What is liquid staking?

Liquid staking empowers cryptocurrency enthusiasts to earn rewards while maintaining liquidity, enabling them to participate in staking without sacrificing the flexibility of their assets.

Feb 24, 2025 at 06:24 pm

Key Points:

• Liquid staking offers flexible access to staked assets while earning rewards.
• Different platforms provide varying fees, earning rates, and token representations.
• Consider factors such as security, liquidity, and staking requirements when choosing a liquid staking provider.
• An in-depth analysis of the top 5 liquid staking providers excluding FTX.

What Is Liquid Staking?

Liquid staking is a revolutionary concept in cryptocurrency that enables individuals to participate in staking without locking up their assets. Unlike traditional staking, where assets are frozen for extended periods, liquid staking allows users to maintain liquidity while earning rewards. This unlocks new opportunities for earning passive income and accessing staked assets for liquidity purposes.

Top 5 Liquid Staking Providers (Excluding FTX)

1. Lido Finance

• Largest liquid staking platform in the industry.
• Supports a wide range of assets, including ETH, DOT, and MATIC.
• Low fees and high earning rates.
• Represents staked assets with stETH, which can be traded or used as collateral.

2. Rocket Pool

• Decentralized liquid staking platform.
• Operates on a node-based system, ensuring higher security.
• Offers flexible staking options and customizable rewards.
• Represents staked assets with rETH, which is fungible with ETH.

3. StakeWise

• Non-custodial liquid staking platform.
• Supports ETH and ETH2 staking.
• Transparent and verifiable infrastructure.
• Represents staked assets with sETH2, which can be withdrawn effortlessly.

4. Coinbase

• Centralized exchange offering liquid staking services.
• Convenient and user-friendly interface.
• Competitive earning rates and low fees.
• Represents staked assets with cbETH, which can be traded directly on Coinbase.

5. Ankr

• Web3 infrastructure provider offering liquid staking services.
• Supports multiple assets, including ETH, DOT, and ATOM.
• High earning rates and low fees.
• Represents staked assets with aBNBc, a wrapped version of bnETH, which grants flexibility and interoperability.

Factors to Consider When Choosing a Liquid Staking Provider:

• Fees: Compare the fees charged by different platforms for staking, unstaking, and other services.
• Earning Rates: Research the earning rates offered by each provider and consider the potential rewards based on the staked asset.
• Security: Evaluate the security measures implemented by the platform to protect staked assets from hacks or vulnerabilities.
• Liquidity: Consider the liquidity of the staked assets, represented by staked tokens, and how easily they can be traded or withdrawn.
• Staking Requirements: Determine any minimum or maximum staking requirements imposed by different providers.

FAQs:

Q: What are the risks associated with liquid staking?

A: Liquid staking introduces risks such as smart contract vulnerabilities, platform insolvency, and price volatility of staked tokens.

Q: How do I choose the best liquid staking provider for my needs?

A: Consider your individual requirements, such as fees, earning rates, security, liquidity, and supported assets, to determine the most suitable platform.

Q: What are the benefits of liquid staking over traditional staking?

A: Liquid staking offers flexibility, increased earning potential, and access to staked assets for liquidity purposes, which are not available with traditional staking.