Liquid Staking - A Comprehensive Guide to Getting Started

Crypto Basics

Liquid Staking - A Comprehensive Guide to Getting Started

Learn everything about liquid staking with our detailed guide. Check how to start and unleash the potential for passive income in the crypto space.

Marcus K

8 Minutes

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Overview of Solana Blockchain

Cryptocurrency enthusiasts are always on the lookout for new and innovative ways to make the most of their digital assets. One such method that has been gaining traction in recent years is liquid staking.

This approach allows users to stake their tokens in proof-of-stake (PoS) blockchains while maintaining liquidity and participating in other decentralized finance (DeFi) activities.

In this article, we will explore the concept of liquid staking, how it works, its advantages and disadvantages, popular cryptocurrencies that support this method, and how you can get started.

Understanding Staking and Its Benefits

Before delving into liquid staking, it's essential to grasp the concept of staking and its benefits. Staking involves locking up a certain amount of tokens in a PoS blockchain network to support its operations and security.

In return for staking, participants can earn rewards in the form of additional tokens. Staking provides several benefits, such as incentivizing token holders to act in the network's best interest and maintaining the blockchain's security and integrity.

What is Liquid Staking?

Liquid staking takes the traditional staking model a step further by allowing users to stake their tokens and receive a separate token, known as a liquid staking token (LST), in return.

These LSTs represent ownership of the staked tokens and can be freely traded, used in DeFi protocols, or transferred to other users. This innovative approach allows users to access liquidity and utilize their staked assets while potentially earning staking rewards.

How Does Liquid Staking Work?

Liquid staking involves a three-step process: staking, issuing liquid staking tokens, and unstaking. The first step is similar to traditional staking, where users lock their tokens in a designated smart contract on a liquid staking platform. The platform then verifies the tokens' legitimacy and stores them securely.

In the next phase, the platform issues the users liquid staking tokens (LSTs) as receipts for their staked assets.

These LSTs are pegged to the value of the original tokens and can be used in various DeFi protocols and blockchain applications. The platform also utilizes the staked assets for native staking, earning rewards from securing the PoS blockchain.

When users decide to unstake their tokens, they must burn the corresponding LSTs. This process typically incurs a fee, and the platform verifies the burn transaction on-chain before returning the unstaked tokens to the user.

It's important to note that liquid staking platforms may also impose a bonding period, during which users may have to wait before receiving their unstaked tokens.

Advantages of Liquid Staking

Liquid staking offers several advantages over traditional staking methods. Firstly, it provides increased accessibility and flexibility to users.

Unlike traditional staking, which often requires a bonding period, liquid staking allows users to unstake their tokens and access liquidity immediately. This flexibility enables efficient capital allocation and utilizing staked assets in other financial activities.

Secondly, liquid staking enhances the liquidity of staked assets. Traditional staking typically locks up the tokens for a specific period, restricting their use and trading. With liquid staking, users receive LSTs that can be freely traded, swapped, or used as collateral in lending protocols.

This additional liquidity opens up a world of possibilities for users, allowing them to maximize the utility of their staked assets.

Liquid staking also promotes the composability of DeFi protocols. By enabling users to use their LSTs in various DeFi platforms, liquid staking enhances the interoperability and integration of different applications within the decentralized ecosystem.

Users can lend, borrow, or participate in yield farming using their LSTs, increasing their engagement and potential returns.

Lastly, liquid staking may offer higher rewards compared to traditional staking. Users can earn additional rewards on top of their original staking rewards by utilizing LSTs in multiple staking platforms.

This strategy allows for the optimization of staking returns without the need for additional investments.

Disadvantages of Liquid Staking

While liquid staking offers numerous advantages, it's important to consider this method's potential risks and challenges. One significant risk is the possibility of smart contract vulnerabilities.

Since liquid staking involves interacting with smart contracts, there is a chance of exploitation if a flaw or bug exists in the code. Choosing reputable and audited liquid staking platforms to mitigate this risk is crucial.

Another challenge is the potential for price volatility. LSTs are pegged to the value of the original tokens, but there is a risk of de-pegging if market conditions fluctuate significantly.

If the LSTs' value deviates from the underlying assets, users may experience losses when trading or redeeming their LSTs. It's essential to closely monitor market conditions and assess the risks before engaging in liquid staking.

