Liquid Staking

Liquid staking lets a holder stake tokens to help secure a proof-of-stake network while keeping a tradable claim on the deposit. The user sends assets to a staking protocol and receives a liquid staking token in return, representing the stake plus accrued rewards, which can then be traded, lent or used as collateral elsewhere in DeFi. This removes the usual trade-off between earning staking rewards and keeping funds usable, and it sidesteps the unbonding delay many networks impose on direct withdrawals. The trade-off is extra layers of risk: the staking contract can be exploited, validators can be penalised for misbehaviour, and the liquid staking token can trade below the value of the asset it represents.