The stKSM token is a tokenized version of staked xcKSM. When a user transfers xcKSMs into the Lido liquid staking smart contract, they receive the corresponding amount of stKSM tokens. The stKSM token represents Lido users’ deposits, corresponding staking rewards, and slashing penalties. The stKSM token is a liquid alternative to staked xcKSMs: it can be transferred, traded, or used in DeFi applications. Lido makes the stKSM token balance track the corresponding balance of the Kusama chain KSMs. A user’s balance of stKSM tokens corresponds 1:1 to the amount of KSM a user can receive.
While the fact that the stKSM balance tracks the corresponding amount of the Kusama chain so that xcKSMs should be the main driver of the stKSM/xcKSM exchange rate, several other factors are affecting the market prices.