Staking is a significant element of cryptocurrencies that operate using PoS (Proof of Stake) validation. In crypto exchange, the users earn staking rewards, which mainly come in the form of extra tokens. The staking offers an anticipated income stream but sometimes, it reduces the utility in the wider Decentralized Finance (DeFi) landscape due to its locked nature. A perfect solution for this issue is liquid staking, a game-changing approach in the crypto market that helps users stake their assets while sustaining liquidity.
This article explores what liquid staking is, the top liquid restaking protocols in 2025, what crypto restaking is, and how it works.
Liquid Staking
Liquid staking is a new concept that offers more flexibility than traditional staking and it is a revolutionary tool helping users to attain already staked tokens for another purpose. Liquid staking is a transformative process mainly connected with Proof of Stake (PoS) networks and it monitors the liquidity problems linked with traditional staking. Further liquid staking propagates a mechanism where users collect LSTs (Liquid Staking Tokens) in exchange for their assets and these LSTs include both staking amount and staking rewards. Moreover, Liquid Staking Tokens can be traded, transferred, stored, supported DApps, and also used in DeFi.
Further, the protocol for Liquid Staking has been created on networks such as Polkadot, Ethereum, Cosmos, Avalanche, and Cardano. Liquid staking is appropriate for those attaining the capability to be involved in the projects of Decentralized Finance. On the other hand, the major risk linked to Liquid staking is in the value of synthetic tokens which does not precisely reflect the staked assets. Hence it is relevant to carry out an effective investigation and consider the risk tolerance before determining a staking method.
Additionally, apart from liquid staking, there is one more key mechanism in the world of DeFi (Decentralized Finance) staking that offers distinct ways to improve investment returns and earn rewards from Liquid Restaking. Liquid Restaking emerged from the concept of Liquid staking and it introduced an additional layer of functionality by assisting users to restake their liquid staking tokens. Some of the relevant Liquid Restaking Protocols in 2025 are noted below.
Top Liquid Restaking Protocols In 2025
Etherfi
Etherfi is one of the most effective Liquid Restaking Protocols in the landscape of Decentralized Finance. Etherfi (ETHFI) exploits the PoS blockchain of Ethereum to empower security around other protocols and networks. The main innovative approach that differentiates Etherfi from other liquid staking protocols is it allows users of Ethereum stakers to receive eETH. It was introduced in March 2024 along with an airdrop and assists users in acquiring loyalty points, that may empower their rewards in the future.
Puffer Finance
Puffer Finance provides a distinctive approach to liquid restaking by reducing slashing difficulties and launching a validator that assures rewards despite the performance of the validator. Puffer Finance offers a strong amalgamation of profitability, user easiness, and security, and its sudden development is impacted by a strategic point program to empower user engagement. Further, it highlights the potential of Puffer to restructure Ethereum’s liquid staking economy.
Stader Labs
Stader Labs is referred to as a multi-chain liquid staking protocol that assists users in staking assets around networks such as Solana, Binance smart contracts, and Ethereum. Stader Labs helps to empower both the accessibility and security of liquid staking and its operation simplifies the contribution to the staking economy for both validators and delegators.
Rocket Pool
David Rugendyke introduced Rocket Pool in 2016 with the expectation of transitioning Ethereum from a consensus mechanism of Proof of Work (PoW) to Proof of Stake (PoS). Rocket pool provides users the capability to restake their rETH via EigenLayer (an innovative protocol made on the blockchain of Ethereum) and other services. It mainly concentrates on trustlessness and decentralization where node operators can freely join the staking network.
Solayer
Solayer is the initial restaking protocol that native to the ecosystem of the Solana blockchain and it can be treated as the restaking of protocol that empowers the utility of SOL. Solayer assists in attaining rewards by restaking locket assets via AVSs (Actively Validated Services), persuaded by the Eigen Layer of the Ethereum. Solayer boosts the efficiency and scalability of Solana by exploiting restaking and liquid staking, allowing staked assets to remain active while securing the network.
What is crypto restaking and how does it work?
Crypto restaking is the new concept leveraged in the crypto market, which drives to empower capital efficiency and pluck out more value from staked tokens. Further, this technique enables users to stake the same tokens on the major network and other protocols, securing all of these networks at once.
The distinct types of restaking options are Native restaking and liquid restaking. Liquid staking includes a type of liquid staking in which a staker stakes their tokens and attains a token that describes their stake with the validator. After that, the staker ensues these assets or tokens on the restaking protocol. Similarly, the native restaking is open to users who function as a validator node. Validators who have an interest in engaging their setup to a restaking program will be anticipated to operate and download extra node software needed for the restaking module.
Bottom Line
As the DeFi economy continues to evolve, restaking is anticipated to reach a newer height in the upcoming days. Restaking may offer various advantages, involving the potential of improved capital efficiency and additional compensation. On the contrary, it also comes with various risks, especially in the form of slashing. In the case of restaking, the slashing becomes higher because of the extra engagement made by the staker. However, the liquid restaking offers a promising innovation in the market of DeFi. Hence the investors can potentially empower their crypto earnings by carefully selecting a protocol and being aware of the connected risks. Always carry out a detailed research and consider the risk tolerance before moving to the landscape of liquid restaking.
