Definition ∞ Liquid staking volume represents the total amount of cryptocurrency deposited into protocols that issue liquid staking tokens. These protocols allow users to stake their assets in proof-of-stake networks while receiving a derivative token that represents their staked position. This derivative token retains liquidity, enabling participants to utilize their staked capital in other decentralized finance applications. The volume reflects the adoption of this capital-efficient staking method.
Context ∞ Liquid staking volume is a rapidly expanding sector within decentralized finance, offering participants flexibility not available with traditional staking. The growth of this metric indicates increasing demand for yield-generating opportunities that do not compromise asset liquidity. Discussions frequently address the security implications and potential centralization risks associated with major liquid staking providers.
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