⚖️What is Liquid Staking?

If you hold SOL one of the fundamental functions of Solana is that you can stake your SOL to a validator in order to receive staking awards (currently ca 7-8% APY depending on which validator you chose). When you do this, you (or your wallet app does for you) create an account called a stake account, which you can think of as where you have locked your SOL and delegated it to a validator. You will earn staking rewards each epoch, but while your SOL sits in your stake account, you cannot use it in Defi - it is "locked".

Liquid staking, however, allows you to receive staking rewards without having to lock your SOL into a stake account. The way it works is that you deposit your SOL to the stake pool (in our case on www.zippystake.org) and you get a Liquid Staking Token (LST) in return (in our case, zippySOL). Under the hood, the SOL that you deposit will get delegated to multiple validators and when staking rewards are generated each epoch these rewards are added to the pool. This has the effect that each epoch zippySOL will increases in value vs SOL. You can think of it as an "exchange rate" that always increases vs SOL.

The zippySOL LST can always be withdrawn from the pool and you will then get SOL according to the exchange rate (that is always increasing with the staking rewards collected from the validators each epoch) in the form of a native staking acount. You can then deactivate the native staking account and next epoch you can withdraw your SOL, which will be a higher amount than what you deposited the pool, depending on how many epochs you have staked for.

As zippySOL is an LST, you can also at any time trade your zippySOL on DEXs to instantly convert into any other Solana token. The exchange rate that you get when trading on the DEX should be very similar to the true exchange rate between zippySOL/SOL, but can be affected by market conditions. If you want to be 100% sure you get the "true" exchange rate you should unstake at zippystake.org.