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What is Liquid Staking?
Liquid staking lets you stake crypto and receive a tradeable token (like stETH) in return. You earn staking rewards while keeping your capital usable in DeFi.
Full Explanation
Traditional staking locks your crypto — you can't use it until you unstake. Liquid staking solves this by giving you a receipt token (LST) representing your staked position. Lido's stETH is the largest: stake ETH, receive stETH that earns ~3-4% APY and can be used as collateral in DeFi. Other LSTs: rETH (Rocket Pool), cbETH (Coinbase), mSOL (Marinade on Solana). Risk: LST prices can depeg from the underlying asset during market stress.
Example
Stake 1 ETH with Lido → receive 1 stETH → use stETH as collateral on Aave to borrow USDC → now you're earning staking yield AND using your capital.
Related Terms
Last updated: 2026-03-21
