Liquid staking
Also known as: liquid staking derivative, LSD, stETH
Staking crypto while receiving a tradeable token representing the staked position, which can itself create disposal questions.
Definition
Liquid staking lets you stake an asset (such as ETH) and receive a liquid token (such as stETH) representing the staked balance plus rewards, which can be used elsewhere in DeFi. Two tax layers arise: receiving the liquid token in exchange for the staked asset may be a disposal, and the staking rewards reflected in the token are income. Treatment is unsettled, so conservative tracking is advisable.
Example
You stake ETH and receive stETH. Acquiring stETH for ETH may be a disposal, and the rewards accruing in stETH are income — track both.
Jurisdiction notes
- South Africa: No specific SARS guidance; receiving a liquid-staking token may be a disposal and the embedded rewards are income — track conservatively.