The Importance of Liquid Staking in DeFi

Liquid staking is a foundational element of DeFi as it helps to unlock the critical bottleneck of capital efficiency. As assets previously bound by staking become liquid on the surface layer of DeFi, liquid staking protocols foster a more interoperable and interconnected DeFi ecosystem where capital can be transferred more easily, raising market efficiencies and accessibility. In addition, liquid staking democratizes network consensus and security, encouraging diversification by lowering the upfront capital required for staking by smaller participants, and thereby promoting a more decentralized and secure network. Long gone are the days where you had to have a major chunk of cash to participate in network validation.