Currently, ~60% of all circulating AVAX is locked on the P-Chain which secures the Avalanche network. Validators and delegators earn AVAX rewards in exchange for staking (for a minimum of two weeks). AVAX on the P-Chain lacks any additional utility, as it cannot also be used on the C-Chain to take part in the burgeoning Avalanche ecosystem.
Liquid Staking solves this, as it allows users to stake AVAX and receive a new token, yyAVAX, which is an Avalanche C-Chain representation of staked AVAX on P-Chain. Thus users are able to earn both the rewards for securing the network AND take part in the Avalanche DeFI ecosystem. Yield Yak has partnered with Geode and Eden to create a liquid staking token generating industry-leading yield.
Benefits of yyAVAX
Geode is responsible for the yyAVAX smart contracts, which ensure the correct value of yyAVAX based on rewards earned on the P-Chain. To read more about Geode you can view their documentation here.