What it means
Staking a token through a protocol that gives you a tradable token in return, so your stake stays usable.
For example, ETH staked through Lido gives stETH, which earns staking rewards and can be used elsewhere in DeFi.
How it works
It adds the protocol's own risk on top of staking.
Related terms
| Term | What it means |
|---|---|
| Staking | Locking tokens to help secure a proof of stake network, in return for rewards. |
| Token | A unit of value recorded on a blockchain, which can stand for money, a vote, a share of a pool or anything else. |
| Composability | The way DeFi protocols can plug into each other like building blocks, because they all share one public blockchain. |
This glossary explains terms in general. It isn't investment, tax or legal advice.