Liquid Staking

Liquid staking is a staking method that allows you to receive an amount of tokens equal to the amount of liquidity that you have locked up in staking. In this way, you can use your crypto even while it is blocked for a certain period required by the Proof-of-Stake protocol.

The tokens one receives are ‘wrapped‘, i.e. they are derivatives of the staked currency. These tokens can usually be employed in DeFi applications, e.g. as liquidity supply to decentralised exchanges (DEX) or as collateral for cryptocurrency lending.

Liquid staking thus allows holders to use their tokens in a more flexible way, without giving up the benefits generated by staking.

Correlated words

TVL

Total amount of crypto blocked in a DeFi protocol or decentralised application (dApp).

Wrapped Token

A token representing the value of a cryptocurrency in another blockchain standard.

Bonding

A process in which cryptocurrencies are blocked as a form of commitment to obtain benefits or the right to perform certain activities in a network.

Staking Derivative

Derivatives of staking systems whose value depends on the performance of the staked native tokens and the amount of rewards issued by the network

Yield Farming

A typical feature of decentralised finance (DeFi) that allows people to put their cryptocurrencies to work for a return.

Swap

The conversion of tokens into other tokens on a decentralised exchange.

Staking

Depositing and holding cryptocurrencies on certain blockchains to obtain cryptocurrency incentives.

Smart Contract

An agreement in digital form that allows actions to be triggered automatically if certain conditions are met.

Crypto Lending

A financial service that allows lending and borrowing cryptocurrencies on a centralised or decentralised platform

ERC-20

The Ethereum token standard that has enabled hundreds of projects to launch their own cryptocurrency on Ethereum.

DEX

A Decentralised Exchange allows cryptocurrency trading without intermediaries and directly on the blockchain.

DeFi

Decentralised Finance includes all blockchain-based and decentralised financial solutions.

DApp

Decentralised application allowing the use of a blockchain-based service.

DAO

The Decentralised Autonomous Organisation is a form of automated blockchain governance.

CeFi

Centralised finance is the centralised counterpart of DeFi, but should not be confused with traditional finance.

Arbitrage

Buying and selling in different markets in order to take advantage of the disparity in prices.

APY

A metric often used in DeFi, it indicates the percentage return per year you receive on an investment or loan.

APR

The annual percentage rate you receive for an investment or loan.

AMM

Automated Market Makers are smart contracts adopted by decentralised exchanges to automatically execute orders.

Aggregator

An online collector of similar content or services from different sources for easy access. An example is Yearn Finance