Most individuals know staking..lock up your SOL, earn yield. However what if I advised you there’s a option to stake AND nonetheless use your belongings in DeFi on the similar time? That’s the place liquid staking is available in.
As a substitute of locking up your SOL and letting it gather mud, liquid staking allows you to stake whereas receiving a token (like vSOL, JitoSOL, mSOL, and many others.) that you need to use throughout DeFi.
💡 The way it works:1️⃣ You deposit SOL right into a liquid staking protocol.2️⃣ You get again a liquid staking token (LST) that represents your staked SOL + rewards.3️⃣ Now you can take that LST and use it in DeFi. Present liquidity, borrow towards it, loop it, or farm extra yield.
🚀 Why it’s a recreation changer:
Enhance your yield – As a substitute of simply incomes staking rewards, you’ll be able to earn a number of layers of yield through the use of your LST in DeFi.
Keep liquid – No want to attend for unstaking durations. If you wish to exit, simply swap your LST for SOL anytime.
Extra composability – Think about staking SOL and nonetheless utilizing it as collateral for a mortgage, offering liquidity, and even restaking in new alternatives.
🔗 Instance: Let’s say you stake SOL for vSOL. Now, as a substitute of simply incomes ~8% APY from staking, you’ll be able to take your vSOL and use it in lending, liquidity swimming pools, or farms to stack much more rewards.
Because of this LSTs have gotten a core a part of yield-maximizing methods in Solana DeFi.
Are you utilizing liquid staking but? If that’s the case, what’s your favourite LST and technique? Drop your ideas beneath! ⬇️🔥
