen in the graph below, 1 stETH is currently worth 0.94 ETH. In this dashboard, we'll look at data for possible reasons for the depegging. We'll look at possible correlations with the price of ETH, gas prices of ETH, and the stETH/ETH pool on Curve.

Methodology

• stETH/ETH peg: Calculated using the ethereum.core.fact_hourly_token_prices table. The price of stETH was found by filtering for token_address = lower('0xae7ab96520de3a18e5e111b5eaab095312d7fe84') and the price of ETH was found using token_address is null. We then devide the daily average price of stETH by the daily average price of ETH.
• ETH gas prices: Calculated using the ethereum.core.fact_transactions table. This table contains the gas prices for every transaction. The average daily gas price was calculated using avg(price) and grouping by date.
• stETH/ETH Curve pool volume: Calculated using the ethereum.core.fact_event_logs table in combination with the contract address of the stETH/ETH pool: 0xdc24316b9ae028f1497c275eb9192a3ea0f67022. We then filter for swaps in the pool using event_name = 'TokenExchange' and exact the amount of ETH swapped using by taking the average of the amount that was bought and sold in the swap. We then sum this over the entire day to get the total volume in ETH per day. Finally, we multiply this by the price of ETH of that day to get the daily volume in USD.
• stETH/ETH Curve pool composition: The flipside_prod_db.ethereum.erc20_balances table was used to determine the balance of the Curve pool. Using user_address = '0xdc24316b9ae028f1497c275eb9192a3ea0f67022', we were able to extract how much stETH and ETH the contract held for each day. We then calculate the balance of the pool by calculating what percentage stETH and ETH represent in the pool.

Results

For all graphs, we'll look at the past 90 days.

First, we'll look at the price of ETH as a possible reason stETH depegged. When there is large volatility in the price of ETH, it is of course harder to keep the price exactly 1:1. We set May 7th as the starting date of the depegging. We can see that ETH has been in a downtrend prior to that. We do see a sharper downturn starting May 5th, two days prior to the depegging. This is likely one of the reasons stETH is seeing volatility.

When looking at gas prices, we can see there was a major spike in gas price on May 1st. High gas usually comes when there is high volatility on the Ethereum network. However, as can be seen on the next graph, there was no spike in volume in the stETH/ETH pool on Curve. Therefore, this spike in gas probably has no correlation with the stETH/ETH depeg.

stETH/ETH Curve Pool

Next, we'll look at the stETH/ETH pool on Curve. This pool has the highest liquidity among all stETH/ETH pools in crypto, so this pool is very important for the peg of stETH. First, we'll look at the daily total volume in the pool compared to the peg. We can see that there is a clear correlation between the peg and volume. Especially on the days between May 7th and May 13th, we can see that there was high volume as stETH started to diminish in value compared to ETH.

Finally, we'll look at the balance of stETH and ETH in the pool. In normal circumstances, this balance should be 50:50, 50% of the value of the pool in ETH and 50% of the value in stETH. We can see that on May 7th the pool started to become unbalanced: 52% of the value of the pool was in stETH while 48% of the value of the pool was in ETH. As the stETH started to depeg further, we can see the stETH percentage increase to over 80% currently. This is because users want to sell their stETH for ETH. Because nobody wants to buy the stETH in the pool, there is now a surplus of stETH in the pool.

Conclusion

• There seems to be a strong correlation between the peg of stETH/ETH and the price of ETH, the volume of the Curve stETH/ETH pool and the balance of the stETH/ETH pool.
• There does not seem to be a strong correlation between the peg of stETH/ETH and the gas prices of the Ethereum network.