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Top 7 High-Yield Liquid Staking Platforms To Watch in 2024

9 mins
Fact Checked
by Ryan Glenn
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The popularity of liquid staking is growing fast. The topic has seen somewhat of a resurgence in light of Ethereum’s Shapella upgrade. The long-awaited ETH liquidity benefits liquid staking providers, with users now able to leverage underlying staked ETH. But which platforms are safe and secure choices, and which offer the highest yields? If you’re keen you participate in liquid staking, here are the top seven high-yield platforms with the BeInCrypto seal of approval.

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What is liquid staking?

liquid staking platforms

Simply put, liquid staking is a way to stake a cryptocurrency by creating an equivalent token that you do not have to “lock up.” They are sort of like futures or options contracts, without deadlines.

In proof of stake (PoS) blockchains, users stake their coins by locking them in a smart contract. Subsequently, the protocol chooses who will validate blocks based on who has staked their coins.

In previous years, many blockchain protocols did not allow you to move these coins or tokens while they were staked. They are effectually locked in the protocol. The advent of liquid staking platforms created a way to hold an equivalent of the staked crypto, which means that your funds no longer have to sit idle.

7 best liquid staking platforms in 2024

Lido Finance

Lido Finance

Decentralized
Lido
Crypto
ETH, SOL, MATIC
Custody
Non-custodial
Fees
10%
4.3%-6.5%
Rocketpool

Rocketpool

Decentralized
Rocketpool
Crypto
ETH
Custody
Non-custodial
Fees
5%-20%
APR
7.08%
Benqi

Benqi

Decentralized
Benqi
Crypto
AVAX
Custody
Non-custodial
Fees
No fees
APR
Up to 7.2%
Marinade Finance

Marinade Finance

Centralized
Marinade
Crypto
SOL
Custody
Non-custodial
Fees
6% and 0.3%-9%
APR
6.64% APY
Parallel DeFi Super App

Parallel DeFi Super App

Centralized
Parallel Finance
Crypto
DOT, KSM
Custody
Non-custodial
Fees
3%
APR
Variable
Stakewise

Stakewise

Centralized
Stakewise
Crypto
ETH
Custody
Non-custodial
Fees
10%
APR
4.23%
StaFi

StaFi

Centralized
Staking Finance
Crypto
Cosmos, BNB, and 5+
Custody
Non-custodial
Fees
Depends on the blockchain
APR
Up to 23.17%

What are the advantages of liquid staking?

The most obvious advantage of liquid staking is that it offers a way for stakers to use their tokens while earning staking rewards. Some blockchains have un-bonding periods. Validators may have to wait up to a month before they can withdraw their staked crypto, depending on the protocol.

With liquid staking, you can keep your crypto staked. Instead of going through a lengthy un-bonding period, you can take your LSD and use it how you please.

Another advantage of liquid staking is the ability to arbitrage. Arbitrage is the simultaneous purchase and sale of cryptocurrencies in different markets or derivative forms in order to profit from price differences for the same asset.

For example, the par value of ETH is $2,000. Let’s say that there is an LSD equivalent of ETH called sETH (i.e., staked ETH). sETH trades for $1,800 on a liquid staking protocol. You can trade one sETH for one ETH and make a $200 profit.

Let’s go even further. Holding sETH allows you to claim the rewards associated with staking ETH on the Ethereum blockchain. Instead of staking directly, you can purchase an LSD for the opportunity to claim staking rewards (typically in the form of more LSD).

Perhaps the most interesting advantage of liquid staking is the ability to earn yield through DeFi strategies. You can take your LSD and lend or stake it to earn a yield on other platforms.

In summary, the advantages of liquid staking are:

  • Arbitrage
  • Yield farming
  • Earn staking rewards
  • “Unlock” your crypto

What are the disadvantages of liquid staking?

liquid staking platforms mistakes

While liquid staking platforms may come off as a panacea, they do have some risks. The largest one is counterparty risk. Instead of running a node yourself, you stake your crypto with a liquid staking platform.

In turn, they run the nodes for you in your stead. Therefore, you must rely on the platform to have near-perfect uptime, avoid attestation penalties, and avoid slashings altogether.

In the event that the platform does not perform, you could potentially lose your stake. This leads to the next point. You must rely on the platform to payout earnings.

Are LSD platforms the future?

Liquid staking platforms provide a unique niche in the marketplace. They function similarly to traditional derivatives and allow holders to speculate and gain exposure to the underlying asset they are derived from.

However, the practice is young and may present a contagion risk. Many platforms are springing up, offering LSD, accepting them as collateral, and borrowing and lending them.

If the underlying asset collapses, the LSD tokens collapse. Imagine what happens when these types of tokens are used to prop up the price of other assets. On a more positive note, that risk is reduced as long as you are simply staking.

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Ryan Glenn
Ryan Glenn is a journalist, writer, and author. Ryan is motivated to educate as many people as possible on the benefits of web3 and cryptocurrency. He has authored “The Best Book for Learning Cryptocurrency,” and runs an educational platform, web3school.us, dedicated to demystifying the crypto space. Ryan built the platform to transition tech-savvy and non-tech individuals into crypto and give everyone a baseline understanding of the different fields in the cryptosphere. Ryan is also an...
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