Liquid Staking is an alternative to traditional staking that allows you to do more with assets you stake.
It is a revolutionary way of staking assets that makes it possible for you to use your staked assets in other ways even when they are still staked. Liquid staking platforms allow you to mint derivative tokens after you stake your assets.
These derivative tokens can be used to earn yields on other platforms or even as collateral for crypto loans while retaining ownership of the original staked assets. That way, your staked assets remain liquid and you can use them in other ways.
There are several liquid staking platforms to use, both centralized and decentralized. The decentralized ones allow you to retain custody of your assets, while the centralized ones take control of funds on your behalf.
If you’re thinking of engaging in liquid staking, the following are the best platforms you should think about using.
Lido
Lido is a leading multi-chain liquid staking platform where you can stake Ethereum and Polygon. Though decentralized, it provides a highly efficient ecosystem that users find appealing.
Its biggest strength is the vast liquidity pool that makes it possible to easily convert assets without slippage. The platform has $13.9 billion in value staked, which accounts for the vast liquidity.
When you stake on Lido,you get staking derivatives stETH for Ethereum and stMATIC for Polygon. The liquid tokens represent your staked assets but also accumulate rewards, with rates of 3.4% APR for Ethereum and 4.2% APR for Polygon.
They can also be easily integrated into various DeFi applications, allowing you to compound your staking rewards further.
Rocket Pool
Rocket Pool is a decentralized and permissionless liquid staking platform that is becoming a major favorite of liquid stakers. The platform’s strength is that it is inclusive, meaning anyone with as little as 0.01 ETH can join as a node operator.
You can only stake ETH on the platform, and you’ll receive rETH. This is the liquid staking derivative that represents your staked ETH and accumulates rewards.
You can also go on to use it on other DeFi protocols as it can be easily integrated with DeFi applications. You can earn approximately 6.97% APR by staking ETH on the platform and you’ll be entitled to another additional RPL rewards.
Frax Ether
Frax Ether is an interesting liquid staking platform because of its approach to staking. It is a specialized system that smoothly integrates the stablecoin and yield components into the Ethereum staking process.
It combines a stablecoin mechanism with high-yield opportunities to maximize yields for its users. There are three primary elements that the platform revolves around. These are Frax Ether (frxETH), Staked Frax Ether (sfrxETH), and the Frax ETH Minter.
frxETH functions as a stablecoin loosely pegged to ETH, while sfrxETH represents the yield-generating version of frxETH. You become eligible for when you exchange frxETH for sfrxETH. You can later convert it back to frxETH later. The platform offers about 3.83% APR for sfrxETH.
Coinbase Ethereum
This platform has high credibility, thanks to the backing from Coinbase. It allows you to easily convert their staked ETH into cbETH without any fees. You can also enjoy trading the derivative token on Coinbase or decentralized platforms like Uniswap and Curve.
One thing the platform is known for is its high security due to top-notch encryption sponsored by Coinbase. cbETH is also easy to integrate with DeFi applications and use for other things.
Stader
Last and not the least is Stader, which is a multi-chain staking platform indeed. Supporting Ethereum, Polygon, Hedera, BNB, Fantom, Near, and Terra 2.0, this platform offers more variety than any other on this list.
You can stake tokens of all the supported networks and receive liquid equivalents for use elsewhere on 40 support DeFi protocols.
Offering an APR of 3.67%for Etherem and 4.68% for Polygon, this platform is supported by top companies in the industry, making it a trustworthy one as well.
