What is liquid staking?
Liquid staking is easy to understand. Liquid staking is a rapidly growing solution for locking up a user's tokens and contributing to the security of proof of stake blockchains.
- Liquid staking is a software solution that enables users to stake directly on a proof of stake network such as Ethereum, with a liquid staking token (LST) programmatically minted by the protocol providing access to liquidity while the user stakes.
- In liquid staking, token holders stake their token and receive a receipt token, called a liquid staking token (LST), to evidence ownership of their staked token.
- The LST can be transferred, stored, traded, and utilized in DeFi or supported dapps.
Liquid staking can often be shrouded in jargon, but at its core the technology is simple to understand. Liquid staking is a software solution that enables users to stake directly on a proof of stake (PoS) network such as Ethereum, and receive a liquid staking token (LST) programmatically minted by the protocol when the user stakes. This LST provides access to liquidity while the user stakes.
What is liquid staking?
Liquid staking is a rapidly growing solution for locking up a user's tokens and contributing to the security of proof of stake blockchains. With liquid staking, participants can stake directly on a PoS network without compromising their ability to transfer ownership of their staked tokens by generating a transferable liquid staking token (LST), which demonstrates ownership of staked tokens and any network rewards accrued to those tokens.
Whereas traditional methods of staking are subject to bonding and unbonding periods (ranging from days to weeks), liquid staking provides stakers with increased liquidity and capital efficiency. Token holders stake their token and receive a receipt token as evidence of their ownership of their staked token. The receipt token can be transferred, stored, traded, and utilized in DeFi or supported dapps.
What is LsETH?
Liquid Staked ETH (LsETH) is the receipt token programmatically generated when users stake ETH through the Liquid Collective protocol. Dive into LsETH, its use cases, the risks of liquid staking, the tax implications, and more. Read more
What is Liquid Collective?
Liquid Collective is the secure liquid staking standard: a protocol with multi-chain capabilities designed to meet the needs of institutions, built and run by a collective of leading web3 teams. Liquid Collective will be governed in a decentralized manner by a broad and dispersed community of industry participants. Learn more
Liquid Collective Litepaper
Learn about the growth of liquid staking, Liquid Collective, the protocol's features and more in our comprehensive Litepaper.
Download PDF · 2.1 MBMore resources to learn about liquid staking
- What are Liquid Staking Tokens (LSTs)? · Exploring liquid staking tokens (LSTs), the tokens programmatically minted when a user stakes their tokens via a liquid staking protocol. LSTs represent ownership of the staked tokens and any network rewards earned from participating in the network.
- Event: “Liquid Staking: The Next Big Wave” — a Panel in NYC Presented by Coinbase Cloud and Alluvial · A panel discussion on liquid staking and Liquid Collective, with representatives from Coinbase Custody, Alluvial, Figment, Kiln, Kraken, and Coinbase Cloud. Presented by Coinbase Cloud and Alluvial at the Messari Mainnet conference in NYC.
- Growth of the Liquid Staking Market · Examining market conditions that led to the recent upsurge in liquid staking demand and how a greater diversification of alternatives could help the sector grow — Coinbase
- What are Liquid Staking Tokens (LSTs)? · Mike Selig and Alison Mangiero discuss at ETHDenver · Alison Mangiero, Executive Director of the Proof of Stake Alliance, caught up with Mike Selig, Counsel at Willkie Farr & Gallagher LLP, to discuss liquid staking and the first research and analysis into key legal questions surrounding the taxation and regulation of liquid staking and LSTs in the US.
- Stake Now or Get in Line · Alluvial CEO Mara Schmiedt explores how Ethereum's activation and exit queues affect the liquidity of staking on the network, and how LSTs can improve the experience. — Alluvial
- Liquid Collective's Slashing Coverage Program · Three layers of slashing coverage are available for every participant staking through the Liquid Collective protocol including network-wide events, such as network outages, and node operator failures.
Please note
LsETH users may still be subject to slashing losses. If slashing losses were to occur, they would be socialized pro rata for all LsETH user's starting with earned but unredeemed network rewards.
Liquid staking via the Liquid Collective protocol and using LsETH involves significant risks. You should not enter into any transactions or otherwise engage with the protocol or LsETH unless you fully understand such risks and have independently determined that such transactions are appropriate for you.
Any discussion of the risks contained herein should not be considered to be a disclosure of all risks or a complete discussion of the risks that are mentioned. The material contained herein is not and should not be construed as financial, legal, regulatory, tax, or accounting advice.
