Ethereum's liquid staking services have been pioneered by leading DeFi protocols. These platforms utilize staking pools on Ethereum to give anyone the chance to participate in staking.
Rather than solo staking 32 ETH to a full node, users are able to earn token rewards on as little as 0.01 ETH via staking pools.
This process works by granting stakers tokens that represent their staked ETH, known as Liquid Staking Derivatives (LSDs).
LSDs allow users to retain control of their capital while still earning staking rewards. Stakers can even put their LSDs to work via DeFi protocols in order to maximize yield.
ETH liquid staking has gained significant traction since ETH staking launched in late 2020. The smart contract platform's transition from proof-of-work (PoW) has ushered in a new wave of innovation on the network.