The StakedEthToken is an ERC-20 contract. It reflects the deposits made by the stakers in the form of stETH tokens. The tokens are mapped 1 to 1 to ETH.

The total supply of stETH is the sum of all the StakeWise Pool's validators' effective balances, plus an additional amount of up to (32 ETH - 1 Wei) ETH awaiting inclusion into a new validator. ​

Emission

The stETH tokens are minted on every pool deposit 1 to 1 to the deposited ETH amount. The amount of stETH a staker holds will determine how much rwETH they accrue. If the staker's rwETH balance falls below 0, it gets deducted from the stETH balance. Once the rwETH balance is restored back to 0, the staker's stETH balance will return to its initial value.

An example of tokens' emission:

1. The deposit of 5 ETH is added to the StakeWise Pool. The total supply of StakedEthToken contract is now 5 stETH.

2. The deposit of 28 ETH is added to the StakeWise Pool. The total supply of StakedEthToken contract is now 32 stETH. The new validator is now running for the Pool.

3. The validator's balance has changed from 32 ETH to 33 ETH. The BalanceReporters contract submits a total reward of 1 ETH to the RewardEthToken contract. The total supply in the StakedEthToken remains 32 stETH and the total supply of theRewardEthToken is 1 rwETH.

4. The validator's balance has dropped from 33 ETH to 31 ETH. The BalanceReporters contract submits a total reward of -2 ETH to the RewardEthToken contract. The total supply in the StakedEthToken changes to 31 stETH and the total supply of RewardEthToken becomes 0 rwETH.

5. The validator balance has increased from 31 ETH to 35 ETH. The BalanceReporters contract submits a total reward of 3 ETH to the RewardEthToken contract. The total supply in the StakedEthToken changes to 32 stETH and the total supply of RewardEthToken becomes 3 rwETH.