Best Liquid Staking Platforms

Summary: Liquid staking platforms offer a convenient way to earn rewards from your digital assets. They allow you to stake assets and simultaneously utilize them for other purposes. For instance, users can amplify their rewards if they reinvest those assets into other yield-producing platforms like AAVE or Compound. Our experts have reviewed various platforms and compiled a list of the top 5 liquid staking options for you.

Each platform is distinguished by its user base, total value locked (TVL), economic reliability, smart contract security, and the returns it offers on staked assets. Explore these top choices to effectively stake your assets and enhance your earnings:

1. Lido: Best Overall Liquid Staking Platform
2. Rocket Pool: Top Ethereum Alternative
3. Frax Ether: Highest Yields for Ethereum
4. Coinbase ETH (cbETH): Leading Centralized Platform
5. Stader: Premier Multi-Chain Liquid Staking Platform

Top Liquid Staking Platforms 

In our thorough examination of over 20 centralized and decentralized finance solutions, our goal was to pinpoint the leading liquid staking platforms that offer the most to our readers. We focused on assessing variables like staking returns, security protocols, ease of use, and market liquidity. As a result, we selected five exceptional platforms that excel in delivering substantial staking rewards and serve as key resources for savvy investors navigating the dynamic DeFi environment.

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1. Lido

Lido has established itself as a leading choice in the liquid staking market by offering a decentralized and efficient staking ecosystem. One of Lido's significant advantages is its extensive liquidity pool, which, holding over $30 billion, enables asset conversion to be incredibly smooth, even eliminating slippage.

When you stake on Lido, you receive liquid staking derivatives, specifically stETH for Ethereum and stMATIC for Polygon. These tokens represent your staked assets and generate rewards, with current rates at 3.4% APR for Ethereum and 4.2% APR for Polygon. Additionally, stETH and stMATIC can be seamlessly used across various DeFi platforms, enhancing your ability to grow staking rewards.

• Supported Networks: Ethereum, Polygon (Note: Solana support ceased as of October 16th, 2023).
• Current Yields: 3.2% APR for Ethereum, 4.2% APR for Polygon.
• Total Value Locked (TVL): Over $30 billion on Ethereum and $78 million on Polygon.
• Liquid Staking Derivatives: stETH for Ethereum, stMATIC for Polygon.

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2. Rocket Pool

Rocket Pool has emerged as a formidable player in the liquid staking scene, recognized particularly for its decentralized and open-access network. A key feature of Rocket Pool is its inclusivity, allowing anyone to become a node operator with a minimal starting stake of just 0.01 ETH. This level of accessibility benefits smaller investors and broadens the validator set contributing to the security of their staking token.

Staking at Rocket Pool grants users rETH, a liquid staking derivative that symbolizes their staked ETH and accrues rewards. The platform currently boasts a robust APR of around 6.97% for Ethereum, enhanced further by additional RPL rewards, offering a competitive yield to its users.

• Supported Networks: Ethereum only.
• Current Yields: Roughly 6.97% APR for Ethereum, plus extra RPL rewards.
• Total Value Locked (TVL): 823,328 ETH staked by 3,288 node operators.
• Liquid Staking Derivatives: rETH for Ethereum.

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3. Frax Ether

Frax Ether is a favored option for those immersed in the DeFi community, offering a seamless integration of stablecoin and yield-generating elements within the Ethereum staking framework. As part of the Frax Finance ecosystem, Frax Ether introduces an innovative staking model that merges the stability of a stablecoin with the potential for high returns.

Central to the Frax Ether system are three components: Frax Ether (frxETH), Staked Frax Ether (sfrxETH), and the Frax ETH Minter. frxETH acts as a stablecoin with a loose peg to ETH, while sfrxETH is the yield-accumulating counterpart of frxETH. Converting frxETH to sfrxETH allows users to tap into staking yields, which can be accessed again by switching sfrxETH back to frxETH.

• Supported Networks: Ethereum only.
• Current Yields: Approximately 3.83% APR for sfrxETH.
• Total Value Locked (TVL): $435.68 million.
• Liquid Staking Derivatives: frxETH and sfrxETH for Ethereum.

