Ankr Liquid Staking
Liquid Staking solves the problem of locked up liquidity when staking assets on Proof-of-Stake networks.
Staking rewards from Proof-of-Stake networks can be one of the most stable streams of income available (in percentage terms). However typically you have to wait until the end of the staking period to get your staking rewards.
Liquid Staking provides instant liquidity for staked assets in the form of Liquid Staking tokens. Liquid Staking tokens represent the value of your staked assets but the tokens are portable, accessible and thus liquid. They can now be utilized in a number of ways.
Provide liquidity on Decentralized Exchanges Pairs of tokens for example Liquid Staking token ankrAVAX (ex-aAVAXc) and native AVAX can be deposited in liquidity pools on a number of DEXs such as Uniswap. By providing liquidity, you can earn additional rewards. As more people trade, you can earn a share of transaction fees (Liquidity Mining), on top of your AVAX staking rewards from ankrAVAX.
Receiving additional tokens from DEXs By providing liquidity, you also have the possibility of receiving farming rewards or tokens on top of Liquidity Pool tokens, representing your share of a liquidity pool on a DEX.
Earn more yield You can harvest the farmed tokens and stake those tokens as well to earn more yield, or simply sell them to buy more AVAX and to generate more yield. Repeating this operation periodically can add a compounding effect to yield.
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Liquid Staking is available on the following platforms:
- Ethereum Mainnet
- Polygon (on both Ethereum and Polygon)
- SSV (Ethereum Goerli)
Liquid Staking tokens
Liquid Staking supports reward bearing tokens.
Reward bearing tokens represent the staked asset plus all future staking rewards. They don't grow in number but grow in value. For example, the fair value of 1 ankrAVAX token vs. AVAX increases over time as staking rewards accumulate, i.e., 1 ankrAVAX becomes worth increasingly more than 1 AVAX.
How do I get Liquid Staking tokens?
Liquid Staking tokens are automatically issued to your Ankr Staking Dashboard when you successfully stake assets such as ETH, AVAX, FTM, and more.
AVAX Liquid Staking tokens — ankrAVAX and AVAX pairs can be used to provide liquidity to ankrAVAX/AVAX liquidity pools on Decentralized Exchanges (DEXs). As more people trade, you can earn a share of transaction fees (Liquidity Mining), on top of your AVAX staking rewards from ankrAVAX.
By providing liquidity, you also have the possibility of receiving farming rewards on top of Liquidity Pool tokens, representing your share of a liquidity pool on a DEX.
You can harvest the farmed tokens and stake those tokens as well to earn more yield, or simply sell them to buy more AVAX and ankrAVAX to generate more yield. Repeating this operation periodically will add a compounding effect on my yield.
Liquid Staking benefits
The benefits of Liquid Staking depend on your choice of staked asset.
When you stake ETH and receive Liquid Staking tokens ankrETH, the main benefit is the liquidity as it is not possible to unstake ETH for the moment until phase 1.5 of Ethereum 2.0. It is, however, possible with other Liquid Staking tokens, such as ankrAVAX, ankrETH, ankrFTM, ankrMATIC.
2. Elastic supply
For chains that allow unstaking such as Avalanche, the benefit is the elastic supply of Liquid Staking tokens.
Elastic Supply Tokens work in such a way that the circulating supply expands or contracts to offset changes in a token's price via rebasing. When you stake AVAX and receive Liquid Staking tokens ankrAVAX, the circulating supply of ankrAVAX increases. When you want to unstake your AVAX, you must return your ankrAVAX to Ankr Staking. Your ankrAVAX is burnt and AVAX is returned to you. The circulating supply of ankrAVAX decreases.
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