Liquid Staking
Liquid Staking Overview
- What do we mean by Liquid Staking?
Staking is a process where cryptocurrency holders lock up their assets in a network, supporting its operations and security. In return, they earn rewards, typically in the form of additional tokens. However, traditional staking often means assets are tied up and can't be easily accessed.
Liquid staking allows users to stake their assets and earn rewards while also receiving a "liquid" representation of their staked assets, usually in the form of a token. This token can be traded, used in DeFi protocols, or even leveraged as collateral, granting users both the benefits of staking and the flexibility to utilize their assets.
As DeFi gained traction in 2022, liquid staking became increasingly popular. It blends the best of both worlds: the passive income opportunity of staking and the liquidity needed for diverse crypto activities. This innovation ensures that users aren't forced to choose between earning rewards and having assets ready for other opportunities.
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