Skip to main content

What is a Liquid Staking?

Liquid staking is a modern solution in the cryptocurrency world that allows users to stake their tokens while maintaining liquidity. Here are five key points about liquid staking:

  • Continued Liquidity: Users can stake their tokens and still retain liquidity, allowing them to participate in DeFi activities or trade their staked tokens without waiting for the unbonding period.

  • Staking Derivatives: When users stake their tokens through a liquid staking protocol, they receive staking derivatives or tokens representing their staked assets, which can be used across various platforms.

  • Increased Capital Efficiency: Liquid staking enhances capital efficiency by enabling staked assets to be utilized in multiple financial activities, thus maximizing the potential returns.

  • Mitigated Risks: Liquid staking reduces the risk associated with traditional staking, such as the inability to access funds during the staking period, by allowing instant liquidity.

  • Enhanced Participation: By offering the flexibility of liquidity, liquid staking encourages more users to participate in staking, contributing to network security and decentralization.

Liquid Staking Use-Cases​

Liquid staking has several use cases that enhance the functionality and flexibility of staked assets. Here are some key use cases:

  • Users can stake their tokens while receiving liquid staking derivatives, which can be traded or used in DeFi applications, maintaining asset liquidity.

  • Liquid staking allows users to earn staking rewards while simultaneously participating in yield farming or liquidity provision, potentially increasing overall returns.

  • Staking derivatives can be used as collateral in lending platforms, enabling users to take out loans without needing to unstake their assets.

  • Staked assets can be utilized across various DeFi protocols, such as automated market makers (AMMs), decentralized exchanges (DEXs), and other financial instruments, enhancing the utility of staked tokens.

  • By maintaining liquidity, liquid staking helps users manage risks better, allowing them to react quickly to market changes without waiting for unstaking periods.

Platforms with Liquid Staking​

Here are some projects that offer Liquid Staking:

  • Lido is a leading liquid staking platform that allows users to stake Ethereum (ETH), Solana (SOL), and other cryptocurrencies while receiving staked derivatives that can be used in DeFi.

  • Ankr provides liquid staking for various blockchains, including Ethereum, Binance Smart Chain, and more, allowing users to earn staking rewards while maintaining liquidity.

  • Marinade Finance offers liquid staking for Solana (SOL), giving users the ability to stake SOL and receive mSOL, which can be utilized across DeFi platforms.