The England international has now entered the final 18 months of his existing contract with Jurgen Klopp's team, who are widely expected to initiate talks over a new deal in the near future.
Alexander-Arnold was promoted to vice-captain behind Virgil van Dijk last summer following the departures of Jordan Henderson and James Milner, and he has already hit double figures in assists during the 2023-24 campaign.
Alongside setting up 10 goals in 29 matches for Liverpool this term, Alexander-Arnold has found the back of the net twice himself, although he is currently on the sidelines with his second knee injury of the year and has not played since February 10.
The 25-year-old was therefore unavailable for the EFL Cup final win over Chelsea or England's upcoming friendlies with Brazil and Belgium, but there is optimism that he will be back in action at the start of April.
Reports last month claimed that Liverpool had scheduled a round of contract talks with the right-back, and the club are confident of reaching an agreement with his camp, in spite of Klopp's impending exit.
However, the Reds are still running the risk of losing their academy star for nothing in 2025 as things stand, and should talks with his representatives break down, the hierarchy may be forced to consider a sale this summer.
According to transfer expert Fabrizio Romano, Real Madrid have been alerted to Alexander-Arnold's uncertain contract situation and are now monitoring developments, and Liverpool are yet to begin talks over extending his contract.
The Merseyside giants are supposedly giving no consideration to a sale at this point, but it is unclear whether Alexander-Arnold is keen to stay at Anfield or would welcome a new challenge at this point in his career.
The 25-year-old has donned the Liverpool colours since 2004 and has made 302 appearances for the club since graduating from their academy, recording 18 goals and 82 assists and clinching seven different pieces of silverware.
Alexander-Arnold boasts winners' medals from the Premier League, Champions League, FA Cup, EFL Cup, Club World Cup, UEFA Super Cup and Community Shield, and he could add a Europa League crown to his CV by the time the season draws to a close.
Fifty-eight of the right-back's assists have come in the Premier League - the joint-most for a defender in the competition's history alongside teammate Andy Robertson - whose future has also been called into question.
The Scotsman's contract runs for just over two more years, but he is apparently being targeted by Bundesliga champions Bayern Munich, who are struggling to make headway in contract talks with Alphonso Davies.
Alexander-Arnold's admirers Real Madrid are believed to be leading the race to poach Davies from Bayern, who have refused to bow to the Canadian's wage demands, but Liverpool are relaxed about Robertson's situation amid interest from Thomas Tuchel's side.
A handful of Reds defenders could still leave this summer, though, including Rhys Williams, Nat Phillips and Joel Matip, who is out of contract in June and may have already played his final game for the club owing to his ACL injury.