In the rapidly evolving world of decentralized finance (DeFi), liquid staking and liquid restaking have emerged as groundbreaking innovations that redefine how crypto holders earn yield on their assets. These protocols enhance capital efficiency, unlock liquidity, and open new revenue streams—transforming passive staking into an active, multi-layered financial strategy. As we move into 2025, the adoption of these systems continues to grow across major blockchains like Ethereum, Solana, and Bitcoin.
This guide dives deep into the mechanics of liquid staking and restaking, explores top-performing protocols, and highlights the benefits and risks every investor should understand before participation.
What Is Liquid Staking?
Liquid staking allows users to stake their cryptocurrency while retaining liquidity through a derivative token. Unlike traditional staking—where assets are locked and unusable—liquid staking issues a Liquid Staking Token (LST) that represents the staked asset and can be freely used in DeFi applications.
For example, when you stake ETH via a liquid staking protocol, you receive a token like stETH or eETH. This LST maintains a 1:1 peg with the underlying asset (with minor fluctuations) and earns staking rewards over time. Crucially, it remains tradable, lendable, or usable in yield farming strategies across decentralized platforms.
👉 Discover how liquid staking unlocks hidden value in your crypto portfolio.
Key Benefits of Liquid Staking
- Capital Efficiency: Staked assets continue generating yield while being actively deployed elsewhere.
- Liquidity Preservation: Avoid long lock-up periods; use LSTs across DeFi ecosystems.
- Yield Amplification: Combine staking rewards with additional DeFi yields for compounded returns.
What Is Liquid Restaking?
Building on liquid staking, liquid restaking takes capital efficiency a step further. Pioneered by EigenLayer, restaking enables users to reuse their LSTs (like stETH) to secure additional protocols—known as Actively Validated Services (AVSs)—and earn extra rewards.
When users deposit LSTs into a restaking protocol, they receive Liquid Restaking Tokens (LRTs). These tokens maintain liquidity and can be used across multiple chains and DeFi platforms while simultaneously contributing to network security and earning layered yields.
Restaking introduces a new paradigm: one asset securing multiple layers of infrastructure, all while staying liquid and productive.
Staking vs. Liquid Staking vs. Liquid Restaking: A Comparative Overview
| Feature | Staking | Liquid Staking | Liquid Restaking |
|---|---|---|---|
| Token Usability | Locked until unstaked | Freely usable via LSTs | Fully usable via LRTs |
| Capital Efficiency | Low | High | Very High |
| Yield Potential | Base staking rewards only | Base + DeFi yields | Base + DeFi + AVS rewards |
| Technical Complexity | Simple | Moderate | Advanced |
| Adoption Level | Widespread | Growing rapidly | Early-stage, niche |
While traditional staking remains popular due to simplicity, liquid staking and restaking are gaining traction among yield-optimized investors seeking maximum utility from idle assets.
Top Liquid Staking & Restaking Protocols in 2025
Lido: The Leader in Ethereum Liquid Staking
Lido dominates the liquid staking landscape with over $25 billion in total value locked (TVL). It supports Ethereum and multiple Layer-2 networks including Arbitrum, Optimism, Base, and Avalanche.
Users who stake ETH receive stETH, one of the most widely accepted LSTs in DeFi. With around 2.8% base APY and integration across lending platforms like Aave and Curve, stETH offers seamless liquidity and yield opportunities.
Key Features:
- Multichain support across EVM-compatible networks
- Community governance via LDO token
- High validator performance (over 97% uptime)
- Compatible with restaking protocols like EigenLayer
Lido’s dominance stems from its decentralization, reliability, and deep ecosystem integration—making it ideal for both beginners and advanced users.
Marinade Finance: Liquid Staking Powerhouse on Solana
As the first liquid staking solution on Solana, Marinade Finance offers up to 9.27% APR for SOL stakers. Depositors receive mSOL, a liquid token that can be traded or used in DeFi protocols such as Orca and Raydium.
Marinade optimizes yield by dynamically routing stakes to top-performing validators, minimizing downtime and maximizing returns.
Key Features:
- Native staking and liquid staking options
- Validator optimization algorithm
- Governance via MNDE token
- Over $1.4 billion TVL from more than 140,000 users
Its focus on performance and user experience makes Marinade the go-to choice for Solana-based yield seekers.
Lombard Finance: Bitcoin Meets Real Yield
Lombard Finance brings liquid staking to Bitcoin through the Babylon protocol. Users stake BTC and receive LBTC, a yield-bearing token offering up to 5% APY.
Unlike wrapped Bitcoin variants, LBTC generates real economic yield by participating in consensus mechanisms—bridging Bitcoin’s security with DeFi’s innovation.
Key Features:
- True yield for BTC holders
- Multichain support (Ethereum, Berachain, BOB, etc.)
- Integration with over 55 DeFi platforms
- $640 million TVL with 80,000+ users
Bitcoin has long been considered “digital gold” with no yield. Lombard changes that narrative by unlocking passive income without sacrificing decentralization.
Solv Protocol: Next-Gen Bitcoin Staking Infrastructure
Solv Protocol offers a reserve-backed system for Bitcoin staking, managing over $2.5 billion in BTC assets. It issues SolvBTC.LST, a liquid staking derivative designed for cross-chain DeFi usage.
