Liquid Staking on the Fantom Opera network refers to the process of staking cryptocurrency assets while keeping them fungible and tradable. In traditional proof-of-stake (PoS) systems, when users stake their tokens to support the network and earn rewards, those tokens are typically locked up and cannot be easily traded or used elsewhere. Liquid Staking, however, introduces a novel approach that allows users to stake their tokens while maintaining their liquidity.
On the Fantom Opera network, which is a blockchain platform designed for high-speed and low-cost transactions, users can stake their FTM (Fantom’s native cryptocurrency) through a process called “staking as a service.” This involves converting FTM tokens into an equivalent representation, often denoted as stakedFTM or sFTM. These staked tokens are then staked to secure the network and participate in the consensus mechanism.
The unique aspect of Liquid Staking on Fantom is that these staked tokens, despite being used for network security, can still be traded on various decentralized exchanges (DEXs) and utilized within the broader decentralized finance (DeFi) ecosystem. This provides users with the flexibility to earn staking rewards while maintaining the ability to trade and engage in other financial activities with their staked assets.
By enabling liquid staking, Fantom aims to address the liquidity challenges associated with traditional staking models, where locked-up tokens cannot be readily accessed. This innovation not only enhances the fungibility of staked assets but also encourages greater participation in staking activities by making it more attractive for users who want to maintain the ability to use their assets in various decentralized applications (dApps) or trade them on the open market.
Liquid Staking on Fantom contributes to the overall efficiency and utility of the network, as staked tokens continue to actively participate in securing the blockchain while remaining dynamic and accessible in the broader crypto ecosystem. It aligns with the growing trend of interoperability and flexibility in decentralized finance, providing users with more options to optimize their financial strategies.