Frax Finance (frxETH/sfrxETH) consistently offers the highest APR among major ETH LSDs. Its two-token design (frxETH + sfrxETH) concentrates staking rewards on sfrxETH holders, delivering yield premiums over stETH and rETH.
The two-token model
frxETH:
The base liquid staking token. Value-accruing 1:1 with ETH. Doesn't itself earn staking rewards — used for DeFi liquidity provision.
sfrxETH:
Stake frxETH into sfrxETH to earn ALL of the staking rewards from ALL frxETH in existence (including the LP-deployed frxETH). This concentration means sfrxETH APR consistently beats stETH.
Yield mechanics
- sfrxETH APR: typically 4-6% (vs stETH's 3-4%)
- Concentration effect: when more frxETH is deployed in DeFi (not staked as sfrxETH), sfrxETH APR increases
- Curve pool: deep frxETH/ETH liquidity for entering/exiting
Trade-offs vs stETH
sfrxETH has smaller DeFi integration depth than stETH. Aave, Compound, and Morpho support it, but not with the same collateral depth as stETH. For pure staking yield, sfrxETH wins; for DeFi collateral usage, stETH remains stronger.
Verdict
Frax's frxETH/sfrxETH is the top choice for maximum ETH staking APR. If you're holding ETH for yield rather than DeFi collateral, sfrxETH beats stETH consistently.