Liquid staking
Staking native tokens (ETH, SOL, etc.) through a protocol that issues a tradable receipt token, allowing the staked position to remain liquid and used elsewhere in DeFi.
Native staking locks tokens for a period (Ethereum: until withdrawal queue clears; Solana: epoch boundaries; Cosmos: 21-day unbonding) — capital cannot be moved or used. Liquid staking solves this: deposit ETH with Lido, get stETH back. stETH represents your staked position, accrues rewards, and can be sold, lent, or used as collateral.
Lido dominates ETH liquid staking with ~30% of all staked ETH. Rocket Pool, Frax, and Coinbase's cbETH are notable competitors. Each has trade-offs in decentralization (Lido uses 30+ node operators; Rocket Pool requires permissionless node operators), fee (5-15% of rewards), and slashing risk pooling.
The receipt token (LST — liquid staking token) sometimes trades at slight discounts/premiums to the underlying. stETH usually trades within 0.5% of ETH; in stress events (like FTX collapse, May 2022 stETH depeg) it has briefly traded at 5-7% discounts as forced sellers offloaded.
Liquid staking unlocked the largest DeFi-yield primitive on Ethereum. Most capital staking via DeFi today goes through liquid staking protocols.
How CryptoRadar24 tracks it
CryptoRadar24 includes liquid staking protocols in DeFi TVL snapshots — Lido, Rocket Pool, etc. are routinely in the top 10 by TVL.
Related terms
FAQ
What is the difference between staking and liquid staking?
Native staking locks your tokens. Liquid staking gives you a tradable receipt token (LST) that represents the staked position, so you can use it elsewhere while still earning staking rewards.
Is stETH the same as ETH?
Functionally similar but not identical. stETH represents staked ETH plus accrued rewards. It usually trades at par with ETH but can briefly depeg during stress events.
What are the risks of liquid staking?
Smart contract risk (bugs in the staking contract), validator slashing risk (operators can be penalized), and depeg risk (forced selling can push LST below underlying).
What is restaking?
A second-layer concept (EigenLayer): users restake their already-liquid-staked ETH to secure additional services, earning extra yield in exchange for additional slashing exposure.