Advantages of liquid staking

• Quick access to funds - with liquid staking, you can access your funds almost immediately, which can be useful if there is a downturn in the cryptocurrency market
• Liquid staking helps to optimize the security of interchains
• Increase in revenue - liquid staking offers opportunities for earning additional rewards through liquid tokens
• Different ways of using the liquid tokens earned - these tokens can be used in many DeFi protocols on a particular blockchain, for example, you can use them as collateral on lending / borrowing platforms and borrow additional assets against them, which can then be used for other earning strategies

Disadvantages associated with the use of liquid staking in DeFi

• Possible bug in smart contracts - if there is an error in the code, the protocol can be attacked by hackers and your digital assets can be stolen. The security of these contracts is being improved through better code verification and third-party audits, but hacks are still common in DeFi despite this verification.
• Loss or theft of liquid tokens - without liquid tokens, you can't get your original coins back.
• Numerous scams, rug pulls and projects with no foundation - the fact that anyone can participate in DeFi and anyone can create their own project means that this is very common. Always conduct thorough analysis of a project before you enter it!

How do I choose a suitable platform for liquid staking?

1. Research opportunities and choose the right project for the use of liquid staking. Explore suitable projects and save the ones you find most interesting.
2. Conduct thorough analysis of the team, social networks, etc. Check if the particular project developers have gone through the KYC process. Visit Discord and ask for community references. Monitor the mood in the chat and whether it is friendly or toxic. Last but not least, track their activity on Twitter and take note of how quickly they respond to user issues on Discord.
3. Check if the platform has been audited. Smart contracts on blockchains are publicly available and their code can be checked by anyone. It is these codes that are audited by many reputable companies to help ensure their security. Despite this inspection, which is called an audit, it is possible for a hacker to find bugs in the code that auditors were unable to predict. Not every project that offers liquid staking is truly trustworthy, and past experience has shown that theft can result in major financial damage to users, severely impacting their motivation to continue investing their time and money in digital assets and Web 3.0. Always be prepared to accept a certain amount of risk and diversify your investments wisely. Your main task is to ensure that you are making consistent profits with the lowest risk possible. Always DYOR!
4. The previous points are the most important when choosing a platform. The security of your digital assets always comes first and foremost.

Conclusion

The cryptocurrency world is moving forward and new technologies that provide investors with ways to capitalize their assets come along regularly. One of them is liquid staking, which has given investors another way to earn additional income from investing in cryptocurrencies. This technology has made staking in decentralized finance accessible even to smaller investors, as it is completely free from obligation.
Of course, various risks may lurk for users here as well, which you should familiarize yourself with before investing your money.

Personal Opinion

Liquid staking has contributed to the appreciation of the cryptocurrency market by taking staking one step further and offering many ways to earn passive income instead of letting digital assets sit idly in your cryptocurrency wallet. It comes with a major advantage; namely that you still have liquid access to the value of your originally staked funds. Due to the liquidity staking tokens earned, you can also increase your rewards significantly. The smartest stakers can increase them several times over.
However, beware of the aforementioned drawbacks and always diversify your liquid staking investments carefully, as one scam, rug pull, hack, loss of liquid tokens, or other issue can permanently affect you on your journey in the DeFi world.