When users stake their tokens to provide security and validation in a PoS network, those tokens are locked for the duration of staking. The users can’t use staked tokens for anything else. This is native staking.

In Liquid Staking, a liquid token is generated and given to the user in return of staked tokens for the duration of staking. The liquid tokens could be used in some scenarios like DeFi, effectively making the staked tokens useful while staking.