Beacon ETH (BETH) Explained: What the Liquid Staking Token Is and How It Works

When Ethereum switched from proof‑of‑work to proof‑of‑stake, a new way to hold staked ETH showed up: Beacon ETH (BETH) is a tokenized representation of ETH that’s been locked in the Ethereum 2.0 Beacon Chain. In plain English, BETH lets you earn staking rewards while still being able to trade, lend, or use the token elsewhere. If you’ve heard the term but aren’t sure what it actually does, this guide walks through the basics, the tech behind it, how it differs from similar tokens, and what you should watch out for before buying.

Why BETH Exists - The Liquidity Gap During The Merge

Before September 2022, anyone who wanted to stake ETH had to lock at least 32 ETH in a validator node for an indefinite period. That lock‑up meant the assets were completely illiquid - you couldn’t sell or move them until withdrawals were finally enabled (which happened with the Shanghai upgrade in April 2023). To bridge that gap, the Ethereum Foundation introduced BETH as a 1:1 “receipt” for the ETH you deposited into the Beacon Chain.

Because BETH mirrors the amount of staked ETH + earned rewards, its market price stays tightly pegged to ETH. The token therefore provides liquidity: you can sell BETH on an exchange, use it as collateral, or swap it for other assets while still earning the underlying staking yield.

How BETH Works - The 1:1 Peg and Reward Accrual

When you send ETH to the official deposit contract, the contract mints an equal amount of BETH on the chosen network (Ethereum, BNB Chain, or Huobi Token Chain). The minted BETH is backed 1:1 by the staked ETH + the validator rewards that accumulate over time. In practice, the smart contract updates the BETH balance automatically; you don’t need to claim rewards manually.

After The Merge, the Beacon Chain became part of the main Ethereum network, but BETH kept working as a liquid representation of those validator positions. The token’s price usually moves within a 0.5‑1 % band of ETH, reflecting the small rounding differences that can appear on secondary markets.

Beyond BETH - Wrapped Beacon ETH (WBETH) and Other Liquid Staking Derivatives

Binance introduced a wrapped version called WBETH (Wrapped Beacon ETH) - an ERC‑20 token that represents staked ETH plus any earned rewards in a fully tradable form. WBETH differs from plain BETH in two ways:

1. It bundles the reward accrual directly into the token balance, so the price steadily climbs above 1 : 1 as rewards compound.
2. Binance allows you to stake as little as 0.0001 ETH, removing the 32 ETH barrier entirely.

Other popular liquid staking tokens include Lido’s stETH which represents ETH deposited through Lido’s decentralized staking pool and Coinbase’s cbETH a custodial staking derivative offered on the Coinbase platform. Each of these tokens trades at a slight premium or discount to the underlying ETH, depending on market demand and the provider’s fee structure.

Comparison Table: BETH, WBETH, stETH & cbETH

How to Get BETH or WBETH - Step‑by‑Step

Whether you’re a seasoned trader or a newcomer with a few dollars, the process is straightforward.

1. Open an account on a supported exchange (Binance, Huobi, or a BNB‑Chain compliant DEX).
2. Deposit ETH to the exchange’s staking portal. For BETH you’ll typically need the full 32 ETH; for WBETH you can start with as little as 0.0001 ETH.
3. Choose the “Stake ETH” option. The platform will lock your ETH in the Beacon Chain deposit contract and automatically credit you with the equivalent amount of BETH or WBETH.
4. Verify the receipt: you should see the newly minted token appear in your wallet under the correct contract address (e.g., BETH ERC‑20: 0xa2E3356610840701BDf5611a53974510Ae27E2e1).
5. If you want to move the token off‑exchange, copy the contract address into a compatible wallet (MetaMask, Trust Wallet) and add it as a custom token.

Most users report that the whole flow takes under five minutes, especially on Binance where the UI guides you through each step.

Benefits of Using BETH/WBETH

• Liquidity: You can sell or transfer the token at any time, avoiding the 32‑ETH lock‑up.
• Passive rewards: Staking rewards are automatically added, requiring no extra action.
• Low entry barrier (WBETH): Retail investors can start with fractions of an ETH.
• DeFi integration: Both BETH and WBETH are accepted as collateral on many lending platforms, including Aave and Compound.

Risks and Drawbacks to Keep in Mind

Liquidity isn’t free. Because the token is issued by a centralized service (Binance for WBETH, the Ethereum Foundation for BETH), you inherit counter‑party risk. If the issuer faces a hack or regulatory action, the token could trade at a discount or become temporarily unredeemable.

Price divergence is another practical concern. While BETH stays within a tight band of ETH, WBETH can drift 0.5‑1.5 % due to market supply/demand or delayed reward accounting. Users have reported losing a few basis points when swapping back to ETH.

Finally, there’s the decentralization argument. Researchers like Ben Edgington warn that heavy concentration of liquid staking derivatives could give a single provider too much influence over validator selection, potentially weakening the network’s security model.

Market Landscape - How Big Is BETH Today?

As of October 2025, total value locked (TVL) in liquid staking derivatives sits at roughly $16 billion, according to DefiLlama. BETH‑related tokens (BETH + WBETH) account for about $2.5 billion, roughly 15‑16 % of the entire liquid‑staking market. The broader Ethereum staking pool is over 24 million ETH (≈$100 billion), so liquid derivatives still control around 20 % of all staked ETH.

Binance alone reports over 1.2 million users have staked more than 3.5 million ETH through its platform, representing roughly 5 % of the total network stake. Meanwhile, Lido’s stETH dominates the space with about 32 % market share, followed by Rocket Pool’s rETH and Coinbase’s cbETH.

Regulatory chatter continues. The U.S. SEC’s 2023 guidance hinted that liquid staking tokens could be treated as securities, but no formal action has been taken yet. This uncertainty adds a layer of compliance risk for institutional investors.

Future Outlook - Will BETH Remain Relevant?

Even after the Shanghai upgrade enabled direct withdrawals, demand for liquid staking derivatives has not vanished. Analysts at Delphi Digital project that liquid staking will hold 15‑25 % of total staked ETH through 2025, driven by retail demand for low‑minimum staking and the expanding DeFi ecosystem.

Potential game‑changers include EigenLayer’s restaking protocol, which could let WBETH secure additional layers (e.g., rollups) and generate extra yield. If that integration materializes, WBETH’s TVL could surge beyond $3 billion.

On the other hand, Ethereum’s upcoming distributed validator technology (DVT) aims to lower the technical barrier for running a validator, which could erode the need for centralized derivatives. Until DVT is live, BETH and its wrapped version will likely stay a convenient bridge for small‑holder participation.

Quick Checklist Before You Stake

• Confirm the contract address of the token you’re buying (avoid fake tokens).
• Understand the fee structure: Binance charges a small performance fee on WBETH rewards; BETH itself has no on‑chain fee but may incur exchange withdrawal costs.
• Check the current premium/discount to ETH on reputable aggregators (CoinGecko, CoinMarketCap).
• Assess your risk tolerance for centralization - the larger the provider’s share of validator power, the higher the systemic risk.
• Plan an exit strategy: know how to convert WBETH/BETH back to ETH and the expected time delay.

Bottom Line

If you want to earn Ethereum staking rewards without locking up 32 ETH or dealing with node setup, BETH and WBETH give you a practical shortcut. They provide liquidity, integrate with DeFi, and let tiny investors join the staking economy. However, they come with centralization and price‑divergence risks that you should weigh against the convenience. Use the checklist, start small, and keep an eye on market developments - that’s the safest way to dip your toe into liquid staking.