Lido Finance is a market leader in the space of ethereum staking. Staking through Lido has several benefits. Some of them include

1. Can stake less than 32 ETH ( the minimum for direct staking)
2. ETH becomes illiquid when staked. To use it for transactions again you would need to remove it from the stake and wait for a few days.

Lido aims to solve both of these issues through its decentralized staking platform that allows users to stake their coins with no minimum investment required.

stETH working

stETH and ETH are tied together. For every ether deposited, 1 stETH is minted and for every stETH withdrawn 1 stETH is burned. Using this process, lido algorithmically ensures that the the prices of 1 ETH = 1 stETH.

But everything said and done, the steth will always be a secondary coin and hence will have some differences with ETH.

Price analysis

Graph inference -

The graphs of stETH and ETH are inseparable to the naked eye. This means that the two variables are highly correlated.

error terms

It appears that there is a lot of error (or the difference between tokens) is highest on august 6 2021.

Reasoning

The huge difference can be because of some market turbulence. It was on august 5 2021 that the london upgrade was completed.

london upgrade was famous for

1. Move to a better PoS system.
2. reformed transaction fee market
3. gas handling changed