Liquid Staking – Benefits We have already discovered that Liq | House Of Chimera

Liquid Staking – Benefits

We have already discovered that Liquid Staking enables users to earn additional rewards while having their funds locked . This is because the technique introduces mobility that, for example, allows to:

offset losses from the staked funds
increase returns

Long-term locking of funds in crypto assets can be risky due to their volatile nature. The value of the locked digital currencies can also fluctuate based on the underlying asset's performance. This can potentially result in losses during bear markets. However, Liquid Staking allows the withdrawal of a tokenised version and to deposit it in income-generation systems to cover losses.

Secondly, it provides possible access to multiple income streams, meaning that the tokenised version can be used as collateral to obtain crypto-backed loans, which can be deposited on higher yield-bearing accounts. This enhances returns on a single investment .