The Rise of Liquid Staking and its Impact on Crypto Markets.
Originally Published 2 years ago — by Forbes
Cryptocurrency exchanges like Coinbase and Binance are holding billions of dollars worth of phantom cryptocurrency pegged to the price of ether, created for use in lending programs. These tokens are just entries in the exchanges’ computers, but to outside observers they appear as assets sitting in their corporate crypto wallets. Liquid staking, a fast-growing innovation in digital assets, allows holders of tokens like ether to use a tracking token for trading while the underlying token is still staked on the blockchain, continuing to earn yield. However, investors have to trust the integrity of the intermediaries and the security of the platforms to safeguard their assets.