Liquid staking allows users to stake their assets while still retaining liquidity. When you stake tokens, they are usually locked up, meaning you can’t use them until the staking period ends. Liquid staking solves this problem by providing a way to access the value of those staked tokens.Here’s how it works: When you stake your assets, you receive a tokenized representation of your staked position. This token can be traded or used in other financial activities, enabling you to benefit from staking rewards while retaining the flexibility to access your funds.For example, if you stake Ethereum, you might receive a new token that represents your staked ETH. You can use this new token in decentralized finance (DeFi) platforms to earn additional rewards or engage in other investment opportunities. Liquid staking aims to enhance capital efficiency, making it easier for users to participate in staking without sacrificing liquidity. This approach has become increasingly popular as more investors and users seek to maximize their returns while maintaining their ability to access their funds.