Liquid Staking in 2025: ETH, SOL, and Beyond

Liquid staking is an interesting recent development in decentralized finance. Liquid staking lets you earn rewards while keeping access to your assets through tradeable tokens. Liquid staking’s flexibility has attracted billions in capital across Ethereum, Solana, and other proof-of-stake networks. If you want to participate, you need to understand how liquid staking works, which protocols offer the best risk-adjusted returns, how to set up staking through Trust Wallet, and what tax considerations apply.

This guide covers the knowledge you need to start liquid staking safely and effectively in 2025.

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Liquid Staking Explained

When you stake tokens traditionally, you lock them up to help secure the network and earn rewards. The downside is losing access to those tokens until the unbonding period ends. Liquid staking solves this problem by giving you receipt tokens that represent your staked assets plus any rewards earned.

When you stake ETH through a liquid staking protocol like Lido, you receive stETH tokens on a one-to-one basis. These stETH tokens can be traded, used as collateral in lending protocols, or deployed in yield farming strategies while your original ETH continues earning staking rewards. Smart contracts then pool individual contributions, delegate them to validators, and distribute rewards proportionally. When you want to exit, you can either redeem your receipt tokens directly through the protocol or sell them on secondary markets.

Protocols to Watch

Liquid staking spans multiple blockchains, with each offering different approaches and trade-offs. On Ethereum, Lido dominates with over 60% market share of the $67.9 billion liquid staking market. Lido's stETH has become deeply integrated across DeFi protocols, making it highly liquid and useful as collateral.

Rocket Pool takes a more decentralized approach, enabling anyone to run validators with just 16 ETH, creating a more distributed validator set while still offering competitive yields. Other Ethereum protocols to watch include Stakewise, which offers individual staking positions, and Coinbase's cbETH for people who prefer institutional backing.

On Solana, Marinade Finance leads with both native and liquid staking options. You can earn over 10% APY on native staking or around 11.8% APY through liquid staking with mSOL tokens. Jito has gained traction by offering additional rewards through maximum extractable value (MEV) capture, providing JitoSOL holders with enhanced yields.

Liquid staking is expanding to Polkadot, Avalanche, Cardano, and Cosmos. Each brings unique features like governance participation, cross-chain functionality, or specialized validator economics.

Yield and Risk Comparison

Current yields vary across networks and protocols. Ethereum liquid staking typically offers 3-4% APY, reflecting the network's maturity and large validator set. Solana liquid staking offers higher yields, with protocols like Marinade providing 6-12% APY depending on network activity and validator performance.

Risk profiles vary by protocol and network. Smart contract risk affects all liquid staking protocols, as bugs or exploits could drain pooled funds. Some protocols mitigate risks through insurance funds, audits, and gradual rollouts of new features. Slashing risk exists when validators misbehave, though most protocols distribute the risk across many validators.

Centralization is another concern. Lido's dominance on Ethereum has raised questions about network health if a single protocol controls too much staked ETH. Newer protocols are addressing centralization concerns through more decentralized validator selection and governance structures.

How to Stake via Trust Wallet

Trust Wallet supports liquid staking through its integrated dApp browser and direct protocol connections. Navigate to the protocol's official website, connect your Trust Wallet, and follow the staking process.

When choosing amounts to stake, start small to test the process. Liquid staking involves smart contracts, and while established protocols have strong security records, beginning with smaller amounts lets you understand the mechanics before committing larger positions.

Tax and Geographic Considerations

Tax treatment of liquid staking varies by jurisdiction. Geographic restrictions also apply to many liquid staking services. Major platforms restrict access from certain jurisdictions including parts of the United States, Canada, Australia, and various other countries, owing to regulatory uncertainty. Before participating, verify that liquid staking is available in your location and understand your local tax obligations.

Building Your Approach

Successful liquid staking balances yield, risk, and your goals. Diversification across protocols and networks can reduce concentrated risk and take advantage of different yield opportunities. Regular monitoring is important even with liquid staking's flexibility. Track validator performance, protocol updates, and any governance proposals that might affect your staking rewards.

The Expanding Opportunity

Liquid staking continues to gain traction as more networks implement proof-of-stake consensus and protocols improve their offerings. Recent regulatory clarity, particularly the SEC's August 2025 guidance confirming that liquid staking receipt tokens aren't securities, has removed uncertainty from the space.

Regulatory support, combined with technical improvements and growing DeFi integration, positions liquid staking as a foundational element of crypto portfolios. The ability to earn staking rewards while maintaining liquidity addresses one of traditional staking's biggest limitations. When you understand the protocols, risks, and proper setup through Trust Wallet, you can participate in liquid staking while maintaining control of your assets.

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Disclaimer: Content is for informational purposes and not investment advice. Web3 and crypto come with risk. Please do your own research with respect to interacting with any Web3 applications or crypto assets. View our terms of service.

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Note: Any cited numbers, figures, or illustrations are reported at the time of writing, and are subject to change.