An entity that accepts tokens from a user and stakes them in a proof-of-stake (PoS) blockchain such as Ethereum and Binance Smart Chain. In return, the user receives a receipt from the liquid staking provider that can be used elsewhere as collateral or for a trade. The receipt is called a "liquid staking derivative" (LSD).
A Liquid Staking Provider Advantage
When users stake their assets in a liquid staking provider, those assets are divided among a large liquid staking pool of validators. Any slashing (fee reduction) due to a single validator's mismanagement or fraud is shared among all participants. See
Ethereum staking,
crypto slashing and
proof-of-stake algorithm.