Additionally, liquid staking may involve higher fees compared to traditional staking. Liquid staking platforms often charge fees for the issuance and burning of LSTs, as well as network transaction fees.

These costs can impact the overall profitability of liquid staking, especially for users with smaller staking amounts.

Staking Vs. Liquid Staking: Key Differences

It's important to distinguish between traditional staking and liquid staking to understand their unique characteristics.

Traditional staking involves locking up tokens in a smart contract without the ability to use or transfer them until the staking period ends. Stakers earn rewards solely from staking activities.

On the other hand, liquid staking provides users with a receipt token (LST) that represents ownership of the staked assets. These LSTs are freely transferable and can be used in DeFi protocols, providing users with additional liquidity and utility.

Liquid staking enables users to potentially earn rewards while still participating in other blockchain activities, offering a more flexible approach compared to traditional staking.

Popular Crypto That Supports Liquid Staking

Liquid staking has gained significant traction across various blockchain networks, with several cryptocurrencies supporting this innovative method.

Ethereum, one of the largest and most well-known blockchains, has implemented liquid staking following its transition to a PoS consensus mechanism.

Users can stake their ETH and receive liquid staking tokens (LSTs), such as stETH, which can be used in DeFi protocols and traded on supported platforms.

Other popular cryptocurrencies that support liquid staking include Polkadot, Cardano, Avalanche, and Cosmos. Each of these projects offers its own liquid staking solutions, allowing users to stake their tokens and benefit from the advantages of liquidity and additional utility.

How to Start Liquid Staking?

If you're interested in participating in liquid staking, choosing a reputable and secure platform that supports this method is essential.

Ledger, a prominent cryptocurrency hardware wallet provider, offers a liquid staking platform through its Ledger Live ecosystem.

Connecting your Ledger device to Ledger Live and navigating to the Discover tab allows you to explore liquid staking options available on supported networks such as Polygon, Hedera, BNB, Near, Terra 2.0, and Fantom.

By utilizing Ledger's secure infrastructure, you can stake your tokens, receive liquid staking tokens (LSTs), and participate in the vibrant world of DeFi while maintaining full control and custody of your assets.

Conclusion

Liquid staking is an innovative approach to maximize the potential of your crypto assets. By combining the benefits of staking with increased liquidity and utility, liquid staking offers users a flexible and efficient way to participate in PoS networks while enjoying the opportunities provided by DeFi protocols.

It's important to weigh the advantages and disadvantages, consider the risks, and choose reliable platforms to ensure a successful liquid staking experience.

With the growing adoption and development of liquid staking solutions, this method is poised to play a significant role in the future of blockchain-based finance.

Frequently Asked Questions

Q1. How is liquid staking different from traditional staking?

Liquid staking allows users to maintain liquidity and utilize their staked assets, while traditional staking locks up tokens for a specific period without the ability to use or transfer them until the staking period ends.

Q2. Which cryptocurrencies support liquid staking?

Popular cryptocurrencies that support liquid staking include Ethereum, Polkadot, Cardano, Avalanche, and Cosmos. Each project offers its own solutions for users to participate in liquid staking.

Q3. How can I start liquid staking?

To start liquid staking, choose a reputable platform that supports this method, such as Ledger's liquid staking platform. Connect your Ledger device to Ledger Live, explore the available options, and stake your tokens while maintaining full control of your assets.

Q4. Is liquid staking safe?

Liquid staking carries risks, such as smart contract vulnerabilities and price volatility. It's crucial to choose secure platforms, conduct thorough research, and stay informed about potential risks and developments in the cryptocurrency space.

Q5. Can I unstake my tokens in liquid staking?

Users can unstake their tokens in liquid staking by burning the corresponding liquid staking tokens (LSTs). However, the process may involve fees, and a bonding period may exist before users can receive their unstaked tokens.

Q6. What is the future of liquid staking?

Liquid staking is expected to play a significant role in the future of blockchain-based finance. As more projects adopt and develop liquid staking solutions, users can expect increased accessibility, liquidity, and integration with DeFi protocols, further enhancing the potential of their crypto assets.

Disclaimer

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other advice, and you should not treat any of the website's content as such.

