What Is the Concept of 'Liquid Staking' and Its Associated Risks? ▴ Learn

What Is the Concept of ‘Liquid Staking’ and Its Associated Risks?

Liquid staking allows users to stake their cryptocurrency while simultaneously receiving a liquid, tradeable token representing their staked position. This token can be used in DeFi applications, maintaining liquidity.

The risks include smart contract vulnerability, the risk of the liquid token losing its peg to the underlying staked asset, and centralization risk if one liquid staking protocol becomes dominant.

What Is the Difference between Solo Staking and Liquid Staking?

How Does Liquid Staking Provide Flexibility to Stakers?

What Is “Liquid Staking” and How Does It Affect Token Utility?

Explain the Concept of “Pegging” a Limit Order to the Best Bid or Offer