Liquid Staking: How It Lets You Earn Crypto Without Locking Up Your Assets

When you stake crypto like Ethereum, a blockchain network that uses Proof of Stake to validate transactions and secure the network, you lock your coins to help run the system—and earn rewards for it. But what if you could earn those rewards and still use your coins to trade, lend, or invest elsewhere? That’s where liquid staking, a system that issues tradable tokens representing your staked assets comes in. It turns locked-up crypto into something flexible, like turning a savings bond into a debit card that still earns interest.

Liquid staking works by letting you deposit your coins into a smart contract. In return, you get a token—like stETH for Ethereum or cbETH for Coinbase’s version—that mirrors the value of what you staked. You can send that token to a DeFi, a system of open financial apps built on blockchains that replace banks with code protocol to earn more yield, use it as collateral for a loan, or trade it on an exchange. Your original coins stay locked, but your liquidity doesn’t. This solves a big problem in Proof of Stake, the energy-efficient way blockchains confirm transactions by locking up coins instead of mining: the trade-off between earning rewards and staying active in the market.

It’s not magic. There are risks. If the staking service gets hacked or the token’s value drops, you lose. Some liquid staking tokens trade at a discount because of market uncertainty. But for millions, it’s become the default way to stake—especially on Ethereum after its upgrade. You don’t need to be a tech expert. You just need to understand that your coins are still working for you, even when they’re not sitting idle.

Below, you’ll find real guides and breakdowns on how liquid staking fits into DeFi, what platforms actually deliver, and which ones to avoid. No fluff. No hype. Just what works—and what doesn’t—in 2025.