Liquid staking tokenizes staked assets, providing enhanced utility and liquidity compared to traditional staking methods.
It addresses the liquidity issue associated with traditional staking, offering greater flexibility for users to utilize their staked assets in various DeFi applications.
Liquid staking can enhance token utility and value, fostering the development of new applications and encouraging crypto adoption.
Introduction
Liquid staking is an innovative concept that allows users to enhance the utility of the digital assets they stake. This quick guide explores the fundamentals of liquid staking, how it works, why it matters, its pros and cons, and how it differs from other forms of staking.
What Is Liquid Staking and How Does It Work?
In short, liquid staking is the tokenization of staked assets. We can think of it as an evolved version of traditional staking.
Conventional staking involves locking assets on a Proof of Stake (PoS) blockchain for a chance to receive rewards while contributing to the network’s security. However, this process often comes with a trade-off, as staked assets are typically illiquid (locked) during the staking period.
Liquid staking addresses this issue by introducing a mechanism where users can stake their assets without compromising liquidity. There are different ways of building such a mechanism, but as long as it offers liquidity to staked assets, we can call it liquid staking.
In some cases, users receive liquid staking tokens (LSTs) in exchange for their staked assets. For example, if you stake ETH on a platform like Lido, you will receive stETH tokens in return. This model is also known as liquid staking derivatives.
In other cases, the assets can be staked directly without using LSTs. For example, when staking ADA on the Cardano blockchain. This model is also known as native liquid staking.
Liquid staking gives staked tokens more flexibility and utility, as users can benefit from staking rewards without compromising liquidity.
Why Does Liquid Staking Matter?
Liquid staking addresses the liquidity issue associated with traditional staking, providing users with greater flexibility and accessibility to their staked assets.
Platforms like Lido and Cardano can offer users the opportunity to earn staking rewards while still being able to trade and use their staked assets in decentralized finance (DeFi) applications.
In addition, liquid staking contributes to the overall growth and adoption of blockchain networks by encouraging more active participation from users who may have been hesitant to lock up their assets for extended periods.
Pros and Cons of Liquid Staking
Pros
1. Enhanced utility: Users can put their staked assets to use in different DeFi applications without giving up on staking rewards.
2. Reduced opportunity cost: Liquid staking allows users to take advantage of potential trading and investing opportunities using liquidity that would be unavailable in traditional staking methods.
3. Cryptocurrency adoption: Liquid staking can enhance token utility and value, fostering the development of new applications and encouraging crypto adoption.
Cons
1. Slashing risk: Dishonest validators can be removed from the network and have a portion of their staked tokens “slashed” (taken away). Users may also be exposed to slashing risk if their chosen validators get penalized.
2. Centralization concerns: Decentralization may be harmed if the majority of tokens are staked in a single protocol with its own set of validators. A diverse network of liquid staking protocols is preferable to mitigate centralization risks.
3. Regulatory uncertainty: Blockchain and cryptocurrency regulation is changing constantly and may vary significantly from one place to another. It’s important to check local laws before getting involved with liquid staking and DeFi platforms.
Liquid Staking vs. Liquid Restaking
As we’ve learned, liquid staking involves the tokenization of staked assets, enabling liquidity and flexibility without waiting for the staking period to end. Liquid restaking, introduced by EigenLayer, takes the concept further.
While liquid staking relates to staked assets that help secure a PoS blockchain, liquid restaking can expand security to oracles, rollups, and other “external” modules and systems. Examples of liquid staking projects include Lido (stETH), Cardano (ADA), Binance ETH (BETH), and Rocket Pool (RETH). Examples of liquid restaking projects include ether.fi, Puffer, and Kelp DAO.
Closing Thoughts
Liquid staking offers users a more dynamic and flexible approach to participating in staking ecosystems. By tokenizing staked assets and providing enhanced liquidity, liquid staking unlocks new possibilities for digital assets.
Further Reading
What Is Crypto Staking and How Does It Work?
What Is Proof of Stake (PoS)?
What Is EigenLayer?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
RedStone is a modular blockchain oracle that aims to provide customizable, low-cost, and secure data feeds for Web3 and DeFi applications.
It offers multiple data models that gather information from various sources, including cryptocurrency exchanges and other blockchain networks.
RedStone leverages the EigenLayer protocol to increase security, ensure data accuracy, and prevent manipulation.
