DeFi 1 min read
Staking
Also known as: Proof of Stake, Liquid Staking
Locking up tokens to help secure a Proof-of-Stake network, earning rewards in return.
Solo vs liquid staking
| Type | Pros | Cons |
|---|---|---|
| Solo (32 ETH validator) | Max yield, full decentralization | Capital lockup, operational risk |
| Pooled (Lido, Rocket Pool) | Any amount, liquid receipt token | Trust / protocol risk, centralization concerns |
| Exchange-based (Binance, Coinbase) | Easy, zero setup | Custodial, lowest yield |
Key concepts
- Rewards — protocol-level emissions + priority fees + MEV.
- Slashing — penalty for malicious or sloppy validators (offline, double-signing).
- Unstaking queue — on Ethereum, exit takes variable days depending on queue depth.
- Liquid staking tokens (LST) — stETH, rETH. Usable in DeFi while «staked».
Why it matters for price
- Staked supply reduces circulating supply.
- LSTs unlock composability and collateral use of staked capital.
- Post-Shanghai, Ethereum yield is the new «risk-free rate» of on-chain DeFi.