Liquid Staking Explained

[lingriiddd]

Liquid staking allows users to stake assets (ETH, SOL, etc.) but receive derivative tokens representing their staked assets, which can be used in DeFi. Examples: stETH (Lido), rETH (Rocket Pool).

Benefits for advanced users:

Maintain staking yields while providing liquidity

Use staked assets as collateral for loans or leverage

Hedge or arbitrage across protocols

️ Risks: Smart contract failures or peg divergences can affect derivative liquidity.