What does liquid staking refer to? What does it mean?
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Liquid Staking is the next step in the evolution of the proof of stake market, users can earn passive income by staking funds. Liquid Staking brings flexibility and liquidity to your staked funds.
After depositing your preferred funds, you receive an issued tokenized version of your funds – a sort of derivative or wrapped token. This minted token represents your funds. Now it can be transferred, stored, spent, or traded like a regular token. It is highly recommended to test Liquid Staking at the beginning with a small number of your funds. Understand all risks, then, dive deeper into it.
Liquid staking has been gaining a lot of popularity lately. And as its name suggests, it allows using the staked crypto assets in other trading or investing opportunities to let you get the best of both worlds – a reward on your staked assets, as well as the returns from new trading/investing opportunities that you spot. It does so by tokenizing the stakes, so the stakeholders can use them as collateral in other financial applications. Tokenized stakes, sometimes also known as staking derivatives, can be traded freely among users, locations, and even blockchains.