There are many problems that can be solved with a network of tokens. One such problem is how to manage the trading of assets on different blockchains. Liquid staking is one solution to this problem. Where token holders can stake their tokens in exchange for receiving rewards from the network of their own stakes. It allows for inter-chain and intra-chain asset mobility by allowing for efficient pooling and trading of assets between different chains or even within a single chain itself.
Liquid Staking in a Nutshell
Liquid Staking is the ability to stake your tokens in a pool. The protocol then distributes rewards to token holders, who can withdraw their funds at any time.
In order to do liquid staking. You need one or more pools that have been created by the chain before it was launched and now act as gateways for staking tokens on the network. The protocol owned liquid staking pays out rewards based on how much was deposited into each of these pools during its initial launch period.
Why Implement Liquid Staking?
Liquid staking allows you to stake your assets on a variety of blockchains.
Inter-chain asset mobility: It’s possible to move your staked funds from one blockchain to another. Allowing you to diversify your portfolio over multiple networks.
Intra-chain asset mobility: Staking lets you stake tokens within a network and then use those tokens as collateral for loans or other transactions within that particular network. This can be useful if you’re looking at making cross-network investments. Where it would make sense for them not just to be based around ETH. But also be able to access fiat currencies as well (for example, bitcoin).
A number of interesting possibilities for inter-chain and intra-chain asset mobility
Staking on one network with your stake can be used as collateral in another network. This allows you to take your stake with you, and use it as collateral on another chain.
You can also move your stake from one network to another via liquid staking. This means that if the price of ether rises or falls across all networks over time. Then so will its value relative to other assets such as bitcoin or litecoin (assuming those currencies have similar properties).
Why are liquid staking systems important to asset mobility?
Liquid staking systems allow for more efficient staking pools. This allows for the trading of pools outside of the networks they are held on. This increases liquidity in both tokens and pools and decreases volatility for users.
Liquid staking is a way to stake your tokens, which allows the token holder to sell their stake back onto other networks. This can be done through liquid trading pools or exchanges. The model of owning a stake in a network is perhaps best compared to the idea of buying stocks in a company. Each stake represents an equal share of ownership in the network. The token holders can trade those stakes with each other.
Liquid Staking Empowers Users
In some ways, this new feature is similar to traditional staking schemes in that it gives users access to their tokens but on steroids. For example, if you own 100% of an asset. Then you are able to use it at any time without having to wait for others who also hold 100%+ shares before being able to use those assets themselves. This could lead us down some interesting paths where companies will start developing products specifically tailored towards allowing users like yourself greater control over what goes into them.
The takeaway from this article is that liquid staking is allowing for more efficient staking pools and will eventually lead to the ability to trade pools outside of the networks they are held on. This can be seen as a key step towards asset mobility. This will allow investors to take their assets from one network and place them in another without having to lose liquidity or pay any fees.
The idea of staking a network and being able to trade the stake with others is a very interesting one. It does have some limitations, namely that you cannot convert this type of stake into any other asset. But it’s an interesting concept nonetheless. Particularly when considering how much work it takes to move money around between different platforms.