RedStone’s oracle services are useful in many areas of DeFi and blockchain applications, including lending, trading, staking, and yield farming.
Introduction
RedStone is a blockchain oracle designed to bring real-world data into smart contracts on different blockchains. This is important for Web3 and decentralized finance (DeFi) applications that need reliable price information and other data to work properly. RedStone aims to provide customizable, low-cost, and secure data feeds that support over 1,250 assets across dozens of blockchains.
What Is RedStone?
RedStone is a system that provides financial data to decentralized applications (DApps). Unlike traditional oracles that store data directly on the blockchain, RedStone takes a different approach to make data delivery faster and cheaper. It offers multiple ways for DApps to access the data they need, depending on their specific requirements.
Since its launch in 2021, RedStone has been adopted by many DeFi projects, including EtherFi, Ethena, Pendle, Solv, Venus, and Puffer.
How RedStone Works
RedStone provides data to DApps through different models of data consumption, allowing clients and developers to choose the most suitable option. It has a modular architecture that handles data collection and data delivery separately, meaning it can scale better across multiple networks.
1. Data feeds and sources
RedStone gathers price information from various sources, including cryptocurrency exchanges and other blockchain networks. This data is then processed to ensure accuracy before being made available to smart contracts.
2. Data retrieval models
RedStone has a few different methods for getting data into smart contracts. The main ones are called Pull Model, Push Model, X Model, and Hybrid.
Pull Model
In this model, DApps retrieve the latest data only when they need it. This method is cost-efficient because it does not require continuous on-chain updates. Instead, data is stored off-chain and fetched by smart contracts only when required.
Push Model
With the push model, RedStone continuously updates price data on the blockchain. This is useful for applications that need real-time price updates, such as lending platforms and trading protocols.
X Model
The X Model provides extra security by preventing front-running attacks, ensuring that the price used in a transaction remains valid throughout its execution.
Hybrid Model (Push + Pull)
RedStone’s Hybrid Model was introduced as part of the ERC-7412. This model combines both push and pull strategies, allowing DApps to fetch data on demand while still having access to regularly updated on-chain information.
3. RedStone Actively Validated Service (AVS)
In 2025, RedStone introduced an Actively Validated Service (AVS) using the EigenLayer protocol and its restaking mechanisms. This system improves the security of price feeds by using a network of validators to verify the accuracy of data before it is published on-chain. This helps prevent manipulation and increases trust in the data RedStone provides.
Security
The RedStone platform has passed multiple security audits by firms like Halborn, Codespect, AuditOne, Cantina, PeckShield, and ABDK. These audits help ensure that the system is secure and free from vulnerabilities.
In addition, RedStone stores cryptographically signed records off-chain and uploads them to Arweave, a decentralized storage network. This makes sure that historical data remains tamper-proof and verifiable.
What Is RedStone Used For?
RedStone’s oracle services are useful in many areas of DeFi and blockchain applications, including lending, trading, staking, and yield farming.
1. Decentralized lending
Lending platforms need accurate price data to set borrowing limits and avoid bad loans. RedStone provides real-time prices to ensure fair lending conditions.
2. Perpetual trading
Traders in perpetual futures markets rely on accurate prices to settle contracts. RedStone helps decentralized exchanges by delivering up-to-date market data.
3. Staking and yield farming
Protocols that offer staking and yield farming need accurate price feeds to calculate rewards. RedStone ensures these calculations are based on trusted data.
4. Stablecoins and digital assets
Stablecoin projects need reliable exchange rates to maintain their value. RedStone helps them track real-world prices and keep their pegs stable.
5. Multi-chain applications
Since RedStone works across multiple blockchain networks, it’s useful for projects that operate on different chains. Its flexible system makes integration easy for developers.
The RED Token
RedStone’s native token, RED, was launched to help decentralize its oracle network and support its future growth. The token max supply is capped at 1 billion RED tokens, and 30% were made available at launch. The RED tokens follow the ERC-20 standard on Ethereum and can also be used on networks like Solana and Base through a cross-chain system called Wormhole.
The RED token is mainly used for staking, which helps keep the RedStone network secure. Data providers and token holders can stake their RED tokens through RedStone’s system, which works with EigenLayer’s AVS. In return, they can earn rewards in different cryptocurrencies like ETH, BTC, SOL, and USDC from users who rely on RedStone’s data.
