Key Takeaways

• Liquid Staking equals rewards plus flexibility. Earn staking rewards while staying active in DeFi.
• LSTs like LRON unlock more utility. You can use them in the ecosystem while earning staking rewards.
• Always be aware of risks. Watch out for smart contract bugs, depeg events, and protocol issues.

Liquid staking gives Ronin users the best of both worlds—staking rewards AND liquidity. Instead of locking up your assets (like in traditional staking), liquid staking lets you earn while still being able to use your tokens elsewhere in DeFi.

This protocol opens the door for more yield opportunities, more flexibility, and more ways to stay active in the ecosystem—all while earning through staking.

Why It Matters

• Earning While Staying Liquid: No more waiting for lock-up periods to end. Use your staked tokens in DeFi via LSTs.
• Maximized Rewards: Continue earning staking rewards while deploying Liquid Staking Tokens (LSTs) in the ecosystem.
• Enhanced Capital Efficiency: Your tokens work in multiple places at once, powering a flywheel effect.

💧 What Is Liquid Staking?

Liquid staking lets you stake your tokens and receive a Liquid Staking Token (LST) in return, maintaining liquidity while earning rewards. LSTs have a 1:1 ratio with how many tokens you stake in the protocol, and can be used across DeFi platforms for additional yield opportunities.

With traditional staking: Your tokens are locked and inaccessible during the staking period.

With liquid staking: Your tokens earn staking rewards and you receive LSTs to use in the DeFi ecosystem.

💧 What Are LSTs (Liquid Staking Tokens)?

LSTs are what you get in return when you stake via a liquid staking protocol. An example we’ll take a look at is Liquid RON (LRON).

Liquid RON is a Ronin staking protocol that automates user staking actions—deposit RON, get LRON for how much you deposited, and use LRON anywhere else.

• LRON still earns rewards like your staked RON would.
• You can use LRON in DeFi.
• Once unstaked, you redeem LRON for RON plus any earned rewards.

💧 Liquid Staking vs. Traditional Staking (Simplified)

How It Works (Simplified)

1. Stake your tokens in a liquid staking provider.
2. You receive LSTs, a tokenized version of your staked tokens.
3. You keep earning staking rewards, just like traditional staking.
4. The LSTs that you receive—you can use across the ecosystem (trade, lend, basically interact with the ecosystem just like what you would do with your original tokens).
5. When you want to redeem your tokens back, you may do so depending on the staking platform you used.

🔹 Advantages of Liquid Staking

As specified in previous sections, liquid staking has multiple benefits:

• Unlocked Liquidity: Keep your assets liquid and accessible.
• Enhanced Capital Efficiency: Use your LSTs to maximize multiple DeFi protocols—thus maximizing earnings.
• Continuous Staking: Earn staking rewards without locking up your assets for a period of time.

🔹 Risks and Disadvantages to Consider

While liquid staking offers flexibility, be mindful of the potential risks:

• Smart Contract Vulnerabilities: As these protocols rely on the blockchain, they rely on smart contracts as well. Be sure to stake in well-known protocols with properly audited smart contracts.
• Market Volatility: The value of LSTs can fluctuate, affecting overall returns.
• Slashing Risks: Validators may be penalized for malicious behavior and increased downtime, impacting your staked assets. Ensure that you are staking in a well-known validator.

🌊 Your Next Move with Liquid Staking

Ready to make the most of liquid staking? Here’s how you can get started:

• Stake your RON: Begin by using a trusted liquid staking protocol, such as LRON.
• Earn Rewards: Enjoy continuous staking rewards without the lock-up periods in traditional staking.
• Explore DeFi Opportunities: Use LRON as you would use your RON. Provide liquidity, lend, or trade for additional returns.
• Stay Informed: Keep an eye on market conditions, validator performance, and security.

Whether you are looking to optimize your yield or keep your assets flexible, liquid staking offers a smarter way to stay engaged in the ecosystem.