Liquid staking
Staking ETH without lockup. You get a token (stETH) you can still use.
Classic ETH staking (32 ETH per validator) locks your funds, you can't move them until you exit. Liquid staking is the bypass: you deposit ETH to Lido (or Rocket Pool), get stETH 1:1, which keeps accruing rewards. You can use stETH in DeFi: as collateral, in pools, or sell it. Lido controls 25%+ of all staked ETH, raising concerns about Ethereum's decentralization.
In plain words
Classic ETH staking locks your funds, you can't move them until exit. Liquid staking is the bypass: you deposit ETH into Lido, receive stETH 1:1 that keeps accruing rewards. You use stETH further in DeFi (as collateral, in pools, for trading). It is the best of both worlds. Lido handles most of the market, raising centralization concerns.
Example
Lido stETH: 9M+ ETH (~$30B), 3.2% APY, used everywhere in DeFi.
Also known as: lst, lido, steth