Ethereum Liquid Staking: A Guide for Beginners
Liquid staking on Ethereum is designed for holders who can't meet the 32-ETH staking requirement.
Staking rewards are available, but coins stay locked. Liquid staking protocols allow smaller holders to participate by pooling deposits and creating a liquid staking token (LST).
The process works as follows: deposit ETH into a protocol, receive an LST that represents the staked ETH plus its rewards, and use the LST in DeFi or trade it.
Liquid staking tokens can be rebasing or exchange-rate based. Rebasing tokens like stETH increase your balance with each reward, while exchange-rate tokens like rETH maintain a fixed value but redeem for more ETH over time.