Liquid staking lets you stake your crypto and receive a tradeable token in return that represents your staked position. You earn staking rewards while still being able to use that token in DeFi protocols.
2How does it work?
When you deposit ETH into Lido, you receive stETH. This token increases in value as staking rewards accumulate. You can then use stETH in lending protocols, liquidity pools, or sell it at any time.
3Risks to know
Liquid staking introduces smart contract risk on top of regular staking risk. The liquid token can trade at a discount to the underlying asset (depeg risk). Always research protocols before depositing large amounts.
4Top liquid staking protocols
Lido (ETH, SOL, MATIC), Rocket Pool (ETH), Marinade (SOL), and Benqi (AVAX) are among the most established. Each has different fee structures, validator sets, and DeFi integrations.