Staking Derivative

Staking derivatives are secondary assets typical of some staking systems in which rewards are not earned with native tokens but through derivative products. In these systems, you receive the corresponding amount of tokens you had locked. For example, if you deposit 32 ETH in a derivative staking protocol, you receive 32 stETH and the staking rewards are paid in stETH. These represent the tokens being staked and the rewards that have been accrued during the staking period.

The value of the staking derivatives depends on the total amount of rewards that are distributed in the network and the performance of the primary underlying asset. They are tradable assets to all effects therefore they can be bought also from someone who does not have the real underlying tokens in staking.

Correlated words

Liquid Staking

Liquid Staking allows the staked assets to be simultaneously utilised in other protocols, maintaining liquidity while earning rewards.

TVL

TVL (Total Value Locked) represents the cumulative value of cryptocurrencies locked in a DeFi protocol or decentralised application (dApp).

Wrapped Token

A Wrapped Token represents the value of one crypto on a different blockchain standard, facilitating cross-chain transactions and usage.

Bonding

Bonding is the process of locking up cryptocurrencies as a commitment to participate in network activities and receive benefits.

Yield Farming

Yield Farming, an essential aspect of decentralised finance (DeFi), allows cryptocurrencies to be used to earn interest.

Swap

Swap is the exchange of one crypto token for another via a decentralised platform, enabling seamless asset conversion.

Staking

Staking involves holding cryptocurrencies in a digital wallet to support network operations and earning rewards for participation.

Smart Contract

A Smart Contract is a digital contract with terms automatically executed by the blockchain when predetermined conditions are met.

Crypto Lending

Crypto Lending involves providing loan services using cryptocurrencies on centralized or decentralised platforms.

ERC-20

ERC-20 is a token standard on Ethereum, allowing many projects to create and launch their own cryptocurrencies on its platform.

DEX

A Decentralized Exchange (DEX) facilitates cryptocurrency trading without intermediaries, directly utilising blockchain technology.

DeFi

Decentralised Finance (DeFi) comprises financial solutions based on blockchain technology, operating in a decentralised manner.

DApp

DApp, or Decentralised Application, allows users to interact with blockchain-based services in a distributed network environment.

DAO

A Decentralised Autonomous Organisation (DAO) operates on blockchain principles, automating governance and decision-making.

CeFi

CeFi, or Centralised Finance, is the centralised alternative to DeFi, offering traditional finance-like services on blockchain.

Arbitrage

Arbitrage is the simultaneous buying and selling of assets in different markets to profit from price disparities.

APY

APY (Annual Percentage Yield) in DeFi indicates the annual percentage return earned or paid on an investment or loan.

APR

The Annual Percentage Rate (APR) is the yearly interest rate earned on an investment or charged on a loan, expressed as a percentage.

AMM

Automated Market Makers (AMMs) are smart contracts in decentralized exchanges, facilitating liquidity and trade execution.

Aggregator

An Aggregator collects and presents similar content or services from various sources, exemplified by platforms like Yearn Finance.