Staking has become the cornerstone of DeFi in Proof-of-Stake blockchain networks. In TON, over 550 million Toncoin, worth $3 billion, is currently staked. This high Total Value Locked (TVL) reflects staking's importance for network security and the rewards it offers.

In this article, we’ll explain:

• How TON staking works.

• What liquid staking is.

• How to maximize staking rewards using DeFi on TON.

What is Crypto Staking?

Blockchain networks are decentralized systems without central servers for processing transactions. Instead, they rely on validators—independent participants who run nodes to validate transactions, create blocks, and store data. TON currently has over 370 validators.

To become a validator, participants must stake a minimum of 300,000 TON by locking it in a staking contract. This grants them validator rights and allows them to participate in securing the network.

Where Do Staking Rewards Come From?

Validators earn rewards for their work:

• 1.7 TON per block created.

• Transaction fees from blocks they validate.

On average, active validators collectively earn 50,000 TON daily. Validators with larger stakes are assigned more tasks, enabling them to earn higher rewards.

What is Liquid Staking?

Liquid staking enables users who don’t have the 300,000 TON required to become a validator to still earn staking rewards. Through liquid staking protocols, users can delegate even small amounts of TON to validators and receive a share of the rewards.

How Liquid Staking Works:

• Users deposit their TON into a liquid staking pool.

• The pool delegates TON to validators.

• Validators stake the TON, earn rewards, and return both the staked TON and a share of rewards to the pool.

Liquid staking benefits everyone:

• Users earn rewards without managing a validator node.

• Validators increase their stake, earn more, and bolster TON’s security.

For example, Tonstakers has delegated 45 million TON—6% of the 593 million total staked TON.

Why is it Called “Liquid” Staking?

Users receive Liquid Staking Tokens (LSTs) as proof of their deposit. These tokens represent shares in the staking pool and can be redeemed for staked TON plus accumulated rewards.

Benefits of LSTs:

• LSTs hold clear value (1 LST = 1 TON + rewards).

• They can be used in DeFi applications to earn additional rewards.

What Liquid Staking Pools are Available on TON?

Several protocols provide liquid staking services on TON. Popular LSTs like tsTON and stTON are gaining traction, supported by incentives to boost their utility and liquidity.

How to Maximize Liquid Staking Rewards

The TON Foundation is incentivizing LST liquidity pools on platforms like STON.fi and DeDust. By providing LSTs to these pools, users can earn additional rewards.

For example:

• Swap half of your tsTON for USDT.

• Provide tsTON and USDT to the tsTON/USDT pool on STON.fi.

• Earn trading fees and stake LP tokens in farms to gain even more rewards.

These initiatives aim to promote liquid staking and expand its utility within the TON ecosystem.

Why Consider Staking on TON?

Liquid staking is considered the safest DeFi option, offering stable rewards:

• Rewards are issued directly by the protocol in TON, the most liquid asset in TON’s $13B ecosystem.

• It avoids risks like impermanent loss (common in DEXes) and liquidations (in lending protocols). Protocols like Tonstakers even protect users from slashing penalties.

• Stakers enhance network security by increasing honest validators’ stakes.

LSTs can be used in other DeFi protocols to earn additional rewards.

These advantages make liquid staking a reliable, stable, and secure way to earn in the DeFi space, driving billions of dollars in TVL on TON.