Summary: Liquid staking platforms let you earn rewards by staking your digital assets, but unlike traditional staking, you can still use those assets for other things simultaneously. Users can earn extra rewards by re-depositing those assets in another yield-bearing platform like AAVE or Compound. To help you pick the best platforms for this, our experts have reviewed and made a list of the top 5 liquid staking platforms.
Each platform stands out for its users, total value locked (TVL) and economic trust, smart contract security and returns on staked assets. Dive into these premier choices to effectively stake and boost your earnings:
Top Liquid Staking Platforms
In our journey to identify the leading liquid staking platforms, we've evaluated over 20 CeFi and DeFi solutions. With a commitment to benefit our readers, we assessed factors such as staking returns, security measures, user-friendly staking procedures, and market liquidity. Consequently, we've shortlisted five exceptional platforms. Each of these shines in providing significant staking rewards and stands as a pivotal tool for astute investors in the evolving DeFi landscape.
Lido has positioned itself as a premier choice among liquid staking platforms, delivering a decentralized yet highly efficient staking ecosystem for users. One of Lido's core strengths lies in its vast liquidity pool, with a notable amount of more than $13.9 billion staked, making asset conversion remarkably smooth and with no slippage.
Staking on Lido offers users liquid staking derivatives in the form of stETH for Ethereum and stMATIC for Polygon. These liquid tokens not only represent your staked assets but also accumulate rewards, with rates of 3.4% APR for Ethereum and 4.2% APR for Polygon. The stTokens, stETH and stMATIC, can be easily integrated into various DeFi applications, allowing you to compound your staking rewards further.
- Supported Networks: Ethereum, Polygon (Note: Solana support terminated as of October 16th, 2023).
- Current Yields: 3.4% APR for Ethereum and 4.2% APR for Polygon.
- Total Value Locked (TVL): $14,032,966,115 ($13,954,699,115 for Ethereum and $78,267,000 for Polygon).
- Liquid Staking Derivatives: stETH for Ethereum and stMATIC for Polygon.
2. Rocket Pool
Rocket Pool has established itself as a strong contender in the liquid staking space, gaining particular acclaim for its decentralized and permissionless network. One of the highlights of Rocket Pool is its inclusivity, allowing anyone to join as a node operator and start staking with as little as 0.01 ETH. This flexibility makes it accessible for new and seasoned DeFi investors in the staking ecosystem.
By staking on Rocket Pool, users receive rETH, a liquid staking derivative that represents their staked ETH and accumulates rewards. The platform offers an impressive APR of approximately 6.97% for Ethereum staking, along with additional RPL rewards, providing a highly competitive yield for users.
- Supported Networks: Ethereum only.
- Current Yields: Approximately 6.97% APR for Ethereum, plus additional RPL rewards.
- Total Value Locked (TVL): 823,328 ETH staked, operated by 3,288 node operators.
- Liquid Staking Derivatives: rETH for Ethereum.
3. Frax Ether
Frax Ether is a popular choice for DeFi-natives in liquid staking derivatives, specializing in a system that smoothly integrates the stablecoin and yield components into the Ethereum staking process. Operating under the umbrella of the Frax Finance ecosystem, Frax Ether offers a unique approach to staking that combines a stablecoin mechanism with high-yield opportunities.
The Frax Ether system is built around three primary elements: Frax Ether (frxETH), Staked Frax Ether (sfrxETH), and the Frax ETH Minter. frxETH functions as a stablecoin loosely pegged to ETH, while sfrxETH represents the yield-generating version of frxETH. When you exchange frxETH for sfrxETH, you become eligible for staking yield, which can later be redeemed by converting sfrxETH back to frxETH.
- Supported Networks: Ethereum only.
- Current Yields: Estimated 3.83% APR for sfrxETH.
- Total Value Locked (TVL): $435.68 million.
- Liquid Staking Derivatives: frxETH and sfrxETH for Ethereum.
