1/7 Today, we're going to take a deep dive into Liquid Staking. 👂Have you heard of it?
🧐Liquid Staking is a technique that allows users to obtain liquidity while participating in the #staking process of #cryptocurrencies.
Follow this thread to learn more! 🧵👇
🧐Liquid Staking is a technique that allows users to obtain liquidity while participating in the #staking process of #cryptocurrencies.
Follow this thread to learn more! 🧵👇
2/7 Traditionally, staking requires users to 🔒lock up their funds in a staking network for a set period.
#liquidstaking, on the other hand, allows users to obtain fungible tokens 🔐that represent their staked funds, which can be traded on the market.
#liquidstaking, on the other hand, allows users to obtain fungible tokens 🔐that represent their staked funds, which can be traded on the market.
3/7 By depositing 📥their staked tokens in a custodial vault, users receive a 🪙fungible token that can be 🔁 traded on cryptocurrency exchanges or used as collateral for loans or other financial transactions.
4/7 Liquid staking helps address one of the key issues with #staking, which is the 📦lack of liquidity of the locked-up funds during the staking period.
5/7 However, it's important to note that liquid staking also carries risks, 🚨such as the possibility of losing staked tokens if the custodial vault is 🕵️hacked or compromised in some way.
6/7 Therefore, it's important to thoroughly 🧐research any platform or provider of liquid staking before depositing funds.
7/7 In summary, #liquidstaking provides users with greater flexibility in utilizing their staked funds while 👩👧👦participating in the staking process of cryptocurrencies.
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