Staking liquidity tokens or just tokens. What is the difference?

[CryptoHuff]

What is the difference between a liquidity token and just a token and what is the difference between them when it comes to staking either of them?

[shinratensei_]

What is the difference between a liquidity token and just a token and what is the difference between them when it comes to staking either of them?

You will get LP tokens when you have become the liquidity provider. That means you were adding your tokens to increase the liquidity in the market. The difference should be in the total passive income that you will get from your fund as when you were only staking your coin and you will get only from your staking but when you have been using the LP tokens, you will earn from the fees and your LP tokens. That means you will earn double passive income.

The first should be the fees from becoming the liquidity provider and then passive income from your LP token as it can be used to participate in the liq mining.

[tbterryboy]

I am not really getting your question and what it has to do with staking. If you want to stake your tokens, depending on the exchange or wallet you’re using, they are going to list out the tokens that are available on their platform and the percentage you’re getting in return. You can then choose from there to stake. But to explain the term liquidity, it means that there is much activity (buying and selling) for the token you’re holding.

So, that’s why I said that it doesn’t have anything to do with your staking. When it comes to staking it’s up to the platform you’re staking with to determine the APY; They can decide to give more or less for a particular token, and majority of them give more percentage when you’re holding the platform's token.

[casperBGD]

What is the difference between a liquidity token and just a token and what is the difference between them when it comes to staking either of them?

if you enter your token in a pool as liquidity provider, you will get liquidity tokens, that will earn you interest, and you can exchange them latter for your original tokens

for Uniswap, it goes something like this:
- you have ETH in your wallet
- you want to add liquidity to, for example, ETH-LINK pair
- you exchange half of your wanted quantity of ETH coin for LINK tokens (you want to add equivalent of 1 ETH into the pool, you exhange 0,5 ETH for LINK)
- you approve your LINK token in Uniswap protocol pool
- then add ETH and LINK to the pool (as per current prices - for example 0,5 ETH and 17 LINK)
- based on your stake in the pool, you get UNI-V2 token for ETH-LINK pool, as this one https://defimarketcap.io/token/0xa2107fa5b38d9bbd2c461d6edf11b11a50f6b974

when you want to release your ETH and LINK, you go to Uniswap and in the ETH-LINK pool, you remove your liquidity

[Akiko]

What is the difference between a liquidity token and just a token and what is the difference between them when it comes to staking either of them?

In liquidity tokens you will recieve  a portion of tokens base on how much you add liquidity in that tokens or exchnage while the normal staking will reward you base on the tokens you have in your wallet you will continue  receive rewards as long  you have balance in your wallet. In liquidity when you stop you will not receive a token reward.