What is liquid staking?
Liquid staking lets you stake ETH or SOL and get a token back that you can still use. How it works, what it earns, and the risks to weigh.
Updated Nov 9, 2026
In short
Staking locks coins to help secure a proof-of-stake network such as Ethereum or Solana, in return for rewards. Liquid staking does it through a protocol that gives you a token representing your stake, such as stETH or JitoSOL. The token earns the staking rewards and can still be held, sent, swapped or used as collateral. The trade-off is the protocol's own risks: smart contracts, the validators it picks, and the token trading below what it's worth.
How it works
You deposit ETH or SOL with a liquid staking protocol. It stakes them with validators and gives you a token in return. Depending on the protocol, that token either grows in value against the coin as rewards build up, or stays at one and your balance grows.
Staking on your own needs a minimum (32 ETH to run an Ethereum validator) and keeps your coins locked. Liquid staking has no such minimum, and the token stays usable.
What it earns
The network's staking rewards, less the protocol's fee. Rates move with how many coins are staked overall and how much activity there is on the network. Using the token as collateral or in a pool can earn more, and adds that protocol's risk on top.
The risks
- Smart contracts: a bug in the protocol could lose deposits.
- Validators: if a validator misbehaves, part of the stake can be slashed.
- Price: the token can trade below the coin it represents when markets are stressed.
- Concentration: some protocols put their stake with a few node operators, which ethereum.org flags as a risk to the network itself, and a protocol's rules can change through its own governance.
In Burokku
The Stake tool compares liquid staking for ETH and SOL side by side (Lido, Rocket Pool, ether.fi, Jito and Marinade, and the exchanges' own tokens), with each one's rate, how much is staked and a note on how it's run, lets you stake from any connected wallet, and tracks your rewards in your portfolio and tax report.
Questions
- Is a liquid staking token worth exactly one ETH or SOL?
- Not always. It's backed by the staked coins plus rewards, but on the market it can trade slightly below, especially when many people want out at once. Redeeming through the protocol gets you the full value, after any withdrawal wait.
- Do liquid staking rewards count as income for tax?
- In many countries staking rewards are income when received, but liquid staking tokens that grow in value rather than paying out are treated differently from place to place. Check your country's rules or ask your accountant.