LSDs in Crypto: What They Are, Why They Matter, and Where to Find Them
When you stake Ethereum or other proof-of-stake coins, you lock up your tokens to help secure the network—and earn rewards. But what if you could stake LSDs and still use your tokens elsewhere? That’s the whole point of liquid staking derivatives. LSDs, liquid staking derivatives are tokens issued in exchange for staked assets, letting you keep earning rewards while using your staked crypto in DeFi protocols. Also known as liquid staking tokens, they solve the biggest problem with staking: illiquidity. Instead of sitting idle, your staked ETH can now power loans, trades, or yield farms—all while still accruing staking rewards. It’s like having your cake and eating it too.
LSDs aren’t just a technical trick. They’re reshaping DeFi. Protocols like Lido, a leading liquid staking platform that issues stETH tokens for staked Ethereum, now manage billions in staked assets. StakeWise, another major LSD provider, lets users stake ETH and receive swETH, which works across multiple DeFi apps. These aren’t theoretical experiments—they’re live, used daily, and integrated into top DeFi protocols like Aave and Uniswap. But not all LSDs are equal. Some have weak backing, poor audits, or hidden risks. That’s why you need to know which ones are built to last and which are just hype.
The rise of LSDs also ties into Ethereum’s shift to proof-of-stake. With fewer miners and more stakers, the demand for liquid access to staked assets exploded. That’s why you’ll see LSDs pop up in posts about DeFi TVL, yield farming, and even crypto regulations. They’re not just a niche tool—they’re a core part of how modern crypto earns and moves value. You’ll find posts here that break down real LSD projects, expose scams pretending to be LSDs, and show you how to use them safely. Some will tell you how to earn from staking without locking up your funds. Others will warn you about the hidden fees, oracle risks, and withdrawal delays that can wipe out your gains. This isn’t about guessing which token will moon. It’s about understanding what LSDs actually do, who backs them, and how to use them without getting burned.
Understanding Liquid Staking Derivatives: How LSDs Unlock Yield Without Locking Up Your ETH
Liquid staking derivatives let you earn Ethereum staking rewards while keeping your ETH liquid. Discover how stETH, rETH, and cbETH work, their risks, top providers, and how to start earning yield on yield in DeFi.
- June 11 2025
- Terri DeLange
- 11 Comments