economy
After Ethereum switched to proof-of-stake, holders could lock up coins to help run the network and earn rewards, but their coins were then tied up and unusable.
A tradable token that represents your staked coins is what liquid staking services introduced. Normally, locking coins up to help validate the network means those coins are unusable for anything else while earning staking rewards, so liquid staking issues the user a separate token standing in for that locked stake, letting them keep earning rewards while still being free to trade or use the substitute token elsewhere.
Printing extra coins for free would simply be inflationary money creation unrelated to solving the illiquidity problem, and banning anyone from selling coins describes a restriction, the opposite of what liquid staking accomplishes by restoring flexibility.
Liquid staking became one of the most widely used activities in decentralized finance precisely because it let people have it both ways, earning steady yield while also using the representative token as collateral elsewhere.
economy
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