What is Commonly Staked in DeFi?
In Decentralized Finance (DeFi), staking has become a popular method for users to earn rewards on their cryptocurrency holdings. Commonly staked assets typically include:
1. Native Tokens
Many DeFi projects have their own native tokens that can be staked for rewards. For instance, tokens like ETH (Ethereum) in Ethereum 2.0, CAKE in PancakeSwap, and UNI in Uniswap are frequently staked by users to earn additional tokens or governance rights.
2. Stablecoins
Stablecoins such as USDC and DAI are often staked in liquidity pools or lending platforms, allowing users to earn interest with significantly less volatility compared to other cryptocurrencies.
3. Liquidity Provider (LP) Tokens
When users provide liquidity to decentralized exchanges, they receive LP tokens. These tokens can be staked in various platforms to earn additional incentives, making them a popular choice for DeFi participants.
4. Governance Tokens
Governance tokens like MKR from MakerDAO allow holders to participate in decision-making processes in their respective protocols. Staking these tokens can offer rewards while also giving the staker a voice in governance.
Overall, staking in DeFi not only helps secure networks but also serves as a way for users to maximize their returns on crypto investments.