Best Liquid Staking Platforms on Ethereum
Liquid staking platforms joined the bandwagon of yielding more profits after Ethereum became Ethereum 2.0. The Ethereum network transitioned when its consensus mechanism switched from proof of work (POW) to proof of stake (POS). Now, users could earn a yield on the platforms supporting liquid staking by transferring ether (ETH) to a validator in exchange for a tradeable staking token.
Products related to liquid staking have recently experienced tremendous growth. Lido and Rocket Pool, the two most well-liked liquid staking pools, are steadily gaining market share. Users can assign their assets while still owning their private keys thanks to decentralized staking pools. On the other hand, users must first move their assets to a centralized platform to use their centralized services. The annual increases in the native tokens of Lido and Rocket Pool, LDO and RPL show a rising demand for the two platforms.
Ethereum Liquid Staking
Self-staking or exchange-staking are the two types of stakes. Complexity, liquidity, and centralization are risks that are present in both. The above-mentioned issues with both self-staking and exchange staking have been resolved with the introduction of liquid staking.
Liquid staking, which enables users to effectively stake and unstake any Ethereum (ETH) amount without enabling transactions, is an alternative to locking up a user’s stake. This is possible with a tokenized version of the staked money for derivative to be used, traded, stored, and transferred.
A person would incorporate their Ethereum into a third-party program. By running its validators, this app would act as the user’s agent when depositing their ETH into the Ethereum deposit contract. The app would then issue tokens representing their ETH (such as stETH) holdings.
Users can move their ETH wherever they want by using this representative token. Moreover, they can maintain its liquidity and allow them to keep receiving rewards for staking Ethereum.
Lido aids in generating interest in the prevailing cryptocurrency across various blockchains. The Lido DAO governs the protocol, which also determines node operators, charges, and security. Users of Lido receive a liquid token, such as stETH, in exchange for staking their assets on the platform. Numerous decentralized finance (DeFi) applications support this token, which can also be staked to increase returns. Staking assets typically entails locking them up, but Lido maximizes user earning potential by permitting continued use of the liquid tokens across DeFi. Although Lido also supports Solana, Polygon, Terra, Kusama, and Polkadot, it focuses on Ethereum.
Rocket Pool is another reliable liquid Ethereum staking protocol. Users may stake on ETH2, Ethereum’s second consensus layer through Rocket Pool. The decentralized protocol is managed by a network DAO using the RPL token. The decentralized RPL token is used by a network DAO to manage the protocol. Additionally, users can run nodes to validate network transactions and stake ETH on Rocket Pool. In return, users get RPL rewards apart from 6.77% Ethereum annual staking rewards.
An open-source, streamlined staking application for Ethereum, Stakewise was first introduced in March 2021. DeFi users can use the Stakewise platform to stake any quantity of ETH tokens for network security and staking rewards. With Stakewise, you can stake ETH and get back sETH2, which you can use with other dApps on the Ethereum blockchain. The Stakewise platform allows developers to directly integrate ETH staking into their applications by using the Stakewise API and smart contracts. Over 50,000 ETH have been deposited into the Stakewise application since launch.
A public blockchain can safely house private data thanks to the Keep Network protocol. These data containers, also known as “Keeps,” let smart contracts use this data without disclosing what’s inside. Additionally, Keep Network runs a liquid staking program. After connecting with the Keep Network dApp, users can stake their own Bitcoin tokens and receive tBTC tokens on the Ethereum network as payment.
The liquid staking protocol offered by Tenderize enables users to stake their cryptocurrency holdings and earn staking rewards without locking in their deposits or actively managing their investments. Users of Tenderize can exchange tenderTokens for the underlying asset, participate in liquidity farming, and receive compounding staking rewards. The tenderToken, a 1:1 ERC-20 derivative of the underlying deposit, is what users get when they stake their crypto assets on Tenderize. These tenderTokens can be used by DeFi apps and are freely tradable on decentralized exchanges. A user receives more tenderTokens as the staking rewards on their deposit grow. Tenderize currently accepts deposits in the following formats: MATIC, GRT, LPT, and AUDIO, and during September 2022, it locked $1 million or more in total value.
Stake DAO enables users to acquire more cryptocurrencies. Users can access competitive products and marketing strategies through the non-custodial, defi platform, giving them a competitive edge. Developers can use the Stake DAO Analytics to keep track of crucial metrics.