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What is liquid staking?
Liquid staking is staking through a service that gives you a token representing your staked coins and their rewards. You can hold, trade or use that token while the original coins stay staked. The token is a claim on the stake, not the stake itself.
What it means for you
The token can trade below the value of the coins backing it, so selling it quickly may cost you. Its value also depends on the service's smart contracts, its operators and rule changes you may not vote on, and validator penalties are usually shared by all holders. Check how redemption works and how long it takes.
A common mistake: “Holding a liquid staking token is the same as staking.”
In fact: ethereum.org notes it is not: you hold a claim on a service that stakes for you. Its value depends on that service's contracts, operators and governance, and on the market price if you sell instead of redeeming.
How it works
Running an Ethereum validator takes 32 ETH, so pooled services accept deposits of any size, run validators through node operators, and give you a liquid staking token. Some tokens rebase, raising your balance as rewards arrive; others keep your balance fixed while each token becomes redeemable for more ETH over time. Rewards are paid minus the operator's fee, and slashing losses are shared across holders. To exit, you redeem through the protocol or sell the token on a market, where it can trade below its backing.
Source: ethereum.org: Pooled staking · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.