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Liquid Staking Protocol
staking method
Yield-Earning Staking Without Lockup ÔÇö Liquid Staking Protocol
A liquid staking protocol allows users to stake their native tokens and receive a transferable ÔÇ£receipt tokenÔÇØ in return ÔÇö one that continues to earn staking rewards while remaining usable across DeFi. Unlike traditional staking where assets are locked, liquid staking gives users flexibility, liquidity, and composability without sacrificing yield.
Use Case: “Liquid staking lets users earn staking rewards while still accessing their funds to use in lending, trading, or liquidity pools.”
Key Concepts: Staking Rewards, Receipt Token, Liquidity, Unbonding Period, DeFi Integration
Example Workflow:
- User stakes 1,000 $FLR via a liquid staking platform like Sceptre
- User receives 1,000 $sFLR (initially 1:1, later floats as rewards are added)
- $sFLR can be traded, used in lending, or paired in liquidity pools
- User eventually burns $sFLR to reclaim their original $FLR plus accumulated rewards (minus protocol fees)
Why It Matters:
- Combines staking rewards with DeFi freedom
- Improves capital efficiency for long-term holders
- Supports protocols that separate yield from asset control