Non-custodial liquid staking in Cardano is a concept that allows you to stake your ADA tokens to earn rewards without having to lock them up for a specific period. Here’s a breakdown of how it works:
- Staking: When you stake your ADA, you delegate it to a stake pool, which helps secure the network and, in return, you earn staking rewards.
- Non-Custodial: This means that you retain control over your tokens. You don’t need to transfer your ADA to a third party, and you always have access to your tokens.
- Liquid Staking: Unlike traditional staking where your tokens are locked up and you can’t use them for other purposes, liquid staking allows you to use a derivative token that represents your staked ADA. This derivative can be used in other DeFi activities or traded, giving you liquidity while still earning staking rewards.
In essence, non-custodial liquid staking provides flexibility and liquidity by letting you participate in staking while keeping your tokens in your control and making them usable in other applications.
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