Token Metrics does not recommend buying, selling, or holding any cryptocurrency. Conduct your due diligence and consult your financial advisor before making investment decisions.

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From Retail to Institutions: Who’s Driving the Crypto Market in 2025?

Token Metrics Team

4 min

MIN

Crypto markets are evolving — and fast. In the early days, retail investors dominated the space. But by 2025, the tides are shifting. Institutional investors, family offices, and algorithmic funds are entering the market at scale. This blog explores the growing divide — and how it’s reshaping opportunities for everyday traders.

The Rise of Institutional Money in Crypto
Over the last year, a new class of investors has emerged: professional firms with deep pockets and long-term horizons. They're no longer just “exploring crypto” — they’re actively deploying capital.

Why now?

Regulatory clarity in major jurisdictions
Bitcoin ETF approvals and crypto fund launches
Better custody, risk management, and analytics tools (including Token Metrics)

What Are Institutions Buying?
Institutions tend to avoid meme coins and hyper-volatility. Instead, they focus on:

Layer 1 Infrastructure – Ethereum alternatives like Sui and Avalanche
AI Tokens – Leveraging real-world utility and strong narratives
DeFi Blue Chips – Projects with consistent TVL and governance upgrades
Stable Yield Strategies – On-chain bonds, staking, and real-world asset tokens

Token Metrics has seen a spike in institutional users filtering by Investor Grade and project fundamentals.

Retail Traders Still Dominate One Arena
Retail traders are far from out — they dominate high-volatility narratives:

Meme tokens
Social coin launches (e.g., Launchcoin)
Short-term speculation based on influencer sentiment

Retail’s edge? Speed, risk tolerance, and virality. Many of Token Metrics’ bold signals still originate from this activity before institutions catch on.

Token Metrics Bridging the Divide
What makes Token Metrics powerful in 2025 is its ability to serve both segments:

Institutions use it for due diligence, grades, and long-term planning.
Retail traders use it for short-term signals, alerts, and narrative tracking.

This dual capability creates a level playing field, where data, not capital, is the edge.

How to Trade Based on Who’s in Control

When institutions lead – expect slower but more sustainable growth. Focus on high Investor Grade tokens.
When retail leads – expect fast-moving pumps and dumps. Use high Trader Grade + bold signals.
Hybrid phase (now) – Use both metrics to balance volatility and long-term conviction.

Market Behavior Patterns to Watch

Low volatility + high inflows → Institutional buildup
High volume + sudden spikes → Retail-driven narratives
Diverging BTC vs. altcoin trends → Mixed sentiment cycles

Conclusion
The crypto market in 2025 is being driven by both the old guard and the new wave. Institutions bring maturity. Retail brings momentum. Smart investors use tools like Token Metrics to read the room — and position themselves accordingly.

Research

Trader vs. Investor Grade: How to Use Both for Smarter Crypto Bets

Token Metrics Team

4 min

MIN

Crypto trading success often boils down to timing. But how do you know when to enter — and when to stay long? Token Metrics solves this dilemma with a dual-grade system: Trader Grade and Investor Grade. Each grade serves a different investment goal, and together, they help you make more confident decisions, whether you’re day trading or holding for the long run.

What is the Trader Grade?
The Trader Grade measures short-term momentum. It uses AI to analyze price action, volume trends, technical indicators, and recent sentiment shifts. Scores range from 0 to 100, and a score above 80 signals strong short-term potential.

Use Case:

Perfect for swing traders and short-term opportunists.
Look for tokens with Trader Grade > 80 for potential breakout trades.
Example: Launchcoin had a Trader Grade above 90 before its 35x rally began.

What is the Investor Grade?
The Investor Grade focuses on long-term fundamentals. It’s designed for those who want to hold tokens for months or even years. This grade considers tokenomics, development activity, ecosystem strength, narrative alignment, and long-term price structure.

Use Case:

Ideal for long-term portfolio builders.
A token with Investor Grade > 80 is a strong candidate for accumulation.
AI infrastructure tokens and modular blockchains often rank high here.

Why Use Both?
Most traders fail by only looking at hype or short-term charts. Token Metrics lets you blend data:

High Trader Grade + Low Investor Grade? Consider a short-term trade, not a long hold.
High Investor Grade + Low Trader Grade? Consider waiting for a better entry point.
Both High? Green light for confidence in both entry and long-term performance.

