Liquid Staking
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In Brief
Liquid staking lets you stake crypto to earn rewards while receiving a tradable token that represents your staked position — so your capital stays usable in DeFi instead of being locked up.
What Is Liquid Staking?
Liquid staking is a method that lets you stake your crypto to earn staking rewards while keeping your capital liquid. When you stake through a liquid staking protocol, you receive a liquid staking token (LST) that represents your staked assets plus accruing rewards. You can hold, trade, or use that token in DeFi — instead of having your funds locked and idle.
This solves a key limitation of traditional staking, where staked assets are locked up and can't be used elsewhere. Liquid staking is one of the fastest-growing areas of DeFi.
How Does Liquid Staking Work?
You deposit a stakeable asset (e.g. ETH) into a liquid staking protocol.
The protocol stakes it on your behalf to earn rewards.
You receive a liquid staking token (e.g. an stETH-style token) representing your position.
Your LST accrues staking rewards over time.
You can use the LST across DeFi — as collateral, in liquidity pools, etc. — or redeem it for the underlying asset.
Traditional Staking vs Liquid Staking
| Feature | Traditional Staking | Liquid Staking |
|---|---|---|
| Liquidity | Locked | Liquid (via LST) |
| Earn rewards | Yes | Yes |
| Use in DeFi | No | Yes |
| Flexibility | Lower | Higher |
What Are LSTs and LRTs?
LST (Liquid Staking Token) — represents staked assets plus rewards, usable in DeFi.
LRT (Liquid Restaking Token) — represents assets that are restaked to secure additional protocols for extra yield.
The LST/LRT ecosystem has expanded rapidly as users seek to maximize capital efficiency.
Benefits and Risks
Benefits: earn staking rewards without locking up capital, unlock additional DeFi yield, and improve flexibility.
Risks: smart contract vulnerabilities, the LST potentially trading below ("de-pegging" from) the underlying asset, and added complexity from layering DeFi strategies. As always, understand a protocol before depositing.
Liquid Staking and Trust Wallet
Trust Wallet lets you stake supported assets to earn rewards directly in the app, and connect to DeFi protocols through its dApp browser and WalletConnect to explore options like liquid staking. As a non-custodial wallet across 100+ blockchains, your staked assets and any liquid staking tokens remain under your control via your own private keys.