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How Does ‘Liquid Staking’ Derivatives Impact the Capital Efficiency of Staked Cryptocurrency?

LSDs provide a tradable token for staked assets, allowing capital to earn staking rewards and be used in DeFi simultaneously.
Greeks.Live19.11.25

How Does ‘Liquid Staking’ Derivatives Impact the Capital Efficiency of Staked Cryptocurrency?

Liquid Staking derivatives (LSDs) significantly increase capital efficiency by allowing stakers to receive a tradable token representing their staked crypto plus accrued rewards. This derivative token can then be used in other decentralized finance (DeFi) protocols, such as collateral for loans or liquidity provision.

This allows the staker to earn staking rewards while simultaneously utilizing the underlying capital for other yield-generating activities.

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