With Its Shared Security Model, Liquid Security Will Fuel Endless Blockchain Innovation
The post With Its Shared Security Model, Liquid Security Will Fuel Endless Blockchain Innovation appeared on BitcoinEthereumNews.com. Liquid security in crypto is all the rage, enabling crypto investors to boost the security of the wider decentralized finance economy by expanding the capital efficiency of staked assets. With restaking, investors can redeploy crypto that has already been staked to secure proof-of-stake blockchains and use that collateral to provide security for a second layer of blockchain-based decentralized applications. The idea builds upon the concept of traditional staking, where users lock up crypto in smart contracts to support blockchain network operations. By staking crypto, users participate in validating transactions, helping to secure the distributed ledger, and ensuring the network operates without problems. Generally, users will need to commit to locking up their tokens for a specified period, during which they cannot be withdrawn. It’s a big commitment, but it’s rewarding, as investors will be repaid with regular rewards. Liquid security goes further, enabling stakers to retain the liquidity of their staked assets and redeploy them to additional dApps and services and boost their security in return for expanded rewards. It’s an attractive proposition, explaining why more than $15.8 billion worth of crypto assets have already been restaked. Securing Blockchain Protocols The dApps and services secured through liquid security are known as Actively Validated Services on Ethereum. They leverage protocols such as EigenLayer, which provides the necessary architecture for investors to restake the “liquid staking tokens” or LSTs they receive in return for their original staked assets. LSTs are a kind of receipt token that allows the staker to retain liquidity even after they’ve locked up their original assets. They are designed to improve capital efficiency. Ethereum, with $9.9 billion in liquid security restaked total value locked, isn’t the only network with a restaking ecosystem. On Bitcoin, protocols like SatLayer make it possible for users to restake Bitcoin on bitcoin-validated-services that…
The post With Its Shared Security Model, Liquid Security Will Fuel Endless Blockchain Innovation appeared on BitcoinEthereumNews.com.
Liquid security in crypto is all the rage, enabling crypto investors to boost the security of the wider decentralized finance economy by expanding the capital efficiency of staked assets. With restaking, investors can redeploy crypto that has already been staked to secure proof-of-stake blockchains and use that collateral to provide security for a second layer of blockchain-based decentralized applications. The idea builds upon the concept of traditional staking, where users lock up crypto in smart contracts to support blockchain network operations. By staking crypto, users participate in validating transactions, helping to secure the distributed ledger, and ensuring the network operates without problems. Generally, users will need to commit to locking up their tokens for a specified period, during which they cannot be withdrawn. It’s a big commitment, but it’s rewarding, as investors will be repaid with regular rewards. Liquid security goes further, enabling stakers to retain the liquidity of their staked assets and redeploy them to additional dApps and services and boost their security in return for expanded rewards. It’s an attractive proposition, explaining why more than $15.8 billion worth of crypto assets have already been restaked. Securing Blockchain Protocols The dApps and services secured through liquid security are known as Actively Validated Services on Ethereum. They leverage protocols such as EigenLayer, which provides the necessary architecture for investors to restake the “liquid staking tokens” or LSTs they receive in return for their original staked assets. LSTs are a kind of receipt token that allows the staker to retain liquidity even after they’ve locked up their original assets. They are designed to improve capital efficiency. Ethereum, with $9.9 billion in liquid security restaked total value locked, isn’t the only network with a restaking ecosystem. On Bitcoin, protocols like SatLayer make it possible for users to restake Bitcoin on bitcoin-validated-services that…
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