Lido is not the only liquid staking game in town anymore.
We have partnered with Tenderize to bring MATIC staking to our Polygon delegators!
The Tenderize smart contract is independently audited by Halborn. All potential issues have been resolved.
Stake MATIC and receive bonus WAGYU rewards too!
Fully liquid. You can unstake any time.
Borrow, collateralize, swap on TenderSwap.
There’s ONLY 2 WEEKS LEFT TO JOIN THE LAUNCH!
Launch is October, 2023.
Join the Tenderize Launch and receive your WAGYU bonus yield by filling out the TYPEFORM here: https://40xcqe14xmu.typeform.com/BlocksUnited
Liquid staking protocols, like Lido, Rocket Pool, and Tenderize allow users to access liquidity while staking their tokens.
The liquid staking provider issues the delegator a derivative token, like a receipt. That derivative token accrues staking rewards and can also be lent out to generate additional yield, or swapped with other tokens.
The biggest benefit of liquid staking is the ability to generate additional yield from staked tokens.
If you were to stake Polygon’s MATIC token, you delegate the token to the network and lose access to it, until you unbond.
Liquid staking providers stake the token for you and issue a derivative as a receipt. You can lend out the derivative token to make additional yield on your position.
Liquid staking tokens can also be swapped for other tokens. The receiver of the swapped liquid staking derivative can trade it in to the liquid staking provider to receive the native MATIC token, plus any accrued rewards.
There is additional risk when liquid staking. You must trust the liquid staking provider and also trust that the derivative will stay pegged to the underlying token.
If the liquid staking provider turns out to be unethical, insolvent, or run poorly, then the liquid staking derivative token may crash in value.
Additionally, liquid staking providers use smart contracts that are at risk of being exploited and hacked.
Do Your Own Research and verify that the liquid staking provider has continual 3rd-party audits of their staking smart contract.
Liquid Staking vs. Staking
Instead of staking your tokens directly with a validator, you would stake through the liquid staking provider.
The liquid staking provider then stakes tokens for you, held in a smart contract, which issues you a derivative token as a receipt.
For example, if you were to stake MATIC tokens using the Tenderize protocol, tMATIC tokens would then appear in your wallet.
The derivative tMATIC tokens are fully liquid and can be traded, held, or lent out to generate additional yield.
Traditional staking usually requires you to lock your tokens onto a network.
Your staked tokens are then used by your selected validator to generate blocks and sign transactions.
To get your staked tokens back you must unbond your stake. Every blockchain ecosystem has different lockup periods and unbonding periods.
Liquid staking on the other hand issues you a derivative receipt token that accrues staking rewards. That derivative token can be returned for your original native tokens, plus accrued rewards at any time. The derivative token can also be swapped, or lent out to DeFi protocols to generate additional yield.
Liquid staking services are the protocols and their platforms that provide liquid staking as a service.
The most well-known liquid staking provider is Lido Finance.
Rocket Pool is another well-known liquid staking provider.
Unfortunately, liquid staking providers are responsible for centralizing power on various blockchains.
Tenderize is a newcomer and intends to help the networks it serves decentralize.
Nothing we say is financial advice or a recommendation to buy or sell anything. Cryptocurrency is a highly speculative asset class. Staking crypto tokens carries additional risks, including but not limited to smart-contract exploitation, poor validator performance or slashing, token price volatility, loss or theft, lockup periods, and illiquidity. Past performance is not indicative of future results. Never invest more than you can afford to lose. Additionally, the information contained in our articles, social media posts, emails, and on our website is not intended as, and shall not be understood or construed as financial advice. We are not attorneys, accountants, or financial advisors, nor are we holding ourselves out to be. The information contained in our articles, social media posts, emails, and on our website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation. We have done our best to ensure that the information provided in our articles, social media posts, emails, and the resources on our website are accurate and provide valuable information. Regardless of anything to the contrary, nothing available in our articles, social media posts, website, or emails should be understood as a recommendation to buy or sell anything and make any investment or financial decisions without consulting with a financial professional to address your particular situation. Blocks United expressly recommends that you seek advice from a professional. Neither Blocks United nor any of its employees or owners shall be held liable or responsible for any errors or omissions in our articles, in our social media posts, in our emails, or on our website, or for any damage or financial losses you may suffer. The decisions you make belong to you and you only, so always Do Your Own Research.