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4. Coinbase Ethereum (cbETH)

Coinbase ETH (cbETH) provides a reliable and straightforward option for Ethereum staking, backed by the trusted name of Coinbase, a publicly traded, audited cryptocurrency exchange. Users can convert staked ETH to cbETH seamlessly and without fees, enjoying the freedom to trade on Coinbase or decentralized platforms such as Uniswap and Curve. Prioritizing security, Coinbase works with reputable validators and employs robust encryption to protect user assets.

Beyond its strong security, cbETH is designed for easy integration with various DeFi applications, enhancing its utility and appeal. This compatibility aims to attract a wider user base and spur growth in the DeFi ecosystem. With a Total Value Locked (TVL) of $580 million, cbETH taps into Coinbase’s reputation and offers a profitable and secure staking solution, ideal for users who value reliability from a recognized industry player.

• Supported Networks: Ethereum only.
• Current Yields: Based on Ethereum protocol rates, with Coinbase distributing these rewards minus a commission.
• Total Value Locked (TVL): $580 million.
• Liquid Staking Derivatives: cbETH for Ethereum.

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5. Stader

Concluding our top 5 staking platforms is Stader, a multi-chain liquid staking provider. Servicing over 85,000 users with $124 million in assets under management, Stader furnishes a secure, audited setting and has distributed over $25 million in rewards. Tokens staked through Stader are transformed into liquid derivatives, accepted across more than 40 DeFi protocols, enhancing your freedom to earn further rewards while retaining liquidity.

Stader stands out for its support of various blockchains, allowing for diverse investment opportunities. From Ethereum's 3.67% annual yield to Polygon's 4.68%, it provides options to expand your staking activities. Its liquid staking model ensures your assets remain fluid, benefitting from auto-compounded returns. Supported by prominent investors like Pantera Capital and Coinbase Ventures, Stader solidifies its reputation as a reliable and diverse staking option.

• Supported Networks: Ethereum, Polygon, Hedera, BNB, Fantom, Near, Terra 2.0.
• Current Yields: Vary by network (e.g., Ethereum: 3.67%, Matic: 4.68%, BNB: 2.23%).
• Total Value Locked (TVL): $124 million.
• Liquid Staking Derivatives: Various including ETHx, BNBx, HBARx, FTMx.

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Are Liquid Staking Protocols Safe?

The safety of liquid staking platforms can vary significantly, largely dependent on the rigor of security audits conducted on their smart contracts. In-depth audits by esteemed organizations like STATEMIND or ConsenSys Diligence can identify potential vulnerabilities and enhance confidence in the platform's security practices. Additionally, the Total Value Locked (TVL) in a platform can act as a practical test of its security robustness.

Lido Finance, for instance, has the highest TVL among such platforms, suggesting a high degree of trust and economic security within the cryptocurrency community. A high TVL is often indicative of resilience against security breaches and strong community confidence, serving as an important indicator when evaluating the safety of a staking platform.

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What is Liquid Staking?

Liquid staking is a method in the proof-of-stake blockchain system where users stake their cryptocurrency tokens to receive a tradable asset, such as a liquid staking token (LST). Unlike traditional staking that locks tokens until they are unstaked, liquid staking allows users to access the value of their staked assets for use in decentralized finance (DeFi) applications and other web3 protocols.

For instance, after staking ether, users may receive a liquid staking derivative like stETH, enabling them to participate in DeFi while still earning staking rewards. This approach offers flexibility by connecting traditional staking benefits with DeFi opportunities, though it does come with potential risks such as smart contract vulnerabilities and reduced governance rights.

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Bottom Line

In conclusion, liquid staking platforms offer a valuable solution to the traditional constraints of cryptocurrency staking, allowing stakeholders to participate in network security while maintaining liquidity to engage in decentralized finance (DeFi) applications. When selecting a platform, consider security measures, total value locked (TVL), and the array of supported networks to align with your financial strategies.

Popular platforms like Lido and Rocket Pool illustrate the importance of robust security audits and substantial TVL in fostering confidence and ensuring a secure staking environment within the dynamic cryptocurrency landscape.