Liquid Staking Token (LST)

Overview

A Liquid Staking Token is a transferable token representing cryptocurrency deposited into a proof-of-stake validator or staking protocol.

The LST reflects principal and rewards through balance rebasing, an increasing conversion rate, or separate distributions and can be used in trading, lending, or liquidity pools. Liquid Staking Token (LST) represents a claim on staked or restaked assets rather than the underlying native coin itself. Rewards may appear through balance rebasing, an increasing exchange rate, or a separate reward mechanism. The holder’s economic result therefore depends on the protocol’s accounting model, validator performance, fees, and the path for converting the token back to the underlying asset.

It is distinct from the native asset and from a Liquid Restaking Token, which adds validation exposure to additional services beyond the original blockchain. Liquid Staking Token (LST) is distinct from native ETH or another base asset, from a direct validator balance, and from bridged versions on other networks. integrations must identify the official contract, exchange-rate method, underlying asset, withdrawal route, and any wrapper used for non-rebasing compatibility.

Risks include validator slashing, operator concentration, smart-contract failure, depeg, withdrawal delays, reward changes, bridge exposure, governance, and liquidation when used as collateral. Risks include validator slashing, operator concentration, smart-contract failure, inaccurate exchange-rate accounting, withdrawal queues, liquidity discounts, governance changes, bridge exposure, and cascading liquidations when Liquid Staking Token (LST) is used as collateral.

Applications should record the issuer, underlying asset, exchange rate, staking and withdrawal process, validator allocation, contract, chain, and any wrapped or bridged representation. For Liquid Staking Token (LST), payment and custody systems should record the exact token contract, underlying asset, exchange rate at receipt, current redeemable amount, and chain-specific withdrawal path. If Liquid Staking Token (LST) is accepted for an invoice, valuation and refunds need a clear policy because the token’s amount or exchange rate can change between payment and refund.

Readers can distinguish Liquid Staking Token (LST) more clearly by comparing it with Liquid Restaking Token (LRT) and Liquid Restaked Ether. For Liquid Staking Token (LST), this comparison explains the surrounding workflow without implying that the related concepts provide the same legal claim or technical behavior.