Liquid Staking
Also known as: Staking Derivatives, DeFi Staking, Tokenized Staking
A staking method that allows users to earn rewards while maintaining liquidity through tradable derivative tokens.
Liquid staking enables users to stake their crypto assets and earn rewards without locking them up. In return, users receive a liquid token (e.g., stETH, rETH) that represents their staked position and can be used in DeFi protocols. This unlocks capital efficiency, allowing users to borrow, lend, or trade while earning staking rewards. Platforms like Lido, Rocket Pool, and Marinade Finance offer liquid staking for assets such as ETH, SOL, and DOT. While beneficial, liquid staking introduces risks like smart contract vulnerabilities and dependency on validator performance.