Some people get confused about how liquid staking tokens can move freely in DeFi, since it can seem like the SOL behind them must be unstaked or sitting idle in order to stay liquid. If the token is mobile, the assumption is that the stake must be mobile too.
On Solana, this is not how liquid staking works. The SOL that backs a liquid staking token (LST) remains fully staked in the validator set, earning rewards and securing the network at all times. Only the LST moves.
In this article, we will clear up any confusion you may have in this area of LSTs. Let’s get started!
What “Liquid” Really Means
The liquidity in liquid staking comes from the LST itself, not from the underlying staked SOL. When you deposit SOL into a stake pool, that SOL is delegated to validators and becomes part of the active stake that secures the Solana network. It does not move, and it does not become unstaked simply because you transfer or trade the LST that represents it.
The LST functions as a freely transferable receipt of deposit. Because the LST is redeemable for your staked SOL, it has allows you to use the value of your staked SOL in DeFi for yield-earning activities while the actual SOL remains locked staked.
How Stake Pools Keep SOL Actively Staked
Stake pools on Solana maintain precise, onchain accounting for every token deposited into the pool. When SOL enters a stake pool, it is delegated to a validator or across a set of validators. It then earns rewards, contributes to security, and remains part of the network’s active stake until a user explicitly requests a withdrawal.
The LST simply tracks ownership of that underlying stake. It can be transferred, traded, or used in DeFi without affecting how the SOL itself is delegated. The stake does not need to move, and it does not cycle through periods of unstaking and restaking. It remains continuously active, regardless of how often the LST tokens change hands.
Liquidity Without Tradeoffs
The movement of an LST does not change the status of the SOL behind it. The underlying stake remains active, secure, and continuously contributing to the validator set, even as the token moves through DeFi.
This design increases staking participation and strengthens network security. Users gain liquidity without giving up the benefits of staking, and validators receive a broader base of delegated stake.
Your LST may move, but your SOL never stops working for the network.