Introduction
Imagine buying an investment package in traditional finance and earning an “X” amount of profits on maturity. What about another option to go for the same package with the same terms and conditions and maturity but with additional benefits of getting other assets to use for financial market participation while you wait for investment maturity? The average individual will go for the second option. This is how staking and liquid staking compares. Liquid staking is an improved version of normal staking where users get additional derivative tokens from their original stakes which they can use to participate in the DeFi market.
Liquid Staking Ensures Liquidity
The crypto market is a highly volatile, highly active and ever evolving market with continuous changing dynamics. It is prudent to stay liquid or have the opportunity to participate in the market at all times. Locking up tokens for a long period of time in an usual staking without having any liquidity over your assets is a challenge to many stakers. Liquid staking posits a better version because users will get derivative tokens which they can use to participate in the DeFi market.
Liquid Staking Improves Utility
There is also great utility for the derivative tokens users earn from liquid staking. The growth of liquid staking platforms has resulted in the creation of use cases for the derivative assets. Several DeFi platforms are now supporting stkASSETs (the derivative tokens you get from liquid staking). On pSTake for instance, you can be liquid staking ATOM and have the ability to mint stkATOM to represent your staked ATOM. Users can stake these tokens to earn rewards, they can trade these tokens, use them as collaterals to take loans in DeFi or delegate them to liquidity pools to earn more rewards. Platforms where these utilities are found include Pancakeswap, SushiSwap, Osmosis, and several others.
Liquid Staking is a Better Version of Staking
Combining these opportunities- earning usual staking rewards like you would with normal staking, and then getting derivative tokens which you can use to participate in DeFi increases the income users generate in the space, double earning opportunities. There is also no unbounding period with liquid staking. Investors can swap their liquid staked asset for native assets in some of the supported liquidity pools.
Liquid staking takes decentralization further. More and more people are always looking out for convenient, easy and profitable ways to participate in the crypto market. Liquid staking gives investors that opportunity on just one platform and encourages everyone to participate in the staking and DeFi markets thereby enhancing decentralization in the space. pStake is one of such liquid staking platforms with several users all over the world. Users have locked up millions of dollars in a variety of tokens and are enjoying a better version of staking.
Conclusion
It can be deduced from these many enlisted benefits of liquid staking that it is a better version of staking. You tend to earn more, get more liquidity in the space and get to explore the DeFi market at all times and not worry about lockups.
