# Staking vs. Liquid Staking

### **Staking vs. Liquid Staking**

As the same as the concept of the existing staking of dPoS blockchain, holders of the native staking token of the chain, which is `CRE` in Crescent Network can become validators and can delegate tokens to validators, ultimately determining the effective validator set for the system. This is the staking. Once the tokens of a user are delegated via staking, those are locked and the user cannot swap/transfer/deposit the staked tokens. This means, the user's staked token is not liquidable anymore for a while.  

For the users to also enjoy many utilities (swap/transfer/deposit) with their assets while staking, Crescent Network introduces the concept of `liquid staking`. Once a user stakes `CRE` through liquid staking module, the staked `CRE` is locked but the user receive `bCRE` (pegged staked representative tokens) instead. 

![Staking vs. Liquid Staking](https://3635471947-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FmEYtCuIUIqObZPWrSUQb%2Fuploads%2FsbY0ImMIQtkcnfuLMBHQ%2Fimage.png?alt=media\&token=04aed3d2-6f41-439f-a8af-c4ed8027ae22)

When the delegators want to unstake `bCRE`, the module will burn the `bCRE` and give them `CRE` back, which will be larger amount of `CRE` thanks to the liquid staking rewards during delegation period.

Liquid staking solves the problem of assets remaining dormant by expanding secondary investment opportunities while still giving the user the same power of voting and delegation. This minimizes opportunity cost of traditional staking, which negates an unnecessarily high staking reward rate to pursue more capital-efficient CRE inflation usage for the whole ecosystem:

* Liquid staking results in diversified delegations to liquid staking validators with predefined power weights
* Liquid staking validator group is managed by community governance process