💧 "What is Liquid Staking?" Think of it like: Saving money in a bank but still... being able to withdraw and use it!
You know about staking, right? (if not, simply understand it as: depositing coins into a system to earn interest).
The issue is: when you stake, it is usually locked, meaning you cannot use it, sell it, or transfer it.
But in crypto, liquidity is extremely important.
That's why a smarter "invention" has emerged: Liquid Staking.
💡 Imagine it simply like this:
You stake 1 ETH to earn interest.
The system will hold your ETH while giving you a "certificate" - called a liquidity token (for example: stETH, rETH, ankrETH...).
This certificate has a value equivalent to real ETH.
→ You can use it for trading, collateral, farming, borrowing, or even swapping for other currencies.
So:
You still earn interest from staking, while also being able to use that capital for other activities.
Pretty convenient, right?
📌 Main benefits:
Earn staking interest,
Maintain liquidity,
Combine multiple DeFi strategies at once (for example: stake → get liquidity token → use it for farming → optimize profit).
⚠️ But there are also risks:
The price of liquidity tokens (like stETH) may slightly differ from real ETH → this is called losing peg.
It depends on the credibility of the liquid staking platform (like Lido, RocketPool…).
If the system is hacked or there is a smart contract bug → you could lose your assets.
✅ In summary:
Liquid staking is a form of coin staking to earn interest, while still retaining the right to use capital through representative tokens that help you be flexible and optimize efficiency in the DeFi world.