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4 min readBasics

What Is Liquid Staking?

Learn how liquid staking works, how it compares to staking directly, and how PlunderSwap's pZIL compounds your ZIL staking rewards automatically.

By PlunderSwap Team

What Is Liquid Staking?

Introduction to Liquid Staking

With liquid staking, you stake your tokens through a pool and receive a liquid staking token (LST) in return. The LST represents your share of the pool and earns staking rewards for you, without you having to manage the stake yourself.

Staking Directly vs. Liquid Staking

Staking Directly

  • Manual Rewards: You claim rewards and restake them yourself, paying gas each time.
  • Non-Transferable: Your stake is tied to the staking contract and can't be moved.
  • Unbonding Delays: Withdrawing your stake comes with a waiting period.

Liquid Staking with pZIL

  • Receive pZIL: When you stake, you get pZIL, which represents your share of the pool.
  • Auto-Compounding: Rewards are added to pZIL's value every hour and re-staked by the pool, with nothing to claim.
  • Transferable: pZIL is a standard ERC-20 token you can hold or transfer, and DeFi protocols can integrate it.

How Liquid Staking Works on PlunderSwap

  1. Stake ZIL: Deposit at least 100 ZIL into PlunderSwap's staking contract.
  2. Get pZIL: Receive pZIL at the current pZIL/ZIL exchange rate.
  3. Earn Yield: As the pool earns rewards, the value of each pZIL increases.
  4. Hold pZIL: It's a standard ERC-20 token in your wallet that keeps earning.
  5. Unstake Anytime: Burn your pZIL and, after an unbonding period of about 6 days, claim your original ZIL plus earned rewards.

Key Benefits

  • Hands-Free Compounding: No claim or restake transactions, and no gas spent managing your position.
  • Transferable Stake: Earn rewards while holding a token you can move between wallets.
  • DeFi Ready: A fixed-balance ERC-20 token that protocols can integrate easily.
  • Simple Accounting: Rewards show up as a rising exchange rate, not a stream of new tokens (consult your tax advisor about how this applies to you).

Risks and Considerations

  • Smart Contract Risk: Smart contracts can have bugs, and the staking contract is upgradeable by the PlunderSwap team.
  • Validator Risk: The pool currently delegates to a single validator; downtime reduces rewards.
  • No Secondary Market Yet: There are currently no pZIL liquidity pools, so exiting means unstaking and waiting out the unbonding period of about 6 days.
  • Regulatory Uncertainty: Laws are evolving, so make sure you comply with local rules and tax obligations.

Final Thoughts

Liquid staking lets you earn ZIL staking rewards without managing them: stake once, hold pZIL, and let rewards compound.

Ready to start liquid staking? Head to our staking page to begin.