Backed by institutional-grade custody and smart contract security, SolvBTC.LST is engineered for interoperability and scalability across Ethereum, BNB Chain, Arbitrum, and more.
Key Features:
- Staking Abstraction Layer (SAL) for simplified cross-chain farming
- Support for Eigenlayer restaking
- Universal DeFi compatibility
- Transparent reserve audits
Solv stands out by combining institutional trust with decentralized innovation—ideal for large-scale BTC holders.
Kelp DAO: Multichain Liquid Restaking for LSTs
Kelp DAO enables Ethereum users to restake top LSTs—including stETH, rsETH, and ETHx—across 10+ networks. It offers up to 20% APR by aggregating rewards from multiple AVSs.
Depositors receive KELP-LRT, a liquid token that retains full functionality in DeFi while securing additional protocols.
Key Features:
- Broad LST compatibility
- Multichain availability (Ethereum, Base, zkSync, etc.)
- Community-governed via Kelp DAO
- High-yield restaking with flexible withdrawals
Kelp exemplifies the power of composability in DeFi—turning single-layer staked assets into multi-dimensional yield engines.
Jito: MEV-Optimized Staking on Solana
Jito revolutionized Solana staking by integrating Maximal Extractable Value (MEV) into its validator operations. Users stake SOL and receive JitoSOL, which earns enhanced yields through MEV capture.
With over 15 million SOL staked and an APR exceeding 7%, Jito leads in performance and innovation on Solana.
Key Features:
- MEV-boosted rewards
- Support for liquid restaking
- Governance via JTO token
- Deep liquidity across DEXs
By leveraging MEV—a previously untapped revenue stream—Jito delivers superior returns compared to standard staking pools.
EtherFi: All-in-One Ethereum Staking & Restaking Platform
EtherFi combines liquid staking and restaking under one roof, with over $6 billion in TVL. Users stake ETH to receive eETH, which can be further restaked on EigenLayer-compatible services for amplified yields—up to 20% APY.
Beyond staking, EtherFi offers innovative financial tools like a crypto credit card, allowing users to spend their yield-generating assets directly.
Key Features:
- Native restaking infrastructure
- Multichain support (Ethereum + L2s)
- Additional services: lending, borrowing, credit card
- Strong community engagement
EtherFi represents the future of integrated DeFi platforms—where staking isn’t just about earning rewards but enabling real-world utility.
Why You Should Consider Liquid Staking in 2025
Maximize Capital Efficiency
Traditional staking ties up capital with limited return paths. Liquid staking transforms idle assets into productive ones—earning native rewards while enabling participation in lending, liquidity pools, or collateralization.
👉 See how you can turn static holdings into dynamic income streams.
Gain Financial Flexibility
With LSTs and LRTs, you’re not locked in. Need liquidity? Sell your derivative token. Want higher yields? Deposit it into a leverage farm. The flexibility empowers strategic portfolio management without exit penalties.
Access Advanced Yield Opportunities
Restaking unlocks a new tier of yield generation. By securing AVSs with your LSTs, you earn additional rewards—effectively getting paid twice for one asset.
Risks to Be Aware Of
While promising, these protocols come with trade-offs:
Smart Contract & Security Risks
All DeFi platforms rely on code. Bugs or exploits can lead to fund loss. Always use audited, well-established protocols with strong track records.
Liquidity & Peg Volatility
LSTs may temporarily depeg during market stress (e.g., stETH during the 2022 crash). While rare, this introduces price risk beyond normal crypto volatility.
Complexity & User Error
Managing multiple derivative tokens across chains increases operational complexity. Missteps in approvals or withdrawals can result in losses.
👉 Learn secure best practices before diving into high-yield staking.
Frequently Asked Questions (FAQ)
Q: Can I unstake my assets anytime with liquid staking?
A: Yes—unlike traditional staking, most liquid staking tokens (like stETH or eETH) can be redeemed or sold instantly on exchanges or within the protocol interface.
Q: Are liquid staking rewards higher than regular staking?
A: The base APY is often similar, but the real advantage lies in capital efficiency—you can earn additional yield by using LSTs in DeFi.
Q: Is restaking riskier than liquid staking?
A: Yes—restaking exposes you to additional smart contract risks from AVSs you help secure. However, it also offers significantly higher potential returns.
Q: Can I lose money with liquid staking?
A: Yes—if the LST depegs from its underlying asset or if the protocol suffers a security breach. Always assess risk tolerance before investing.
Q: Which blockchain has the best liquid staking ecosystem?
A: Ethereum leads due to its mature DeFi integration, but Solana is rapidly catching up with innovative platforms like Jito and Marinade.
Q: Do I need technical knowledge to use these protocols?
A: Basic familiarity with wallets and DeFi is recommended. For restaking, a deeper understanding of AVSs and risk models is beneficial.
Final Thoughts
Liquid staking and restaking represent the next evolution of blockchain finance—merging security, yield generation, and capital efficiency into a unified system. Whether you're an Ethereum maximalist, Solana enthusiast, or Bitcoin holder looking for real yield, there’s now a pathway to make your assets work harder.
As adoption grows in 2025, early participants stand to benefit from compounding yields and expanding DeFi integrations. However, success requires due diligence: choose reputable protocols, understand the risks, and stay informed about emerging trends.
The future of staking isn’t just about locking tokens—it’s about unleashing their full potential.