Hello, I am a friend who is interested in cryptocurrency. Wondering what all the buzz about Liquid Staking is about? I mean, we’ve seen and talked about it throughout the timeline. Let’s break it down into simple terms.
What is Liquid Staking?
Imagine being able to receive rewards from cryptocurrency without having to lock it up. That’s Liquid Staking for you! Instead of tying up your tokens, you can stake them and retain access to their value.
How does it work?
Lock your cryptocurrency in a special location that supports staking. This helps secure the blockchain and earn rewards. In return, you get something cool called a Liquid Stake Token (LST). This is like a voucher for staked tokens. You can use it in DeFi or trade it while earning rewards. Examples include Swell (swETH) and Renzo (ezETH). Eigenlayer is the father of Liquid Stake and Restake pools.
Example time!
Let’s say you staked your Ethereum using Lido Finance. eight! In return, you will receive stETH (staked ETH). You can spend stETH on a variety of DeFi apps and continue to earn rewards. Lido is very popular with this product and is leading the pack with fixed overall value!
Centralized vs. distributed
If you want convenience, centralized platforms like Bybit and Binance can help. But beware of the risk of going bankrupt, getting screwed, etc.
Decentralized options like Lido Finance and Rocket Pool cut out the middleman. You will still have control over your assets, but it will require some web3 know-how.
airdrop, airdrop, airdrop
Now let’s look at the juicy part of the meat: the airdrop. Liquid staking and re-staking have opened many doors for airdrop farmers. People stake assets like Ethereum and then receive LTS in return and stake that too. Additionally, many of these routes earned Eigenlayer points, so farmers ended up farming 2-3-4 airdrops.
Some even took out loans by borrowing LTS to circulate airdrop channels.
Here are a few airdrops you can check out for Liquid staking opportunities:
be careful…
Smart contract risks: Sometimes problems can arise with these contracts. Watch out for bugs!
Lack of control: When you stake, you may be giving up some say in how things play out.
Simply put, it’s liquid staking! Dive, but watch out for these hazards. Have fun staking!
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You might also like our recent guides on runes and wormholes (staking).
