Liquid Staking

The BNB Liquid Staking mechanism is an enhanced version of staking on the BNB Chain. Typically, it is the Proof-of-Stake (PoS) network that allows users to take advantage of the BNB Chain's features. But BNB Liquid Staking eliminates the need for them to lock their assets up with a central node. This removes the risk of having assets that are now “illiquid” and can't be spent or earned in other places. Liquid Staking solves the problem of locked up liquidity when staking assets on Proof-of-Stake networks.

Staking rewards from PoS networks can be one of the most stable streams of income available (in percentage terms). However, typically users have to wait until the end of the staking period to get your staking rewards.

Liquid Staking provides instant liquidity for staked assets in the form of Liquid Staking tokens.

Liquid Staking tokens represent the value of your staked assets but the tokens are portable, accessible and thus liquid. They can now be utilized in a number of ways.

The main components of BNB Liquid Staking will be:

• Liquidity mining opportunities are enabled by providing liquidity for pools on decentralized exchanges. The first main liquidity pools are expected to be aBNBc/BNB.

• Farming rewards for liquidity providers. Liquid Staking presents several yield farming strategies for users to contribute to liquidity pools and gain a share of the trading fees and governance tokens. These new LP tokens can be used to generate yet another layer of earnings.

• Staking rewards on farmed tokens. After using yield farming strategies, users can also reinvest their farmed LP tokens into more staking opportunities. This is a highly repeatable process as layers of rewards from farming and staking will quickly stack up.

• Yield aggregators/vaults can automate yield farming rewards and enable compounding returns with close to zero efforts from users. This is a great method to maximize users’ passive income.

• More trading opportunities thanks to the elastic supply nature of aBNBc, meaning that users’ could potentially buy aBNBc at a discount on a decentralized exchange and redeem it (unstake it) to extract its fair value back in up to 7–14 days (the BNB Liquid Staking unbonding period).

BNB Liquid Staking will not be using preferred validator nodes to stake the BNB from users. In selecting several suitable and reliable BNB Chain validators, the protocol will make BNB Liquid Staking more decentralized one validator at a time.