You've probably heard that you can earn passive income by staking your crypto. Put your ETH or SOL to work, help secure the network, and collect rewards. Sounds great, right?

But there's a catch. Traditional staking locks up your tokens. That ETH you staked? You can't use it, trade it, or do anything with it until you unstake. And unstaking can take days or even weeks. Pistachio.fi is a crypto yield platform that gives you access to top liquid staking protocols without the usual DeFi friction.

Key takeaways

• Liquid staking lets you earn staking rewards while keeping your tokens usable in DeFi.

• No lock-up: Unlike traditional staking, you can exit anytime via secondary markets instead of waiting in unstaking queues.

• No minimums: Stake any amount (traditional Ethereum staking requires 32 ETH).

• Current yields: 3-4% APY for ETH (Lido, Rocket Pool), 7-12% for SOL (Jito, Marinade).

Here's how liquid staking works, what the risks are, and whether it makes sense for you.

What is liquid staking?

Liquid staking is a way to stake your crypto while keeping access to its value. When you deposit your tokens with a liquid staking protocol, you receive a receipt token in return. This receipt token, called a Liquid Staking Token (LST), represents your staked assets plus any rewards you earn.

Think of it like a coat check at a restaurant. You hand over your coat, get a ticket, and can use that ticket to claim your coat later. But unlike a regular coat check, your LST ticket actually grows in value over time as staking rewards accumulate.

The most well-known example is Lido's stETH. When you stake 1 ETH through Lido, you receive 1 stETH. Your original ETH goes to work securing the Ethereum network. Meanwhile, you can take that stETH and use it elsewhere in DeFi: lending it, providing liquidity, or using it as collateral.

How does traditional staking compare to liquid staking?

To understand why liquid staking matters, you need to understand what traditional staking involves.

Traditional staking

With traditional staking on Ethereum, you need 32 ETH to run your own validator. That's a lot of capital. Your ETH gets locked up, and if you want to unstake, you join a withdrawal queue that can take anywhere from a few days to several weeks depending on network conditions.

You earn rewards, typically around 3-4% APY, but your ETH sits there doing nothing else. It's like putting money in a savings account that doesn't let you withdraw for months. For more on Ethereum staking yields specifically, see our guide on Ethereum staking yield.

Liquid staking

Liquid staking removes these barriers. You can stake any amount. There's no 32 ETH minimum. You receive an LST that moves freely between wallets and protocols. And you can often exit your position much faster through secondary markets.

Here's a side-by-side comparison:

How does liquid staking work?

Here's what happens when you use a liquid staking protocol:

Step 1: Deposit your tokens. You connect your wallet to a liquid staking protocol like Lido and deposit your ETH (or SOL, or another supported asset).

Step 2: Receive your LST. The protocol gives you a liquid staking token. If you deposited ETH through Lido, you get stETH. Through Rocket Pool, you get rETH.

Step 3: The protocol stakes on your behalf. Your original tokens get distributed across a network of validators. These validators do the actual work of securing the blockchain and earning rewards.

Step 4: Rewards accumulate. As validators earn rewards, the value flows back to LST holders. Some tokens like stETH increase in quantity (called rebasing), while others like rETH increase in value relative to ETH.

Step 5: Use your LST or redeem it. You can hold your LST and watch rewards accumulate. You can use it in DeFi protocols for additional yield. Or you can swap it back to the original token whenever you want.

What are the most popular liquid staking tokens?

The liquid staking market has grown significantly. Here are the major players:

Ethereum liquid staking tokens

stETH (Lido)

Lido is the largest liquid staking protocol, holding around 25% of all staked ETH. When you stake through Lido, you receive stETH, which rebases daily to reflect your earned rewards. The protocol takes a 10% fee on rewards, split between node operators and the Lido DAO.

Current yield: approximately 3-4% APY

rETH (Rocket Pool)

Rocket Pool prioritizes decentralization. Unlike Lido, which uses a permissioned set of node operators, Rocket Pool lets anyone run a node with just 8 ETH. The rETH token doesn't rebase. Instead, its exchange rate against ETH increases over time as rewards accumulate.

Current yield: approximately 2.8-3% APY for stakers, with node operators earning up to 6.3%

Solana liquid staking tokens

JitoSOL (Jito Network)

JitoSOL is the most popular Solana LST, making up about 36% of the Solana liquid staking market. What makes Jito interesting is that it captures MEV (Maximal Extractable Value) rewards on top of standard staking rewards, boosting your yield.

Current yield: approximately 7.5% APY

mSOL (Marinade Finance)

Marinade was one of the first liquid staking protocols on Solana. It distributes your stake across hundreds of validators to reduce risk and maximize decentralization.

Current yield: approximately 8-12% APY depending on staking method

Why do people use liquid staking?

Why has liquid staking become so popular? Several reasons.

Capital efficiency. Your staked tokens don't sit idle. You can use your LST as collateral to borrow, provide liquidity, or participate in other DeFi strategies. Some users stack multiple yield sources this way. Learn more about stacking yields in our passive income crypto guide.

