# Liquid Staking

> Staking your coins through a service that gives you a tradable token in return.

Canonical URL: https://business.fudfomo.co/glossary/liquid-staking
Source: What The Block! Dictionary v1.0 (last updated 2026-04-25), browsable at https://wtb.fudfomo.co.

## Definition

Liquid staking lets you stake a proof-of-stake coin like ETH while still holding something you can sell or use elsewhere. You deposit the coin with a service or smart contract, and in return you receive a derivative token that represents your stake plus accrued rewards.

The derivative can be traded, used as collateral, or supplied to other DeFi apps. The trade-offs are smart contract risk and the chance that the derivative token slips below the price of the underlying.

## Related terms

- [Staking](https://business.fudfomo.co/glossary/staking): Locking up your crypto to help run a blockchain. In return, you earn rewards, similar to interest.
- [Restaking](https://business.fudfomo.co/glossary/restaking): Reusing already-staked coins as security for additional services, usually for extra yield.
- [Validator](https://business.fudfomo.co/glossary/validator): A participant in a proof-of-stake network who proposes and confirms new blocks. Earns rewards and can be slashed.
- [DeFi](https://business.fudfomo.co/glossary/defi): Decentralised finance. Apps that offer lending, trading, and saving on a blockchain instead of through a bank.

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