What is Staking Derivative?

A staking derivative is a financial instrument that is typically employed within specific types of decentralized finance (DeFi) blockchain protocols. Staking derivatives leverage staking, or the deposit of assets into a blockchain protocol to accrue regular financial rewards, in a derivative form, usually through a Proof-of-Stake (PoS) blockchain protocol. Staking derivatives are often given a prefix in front of the traditional token name, such as "cTokens" that represent other assets like ETH (in the form of cETH) within the Compound blockchain.