Adaora Anders
4 min readApr 3, 2022

Liquid Staking: A Great Way to Put Your Crypto Asset to Work and Earn

The crypto space is wide and wild as lots of users attempt to leverage the opportunities there. While the vast majority of users focus on crypto trading due to its quick returns, crypto staking has become just as popular thanks to the rise of POS blockchains.

Liquid staking, a unique approach to crypto staking that incentivizes those staking on POS chains, offers a passive income stream for those looking to put their crypto assets to work.

Before we jump into the intricacies of liquid staking, an understanding of the concept is important.

What Is Liquid Staking?

Staking on Proof of Stake (POS) blockchains entails locking up cryptos to propagate the unique consensus mechanism of these public chains. This explains why popular blockchains like the Ethereum Network are moving towards a POS consensus, away from the energy-gobbling Proof of Work (POW) option.

Though staking on POS chains comes with enticing incentives, crypto-assets are locked for a duration that varies with the blockchain. Once your cryptos have been staked, they can’t be sold or transferred until the lockup phase is over. What this means is that stakers can’t access their liquidity until the assets are unstaked. The unstaking period is often lengthy due to the security of the blockchain being on the line.

Liquid staking offers a ‘get out of jail’ solution for anyone staking cryptos on POS chains. By using a liquid staking solution, access to liquidity whenever the need arises is always on the cards.

With liquid staking, your assets continue to earn rewards from staking on the public chain, but you get staking derivatives from the vendor. These staking derivatives can be traded in full or part to recoup your asset. Once you sell off, you lose the right to the staked asset. While liquid staking provides a window of access to liquidity when you need it, there’s no eating your cake and having it with this service.

Liquid staking is great for easy and quick access to liquidity — zero BS. This makes it desirable in a crypto space where users are seeking ways to earn passive income.

The Best Liquid Staking Platforms

With the growing popularity of liquid staking, many platforms have risen to fill the void of rendering the service. Yet, you want to use the right platform to avoid losing your cryptos. Here are some of the best liquid staking platforms:

  • Staking Finance Protocol (StaFi)

StaFi is one of the pioneers in the liquid staking space, which says a lot about their intentions. The DeFi protocol brought interest in liquid staking, resulting in more platforms plying their trade in this space.

Staking Finance has a dedicated chain, decentralized exchange, and a soon-to-launch hub for an ambitious liquid staking service. On the platform, users can stake several supported cryptos such as ETH, BNB, NEAR, DOT, ATOM, and others.

Once you stake any of these assets on StaFi, you’re issued a staking derivative, rtoken. Previously, trading the rtoken was limited to the supported DEXs on the public chains covered. However, that has changed with the launch of the rDEX, a decentralized exchange for trading rtokens.

Fees on StaFi are relatively cheaper than the competition. The liquid staking platform ensures the service is affordable, so users are attracted to liquid stake on StaFi.

Perhaps the strongest suit of this liquid staking platform is its desire for rtokens that are more than mere receipts of assets staked. If the staking derivatives acquire more uses beyond trading for other assets, then users can have multiple income streams from their staked crypto. StaFi has shown this is possible from the numerous liquidity mining opportunities available to rToken holders.

  • Centralized Exchanges

Liquid staking can also be done on centralized exchanges like Kucoin, Binance, and others. On these crypto exchanges, you can do a lot more than trade cryptocurrencies. There are liquid staking solutions for a wide array of assets on these platforms. But the centralized activities of these exchanges can pose a challenge. Rewards are shared with the exchange, so remember that when using these exchanges for liquid staking.

The Risks of Liquid Staking

One of the reasons why you have to be wary of the liquid staking platform used is the inherent risks involved. When you liquid stake, you entrust your asset to be staked to the liquid staking platform. If the third-party platform has nefarious intentions, you might never get your asset back.

To mitigate these risks, you should only liquid stake on trusted platforms like StaFi. Ensure you do some due diligence on the credibility of the liquid staking platform, so you are not confidently handing your assets to unscrupulous entities.

Before you liquid stake on any platform, confirm the fee structure in place. Some platforms charge a whopping 10%, which can put a hole in whatever rewards earned from staking.

There’s also the need to scrutinize the security arrangement of the liquid staking platform. While some of these vendors might have good intentions, their porous security setup might result in the loss of user funds. Interestingly, StaFi is one of the few that has put in measures to protect the assets of stakers.


Liquid staking remains one of the best ways to earn passive income on your cryptos. The catch is you have to do it right — pick the right platform, note the risk, and reap your reward.

You can learn more about StaFi Protocol by visiting the websites below:



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