No minimum requirements. You don't need 32 ETH to participate in Ethereum staking. Most protocols accept any amount.

Flexibility. Need your tokens back quickly? You can typically swap your LST on a decentralized exchange within minutes, rather than waiting in an unstaking queue.

Simplicity. Running your own validator requires technical knowledge and ongoing maintenance. Liquid staking protocols handle all of that.

What are the risks of liquid staking?

Liquid staking isn't risk-free. Before you participate, understand these potential downsides:

Smart contract risk

Liquid staking protocols are built on smart contracts. If there's a bug or vulnerability in the code, funds could be at risk. This is why protocol security and audits matter. Lido and Rocket Pool have undergone multiple audits, but risk is never zero. For tips on staying safe in DeFi, read how to stop getting hacked.

Slashing risk

Validators can be penalized (slashed) for misbehavior or going offline. If a validator running your staked tokens gets slashed, some of your stake could be lost. Reputable protocols spread stake across many validators to minimize this risk, and some have insurance mechanisms.

Depegging risk

LSTs are supposed to track the value of the underlying asset. One stETH should be worth about one ETH. But during market stress, LSTs can trade at a discount. In 2022, stETH briefly traded at 6% below ETH during a market panic. If you need to sell during such an event, you might get less than expected.

Centralization concerns

Lido controls a significant portion of staked ETH. Some worry this concentration poses risks to Ethereum's decentralization. Protocols like Rocket Pool exist partly to address this concern.

These risks are real but manageable. The major protocols have operated for years, survived market crashes, and handled billions in assets. That track record matters.

Getting started with liquid staking through Pistachio

If you want to try liquid staking but feel overwhelmed by the options, Pistachio makes it simpler.

Our Curated Investment Vaults give you access to top liquid staking protocols like Lido without needing to research every option yourself. We've done the due diligence so you can focus on earning yield.

Worried about which protocols are safe? Our Expert Risk Grades help you understand exactly what you're getting into. Every vault comes with clear risk assessments so you can make informed decisions that match your comfort level.

One of the biggest pain points in DeFi is gas fees eating into your returns. Pistachio is gasless, meaning no ETH fees chip away at your yield. What you earn is what you keep. Learn more about how smart accounts enable gasless transactions.

And when it comes to security, we don't cut corners. Institutional-grade protection means your assets are safeguarded by the same standards used by major financial institutions. See our security overview for details.

Whether you're staking your first 0.1 ETH or managing a larger portfolio, Pistachio removes the friction that keeps most people from participating in liquid staking.

Is liquid staking right for you?

Liquid staking makes sense if you:

• Want to earn staking rewards without locking up your tokens completely

• Don't have 32 ETH to run your own validator

• Want the option to use your staked assets in other DeFi protocols

• Prefer not to manage validator infrastructure yourself

It might not be the best choice if you:

• Are uncomfortable with smart contract risk

• Need guaranteed instant access to the full value of your tokens at all times

• Want maximum decentralization and are willing to run your own validator

What it comes down to

Liquid staking lets you earn staking rewards without giving up access to your capital. Instead of choosing between yield and liquidity, you get both.

The space has matured. Protocols like Lido, Rocket Pool, and Jito have processed billions in transactions and weathered multiple market cycles. Current yields range from around 3% for Ethereum to 8% or higher for Solana, with opportunities to stack additional DeFi returns on top.

Yes, there are risks. Smart contracts can have bugs. Markets can panic. LSTs can temporarily trade below their underlying value. But for many investors, the combination of yield and flexibility makes liquid staking worth considering.

If you've been sitting on the sidelines, wondering how to put your crypto to work without giving up flexibility, liquid staking is worth a closer look. And with platforms like Pistachio simplifying the process, getting started is more straightforward than it used to be.

Last updated: January 2026

Frequently asked questions

Is liquid staking safe?

Liquid staking carries smart contract risk and potential slashing risk, but major protocols like Lido and Rocket Pool have operated securely for years with billions in TVL. The main risks are smart contract bugs (rare in audited code) and temporary price depegs during market stress.

How much can I earn with liquid staking?

Current yields are 3-4% APY for Ethereum liquid staking (via Lido or Rocket Pool) and 7-12% APY for Solana (via Jito or Marinade). You can potentially earn more by using your LST in DeFi protocols for additional yield.

What's the difference between staking and liquid staking?

Traditional staking locks your tokens until you unstake, which can take days or weeks. Liquid staking gives you a receipt token (LST) you can trade or use in DeFi while still earning staking rewards. Same yield, more flexibility.

Do I need 32 ETH to do liquid staking?

No. The 32 ETH minimum only applies to running your own Ethereum validator. Liquid staking protocols like Lido accept any amount, even as little as 0.01 ETH.

Can I lose money with liquid staking?

Yes, though major loss events are rare. Risks include smart contract bugs, validator slashing, and temporary depegs where your LST trades below the underlying asset's value. Diversifying across protocols and using platforms with good track records helps manage these risks.