The tokens are distributed to support the community and ecosystem. The breakdown includes 10% for early community members, 10% for development, 20% for team members, 28.3% for data providers, and 31.7% for early investors. Most of the tokens (70%) will be locked at first and released gradually over four years.
Closing Thoughts
RedStone is a blockchain oracle that aims to provide reliable, cost-efficient price feeds for DeFi and other blockchain applications. RedStone offers multiple methods for accessing and using data with support for more than 70 blockchain networks. Its modular approach ensures efficient data delivery, while the integration of EigenLayer’s AVS helps to provide security.
Further Reading
What Is EigenLayer?
What Are Actively Validated Services (AVS)?
What Is Liquid Staking?
Disclaimer: This article is for educational purposes only. This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
A #ETF (Exchange-Traded Fund, or Exchange-Traded Investment Fund) is a type of investment fund that is traded on a stock exchange, just like stocks.
An ETF is an investment vehicle that allows investors to access a diversified portfolio of assets, such as stocks, bonds, commodities, currencies, etc., through a single investment.
ETFs are characterized by:
1. Diversification: ETFs offer a diversified portfolio of assets, which can help reduce risk. 2. Flexibility: ETFs can be bought and sold at any time during the day, just like stocks. 3. Transparency: ETFs publish their asset portfolio daily, allowing investors to know exactly what assets they own. 4. Low costs: ETFs usually have lower management costs than traditional mutual funds. 5. Access to markets and assets: ETFs offer access to markets and assets that may be difficult to access otherwise, such as emerging markets or commodities.
There are different types of ETFs, such as:
- Equity ETFs: which track a stock index, such as the S&P 500. - Bond ETFs: which track a bond index, such as the U.S. Treasury bond index. - Commodity ETFs: which track a commodity index, such as gold or oil. - Currency ETFs: which track a currency index, such as the U.S. dollar currency index.
In summary, ETFs are a flexible and diversified investment tool that provides access to a wide range of assets and markets, with low costs and transparency.
#LitecoinETF #LitecoinETF How Litecoin ETFs Could Push LTC Price To $800 EXCAVO highlighted Litecoin ETFs as one of the factors that could push LTC price to $800 by the end of the cycle. He noted that Litecoin is just a fork of Bitcoin and there is not much technology in it. However, he added that there is a decentralization and adoption issue going on, making LTC a suitable candidate for a potential ETF. The analyst indicated that these Litecoin ETFs are one of the bullish fundamentals that could send LTC to this target price. * According to Bloomberg analysts Eric Balchunas and James Seyffart, there is a 90% chance that the US SEC will approve these funds this year. $LTC
#LitecoinETF How Litecoin ETFs Could Drive LTC Price to $800 EXCAVO highlighted Litecoin ETFs as one of the factors that could drive LTC price to $800 by the end of the cycle. It noted that Litecoin is just a fork of Bitcoin and that there isn't much technology in it. However, it added that a decentralization and adoption issue is occurring, making LTC a suitable candidate for a possible ETF. The analyst indicated that these Litecoin ETFs are one of the bullish fundamentals that could send LTC to this target price. * According to Bloomberg analysts Eric Balchunas and James Seyffart, there is a 90% chance that the U.S. SEC will approve these funds this year. $LTC
#LitecoinETF How Litecoin ETFs Could Push LTC Price To $800 EXCAVO highlighted Litecoin ETFs as one of the factors that could push LTC price to $800 by the end of the cycle. He noted that Litecoin is just a fork of Bitcoin and there is not much technology in it. However, he added that there is a decentralization and adoption issue going on, making LTC a suitable candidate for a potential ETF. The analyst indicated that these Litecoin ETFs are one of the bullish fundamentals that could send LTC to this target price. * According to Bloomberg analysts Eric Balchunas and James Seyffart, there is a 90% chance that the US SEC will approve these funds this year. $LTC How Litecoin ETFs Could Push LTC Price To $800 EXCAVO highlighted Litecoin ETFs as one of the factors that could push the price of $LTC to $800 by the end of the cycle. He noted that Litecoin is just a fork of Bitcoin and there is not much technology in it. However, he added that there is a problem of decentralization and adoption going on, making LTC a suitable candidate for a potential ETF. The analyst indicated that these Litecoin ETFs are one of the bullish fundamentals that could send LTC to this target price. * According to Bloomberg analysts Eric Balchunas and James Seyffart, there is a 90% chance that the US SEC will approve these funds this year. $LTC