Staking & Liquid Staking Key Considerations

There are a few key considerations worth mentioning regarding Staking & Liquid Staking:

  • Passive Income from Staking Rewards: Users earn rewards for staking, with higher returns for validators but lower technical complexity for delegated stakers. Validators take a small commission in return for providing staking services.
  • Liquidity Lock-up Periods: Traditional staking locks funds, making them inaccessible for a set period (e.g., Ethereum’s 32 ETH staking requirement).
  • Smart Contract & Protocol Risk: Liquid staking protocols rely on smart contracts, which can be vulnerable to exploits, governance failures, or depegging risks.
  • Slashing Risk: Validators can be penalized for poor performance, potentially impacting stakers relying on them.

To learn more about Staking and Liquid Staking, visit: