Liquid staking is a rapidly growing solution for locking up a user’s tokens and contributing to the security of proof of stake blockchains. With liquid staking, participants can stake directly on a PoS network without compromising their ability to transfer ownership of their staked tokens by generating a transferable liquid staking token (LST), which demonstrates ownership of staked tokens and any network rewards accrued to those tokens.
Whereas traditional methods of staking are subject to bonding and unbonding periods (ranging from days to weeks), liquid staking provides stakers with increased liquidity and capital efficiency. Token holders stake their token and receive a receipt token as evidence of their ownership of their staked token. The receipt token can be
Liquid staking can often be shrouded in jargon, but at its core the technology is simple to understand. Liquid staking is a software solution that enables users to stake directly on a proof of stake (PoS) network such as Ethereum, and receive a liquid staking token (LST) programmatically minted by the protocol when the user stakes. This LST provides access to liquidity while the user stakes.
Source and more info: What is liquid staking? · Liquid Collective.