Case Study: Balancing Your Portfolio with Grades
Users can use the dual-grade approach for smarter allocation:

30% of capital to high Trader Grade tokens (short-term plays)
70% to high Investor Grade tokens (long-term holds)

This method helps mitigate risk and improve overall ROI.

Where to Find the Grades
Both grades are displayed prominently across:

Token Detail Pages – Real-time grade updates with historical data
Market Page Filters – Sort tokens by grade thresholds
Portfolio Builder Tool – Automatically selects tokens with strong grades

Tips for Grade-Based Trading

Use Trader Grade for volatile markets or when prices are accelerating.
Use Investor Grade when building positions in strong narratives like AI, DeFi, or infrastructure.
Avoid tokens with both grades below 60 unless you’re making a speculative bet.

Conclusion
Trading without context is gambling. Token Metrics’ Trader and Investor Grades give you a proven framework for assessing both momentum and fundamentals. Whether you’re here for a quick flip or a long-term bet, using the dual-grade system can level up your crypto strategy.

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Inside the Dashboard: How to Monitor API Key Activity and Monthly Usage in Real Time

Token Metrics Team

5 min

MIN

The power of any great API isn’t just in the data it provides — it’s also in the control, visibility, and accountability it gives developers. That’s why the Token Metrics API Dashboard is more than just a place to generate keys — it’s your real-time command center for monitoring API key usage, managing access, and optimizing performance.

In this article, we’ll explore how to use the Token Metrics API Dashboard to stay in control of your app’s data usage, track request history, and ensure your integrations remain secure and efficient.

📍 Where to Find It

To access the dashboard:

Log in to your Token Metrics account.
Go to: https://app.tokenmetrics.com/en/api
Navigate to the API Keys and API Usage sections.

🔐 View and Manage API Keys

The API Keys section gives you a complete overview of every active key associated with your account. For each key, you’ll see:

Key Name: Descriptive labels like "Bot A" or "Staging Server"
Created Date: When the key was generated
Last Used: Timestamp of the most recent request
Status: Active or inactive toggle
Actions: Trash icon to instantly delete a key

💡 Why It Matters:

Spot unused or stale keys that may pose a security risk
Instantly disable or delete a key if it’s compromised
Monitor which app or environment is making the most requests

📊 Monitor API Usage in Real-Time

In the Usage Dashboard, Token Metrics gives you deep insights into how your API credits are being used.

Key metrics include:

API Calls Graph
A daily call volume chart so you can identify peaks in usage, anomalies, or unexpected surges.
Total Monthly API Calls
Example:
8,750 / 20,000
See how much of your monthly quota you’ve used — and when it resets.
Remaining API Credits
Know exactly how many calls you have left in your current cycle.
API Call Statistics Table
Each row includes:
- Endpoint accessed (e.g., /trader-grade)
- Timestamp of the request
- Status code (200 = success, 401 = unauthorized, etc.)
- Originating IP address
- Success/failure response

🔄 Debugging & Insights Made Easy

This dashboard doesn’t just monitor—it helps you debug and optimize.

Quickly identify if your integration is repeatedly hitting 400 or 403 errors
Check whether a specific key is being overused or underused
Pinpoint spikes in usage that may indicate unauthorized access
See which endpoints are called most often — and consider caching results

⚠️ Avoid Rate Limit Surprises

If you’re on a Basic or Advanced plan, you’ll have a rate limit (e.g., 1 req/min for free users, up to 600 req/min for VIPs). The dashboard helps ensure you stay within your limits — and scale appropriately when needed.

🚀 Build Better with Transparency

In a production environment, visibility into API activity is critical. With Token Metrics, you’re never flying blind. You always know:

Which app is using which key
How many credits you’re using
When to optimize or upgrade

From security to scaling, the Token Metrics API Dashboard gives you the insight you need to build with clarity and control.

👉 Launch Your API Dashboard Now → tokenmetrics.com/api

Token Metrics Media LLC is a regular publication of information, analysis, and commentary focused especially on blockchain technology and business, cryptocurrency, blockchain-based tokens, market trends, and trading strategies.

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