Crypto Staking: What You Need to Know
Crypto staking has quickly become a popular way for investors to earn rewards for holding onto their digital assets. Staking helps to secure the network and validate transactions.[0] By staking, users also ensure that the blockchain remains decentralized.[1] Liquid staking takes this concept a step further by allowing users to earn rewards while still being able to use their assets.
Liquid staking cryptocurrency offers users a variety of benefits, including immediate liquidity, composability of staked assets, and distribution of stake across multiple validators. However, there are some risks involved in liquid staking as the market’s liquidity for liquid staking tokens is limited.[2] Depending on the platform chosen, stakers can take on either custody risk or smart contract risk.[2]
Ethereum is one of the most popular blockchains currently using a proof-of-stake mechanism.[3] On September 15th, 2022, the main Ethereum chain successfully merged with the Beacon chain, which had been running through a proof-of-stake consensus since 2020.[3]
Lido Finance is the leading liquid staking solution for Ethereum and wNEAR token holders. With Lido, users can stake their Ethereum and receive stNEAR tokens in return. These tokens can then be used for DeFi activities in the larger Near ecosystem and its yield-aggregating system, Aurora.[4]
Stakewise is another liquid staking provider that has partnered with Finoa to build liquid staking infrastructure on Ethereum and Gnosis.[2] Stakewise has also created a yield-aggregating service to bring the best of staking, yield farming, and liquidity mining together.
At Boosty Labs, we specialize in developing liquid staking platforms.[5] Our team combines consulting, strategy, design and engineering at scale to provide users with the best liquid staking solutions.
Liquid staking is a great way to generate additional yield on your staked assets while still having access to them. It also gives users the option to use their funds for other crypto-based activities while still earning rewards from their original deposit.[4] However, it’s important to remember that Ethereum staking will not be able to be unstaked until the Shanghai upgrade is deployed.[3]
Overall, liquid staking is an attractive option for crypto investors looking to compound their yield and make the most out of their staked assets.
0. “What is Liquid Staking, and Why Do We Need It? – RockX” blog.rockx.com, 18 Jan. 2023, https://blog.rockx.com/liquid-staking-101/
1. “3 Benefits of Liquid Staking Cryptocurrency – pSTAKE Blog” blog.pstake.finance, 18 Jan. 2023, https://blog.pstake.finance/2022/07/05/three-major-benefits-of-liquid-staking-cryptocurrency/
2. “What is liquid staking and how does it work? – Finoa” www.finoa.io, 18 Jan. 2023, https://www.finoa.io/blog/guide-liquid-staking/
3. “Crypto Staking Rewards: Best Staking Platform Rates 2023” milkroad.com, 18 Jan. 2023, https://milkroad.com/staking
4. “What Is Liquid Staking? – OKX” www.okx.com, 18 Jan. 2023, https://www.okx.com/learn/what-is-liquid-staking
5. “Liquid staking platform development – Boosty Labs” boostylabs.com, 18 Jan. 2023, https://boostylabs.com/blockchain/liquid-staking-platform
