Topic hubWhat is Liquid Staking?
Liquid staking solves a fundamental problem with proof-of-stake blockchains: when you stake tokens to help secure the network, they're locked up and unusable. Liquid staking protocols give you a receipt token (LST) representing your staked position, which you can then use throughout DeFi.
How Liquid Staking Works
- Deposit: You deposit ETH (or SOL, ATOM, etc.) into a liquid staking protocol
- Receive LST: You get a liquid staking token (stETH, rETH, mSOL) representing your stake
- Earn Rewards: Staking rewards accrue to your LST automatically
- Use in DeFi: Use your LST as collateral, in LPs, or hold for yield
Top Liquid Staking Protocols
Lido (stETH)- Largest liquid staking protocol (~$15B staked)
- stETH rebases daily (your balance increases)
- Widely accepted as collateral across DeFi
- ~3.5% base APY
- Most decentralized option
- rETH appreciates in value (no rebasing)
- Run your own node with just 8 ETH
- ~3.3% base APY
- Jito (jitoSOL): Leading Solana liquid staking with MEV rewards
- Marinade (mSOL): Decentralized Solana staking
- Stakewise (osETH): Isolated vault architecture
LST-fi: Maximizing LST Yields
Liquid staking tokens unlock "LST-fi" strategies:
Lending Collateral: Use stETH as collateral on Aave to borrow stablecoins, then deploy those for additional yield. Liquidity Provision: Provide stETH/ETH liquidity on Curve for trading fees + CRV rewards on top of staking yield. Pendle PT/YT: Split your LST into principal and yield components for fixed-rate or leveraged yield exposure. Restaking: Deposit LSTs into EigenLayer to earn additional rewards from securing other protocols.Risk Considerations
- Smart contract risk: LST protocols can have bugs
- Slashing risk: If validators misbehave, staked ETH can be slashed
- Depeg risk: LSTs can temporarily trade below peg during market stress
- Centralization: Some protocols have concentrated validator sets