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How to Enjoy the Benefits of Staking without Locking Your Capital?

How to Enjoy the Benefits of Staking without Locking Your Capital?

2 min read

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With Liquid Staking, users can earn staking rewards without locking away their capital.

Liquid staking is a relatively new concept in the world of blockchain technology and cryptocurrency. It is a way of enabling users to stake their tokens or coins in a flexible and liquid manner, allowing them to earn rewards while still being able to use and trade their tokens.

In this article, we will explore how liquid staking strengthens the web3 ecosystem and how it can benefit both users and blockchain projects.

What is liquid staking?

In traditional staking, users are required to lock up their tokens for a certain period of time in order to participate in the consensus process of a blockchain network and earn rewards. This can be a barrier for many users, as they are unable to use or trade their tokens while they are locked up.

Liquid staking allows users to stake their tokens in a more flexible way, allowing them to earn rewards while still being able to use and trade their tokens as needed.

How does liquid staking strengthen the web3 ecosystem?

There are several ways in which liquid staking can strengthen the web3 ecosystem.

First, it can increase participation in the consensus process of a blockchain network. By allowing users to stake their tokens in a more flexible way, more users may be willing to participate in staking, leading to a more decentralised and secure network.

Second, liquid staking increases the liquidity of tokens and make them more attractive to investors. When tokens are locked up in traditional staking, they are not available for trade, which can decrease their liquidity and make them less attractive to investors. With liquid staking, tokens can be staked and traded, increasing their liquidity and making them more attractive to investors.

Third, liquid staking can help to align the incentives of users and blockchain projects. With traditional staking, the incentives of users and projects are not always aligned, as users are unable to sell their tokens while they are locked up, while projects may have different goals and priorities. With liquid staking, users can earn rewards while still being able to sell their tokens if needed, aligning the incentives of users and projects.

Fourth, liquid staking can help to increase the adoption of blockchain technology and cryptocurrency. By making it easier for users to earn rewards and participate in the consensus process of a blockchain network, liquid staking can help to increase the adoption of these technologies and make them more accessible to a wider audience.

Overall, liquid staking can strengthen the web3 ecosystem by increasing participation in the consensus process, increasing the liquidity of tokens, aligning the incentives of users and projects, and increasing the adoption of blockchain technology and cryptocurrency. It is an important development in the world of blockchain and cryptocurrency and has the potential to greatly benefit both users and projects.

What Does Stader Bring to the Table?

The BNB ecosystem has the fastest growth rate in liquid staking. We at Stader ourselves provide 7 different ways to utilize the benefits of liquid staking in DeFi.

The system around Liquid Staking is a two-fold one:

  1. Earn rewards from staking.
  2. Invest the liquid token in DeFi to earn even more yields

A combination of these two generally presents a yield estimate that is much higher than average Staking yields.

For example, users can currently earn 10-30% DeFi yields by deploying BNBx (Stader’s liquid token representing staked BNB) across pools in DEXs or lending/leveraged yield farming strategies.

You can learn about all the different DeFi strategies to use with liquid staking here.

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