The idea of Liquid staking is to help people stake without losing the ability to trade or otherwise use their tokens. This happens by tokenization and issuance of on-chain representations of staked assets - derivative staked tokens are a claim to the underlying staking positions.
How does Liquid staking work in Meta Pool?
Meta Pool makes easy to stake and unstake NEAR tokens. We distribute stake in low-fee, high-performance validators.
Select the amount of NEAR to stake using Meta Pool liquid staking protocol.
In return, you receive liquid NEAR (stNEAR) increasing in value through the staking rewards.
As part of the platform, every liquid unstaker and liquidity provider gets $META governance tokens to participate in the DAO.
You are free to use your stNEAR in DeFi platforms anytime or swap back to NEAR.
In our opinion, liquid staking really shines in solving these protocol design problems of Proof-Of-Stake.
With a fully liquid derivative token, users can freely participate in DeFi generating another layer of rewards on top of staking yields. E.g. Users don’t have to choose between staking or putting liquidity in DeFi, lending protocol etc.
stNEAR tokens can be used for an immediate swap to underlying staked assets, so users don’t have to wait for the regular unstake period to obtain their tokens.
Diversifying across multiple validators minimizes exposure and serves as a slashing insurance against bad performance of a specific validator node.
What is liquid unstaking?
With Meta Pool users can skip the unstaking waiting period by providing a liquidity pool for liquid unstaking. The pool works allowing you to swap stNEAR for NEAR paying a liquidity fee. The fee increases when there's low liquidity in the pool and decreases when the liquidity is abundant.
This simplifies NEAR staking, making staking and unstaking simple and immediate.