LSTs Explained: Liquid Staking Tokens and How They Change Crypto Earnings
When you stake your cryptocurrency, you lock it up to help secure a blockchain and earn rewards. But what if you could stake your ETH and still use it to trade, lend, or buy NFTs? That’s where LSTs, liquid staking tokens that represent your staked assets while freeing them up for use in other DeFi apps come in. They solve a big problem: the trade-off between earning rewards and staying liquid. Instead of sitting idle, your staked ETH turns into an LST—like stETH or rETH—that you can move around just like any other token.
LSTs are built on top of Proof of Stake, the consensus system that replaces energy-heavy mining with economic incentives to secure networks. Ethereum switched to this in 2022, and now millions of dollars are locked in staking contracts. But without LSTs, those funds are stuck. With them, you’re not just earning 3-5% annual yield—you’re also participating in DeFi, a system of open financial apps that let you lend, borrow, and trade without banks. You can deposit your stETH into a lending pool for extra interest, use it as collateral for a loan, or swap it on a decentralized exchange. It’s like getting paid to hold crypto AND still having full control over it.
The rise of LSTs also ties into how users are thinking about risk and rewards. Projects like Lido and Rocket Pool have made LSTs mainstream, but not all are equal. Some have centralized operators, others are fully decentralized. Some tokens are pegged 1:1 to ETH, others trade at a slight discount. You’ll find posts here that dig into which LSTs are safe, which ones carry hidden risks, and how they stack up against direct staking. You’ll also see how fake airdrops and shady exchanges try to exploit people who don’t understand what LSTs really are. This isn’t theory—it’s real money. People are earning passive income with LSTs every day. But they’re also losing it when they trust platforms that don’t deliver. What you’ll find below are honest reviews, breakdowns of real LST projects, and warnings about scams pretending to be them. No fluff. No hype. Just what you need to know before you stake.