4. Coinbase Ethereum (cbETH)
Coinbase ETH (cbETH) is a reliable and straightforward avenue for Ethereum staking, backed by the reputation of Coinbase, a publicly listed and audited cryptocurrency exchange. Users can easily convert their staked ETH into cbETH without any fees, enjoying the flexibility to trade it on Coinbase or decentralized platforms like Uniswap and Curve. Security is a top priority; Coinbase collaborates with trusted validators and uses top-notch encryption to ensure a safe environment for your assets.
Beyond its robust security features, cbETH is designed for easy integration with various DeFi applications, adding layers of utility and versatility. This strategic compatibility aims to attract a broader user base and fuel growth in the DeFi sector. With a Total Value Locked (TVL) of $317.21 million, cbETH isn't merely leveraging Coinbase's brand name but proves to be a rewarding and secure option for Ethereum staking, making it ideal for those who value the assurance that comes from a reputable industry player.
- Supported Networks: Ethereum only.
- Current Yields: Rewards rates are determined by the Ethereum protocol, and Coinbase will pass these on to users minus a commission fee.
- Total Value Locked (TVL): $317.21 million.
- Liquid Staking Derivatives: cbETH for Ethereum.
Rounding out our list of the top 5 staking platforms is Stader, a multi-chain liquid staking solution. With a user base of over 85,000 and $124 million in staked assets, Stader offers a secure and audited environment that has paid out more than $25 million in rewards. You can stake tokens and receive liquid equivalents, which are usable in over 40 DeFi protocols, allowing you the freedom to earn additional rewards and maintain liquidity.
What elevates Stader is its flexibility and variety in blockchain support. Whether interested in Ethereum with its 3.67% annual yield or Polygon at 4.68%, Stader lets you diversify your staking portfolio. Moreover, liquid staking ensures that your assets are not locked up and you benefit from auto-compounded earnings. With reputable backers like Pantera Capital and Coinbase Ventures, Stader is establishing itself as a trusted, versatile choice for staking.
- Supported Networks: Ethereum, Polygon, Hedera, BNB, Fantom, Near, Terra 2.0.
- Current Yields: Vary based on the blockchain (E.g., Ethereum: 3.67%, Matic: 4.68%, BNB: 2.23%).
- Total Value Locked (TVL): $124 million (E.g., Ethereum: $37M, Polygon: $50M).
- Liquid Staking Derivatives: ETHx, BNBx, HBARx, FTMx and more.
Are Liquid Staking Protocols Safe?
The safety of liquid staking platforms varies widely, often hinging on the extent of security audits on their smart contracts. Comprehensive audits by reputable firms like STATEMIND or ConsenSys Diligence can flag vulnerabilities and offer a degree of confidence in the platform's security measures. Another critical factor to consider is the Total Value Locked (TVL) within a platform, which can serve as a real-world stress test of its safety features.
Among the platforms, Lido Finance stands out with the highest TVL, indicating a high level of trust and crypto-economic security. A high TVL usually signifies robustness against vulnerabilities and a strong sense of community trust, making it a useful metric for assessing the safety of a staking platform.
What is Liquid Staking?
Liquid staking is a financial innovation in the cryptocurrency space that allows users to stake their digital assets while still maintaining liquidity. In traditional staking, your assets are locked up for a specific period, limiting your ability to trade or use them in other financial applications. Liquid staking solves this issue by providing you with liquid staking derivatives, tokens that represent your staked assets.
These derivatives can be freely traded or used in various decentralized finance (DeFi) protocols, allowing you to earn staking rewards and additional yields simultaneously. This approach offers the best of both worlds: the ability to participate in network security and earn rewards, all while maintaining asset liquidity.
In conclusion, our in-depth analysis has identified Lido, Rocket Pool, Frax Ether, Coinbase ETH, and Stader as standout platforms in the liquid staking landscape, excelling in key areas such as Total Value Locked (TVL), smart contract security, and annual percentage rates (APR) for staking yields.
These platforms facilitate the acquisition of liquid staking derivatives, which can be integrated into other DeFi protocols for compounded yield generation. By making an informed decision based on metrics like TVL and security audits, you can optimize your staking strategies while maintaining asset liquidity.