Liquid Staking
Staking while receiving a token representing staked capital — free for DeFi use.
Liquid staking solves the key problem of classic staking — capital lockup. You deposit ETH, receive stETH (liquid staking token) which:
•Automatically accumulates staking rewards
•Can be used in DeFi protocols
•Can be sold on DEX whenever you want
Most popular liquid staking protocols:
•Lido (stETH) — dominant, ~33% of all staked ETH, ~3.5% APY
•Rocket Pool (rETH) — decentralized, trustless, ~3.4% APY
•Frax ETH (frxETH) — hybrid model
•Jito (jitoSOL) — Solana liquid staking
Risks:
•Depeg — stETH can temporarily lose peg to ETH (happened in Terra/3AC collapse)
•Smart contract risk
•Centralization — Lido holds >30% of staked ETH, theoretical risk to Ethereum decentralization
Double yield: stETH in Aave → earn staking rewards + lending yield simultaneously.