What Are 'Liquid Staking Derivatives' (LSDs) and How Do They Impact PoS Network Security? ▴ Learn

What Are ‘Liquid Staking Derivatives’ (LSDs) and How Do They Impact PoS Network Security?

Liquid staking derivatives (LSDs) are tokens representing staked cryptocurrency, allowing users to earn staking rewards while keeping their capital liquid and usable in DeFi. They impact security by concentrating staking power into a few major LSD protocols, increasing the risk of a single point of failure.

If one LSD provider gains a supermajority of staked capital, they could potentially launch an attack, or be a target for regulatory capture.

Do Exchanges and Staking Pools Contribute to Centralization in PoS?

How Is the Concept of Staking Related to Financial Derivatives like Futures?

What Are the Potential Centralization Risks Associated with Using Developer-Set Checkpoints?

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