LSDFi Summer is coming, quickly understand 6 LSDFi projects worthy of attention

Different projects are now competing to create more extensive and usable features for their LSD, including not only traditional DeFi components such as DEX, but also income strategies, stable coins, and yield speculation that utilize LSD's unique attributes.

Written by: Hei Mi, Bai Ze Research Institute

The total locked value (TVL) of LSDFi exceeded 380 million US dollars, the tokens of projects such as Pendle and Lybra rose sharply, and the narrative of LSD and LSDFi became popular again.

After the Ethereum Shapella upgrade, the LSD (Liquid Staking Derivatives) protocol and the LST (Liquid Staking Token) concept swept the DeFi world, not only as a channel for ETH pledgers to exit the pledge status at any time, but also as a channel for holders It provides a new way to earn income and improve capital utilization in addition to transactions. Many old and new DeFi are beginning to develop related businesses towards LSD.

The "involution" of pledge volume and liquidity has inspired the emergence of more innovative strategies, and different projects are now competing to create broader and more usable functions for their LSD, including not only traditional DeFi components such as DEX, but also Yield strategy, stable currency, yield speculation utilizing LSD's unique attributes.

These new DeFi built on the LSD protocol are LSDFi.

This article will sort out 6 LSDFi projects worthy of attention.

1. Lybra Finance: Stablecoin backed by LSD

The selling point of Lybra Finance is that it allows holders to obtain the 7.2% APY automatic interest-bearing stablecoin $eUSD in real time.

"Give you a stablecoin, as long as you hold on to it, it will multiply in your wallet."

To mint $eUSD, you need to deposit ETH or stETH, and the protocol will distribute the proceeds generated by stETH to holders of $eUSD. In other words, by depositing ETH or stETH into the protocol and minting $eUSD, you can earn about 8.3% APY.

Due to the recent popularity of Lybra Finance on Twitter, the price of $LBR has risen wildly, and it has also attracted more and more people to get rewards by minting $eUSD.

2. Pendle: Interest Rate Swap Market

Recently, Pendle's TVL reached an all-time high, approaching $100 million.

The idea of Pendle is to give users the opportunity to use assets and their earnings separately.

In Pendle, yield assets are divided into two parts: Principal Tokens ( PT ) and Yield Tokens ( YT ). PT represents the principal of the yielding asset, and YT represents the yield portion of the yielding asset. YT and PT can be traded on Pendle AMM.

For example, depositing 1 stETH will mint 1 PT-stETH and 1 YT-stETH, among which, 1 PT-stETH can be redeemed for 1 stETH, and 1 YT-stETH can allow you to get 1 ETH (stETH) deposited in Lido of all earnings.

If you are a low-risk investor who pursues stability, you can buy PT with the income removed to earn fixed income; if you are an interest rate trader and think that an asset may rise, you can buy YT.

During the meme season last month, a large number of Ethereum transactions resulted in higher rewards for validators, that is, higher staking returns. If you buy YT in advance, it can bring huge benefits.

3. Asymetrix: LSD Profit Lottery

Asymetrix is a decentralized, non-custodial protocol designed for the distribution of asymmetric rewards from staking, aiming to make Ethereum staking more exciting and attractive for small players. (Traditional ETH staking is not as rewarding for small players holding small amounts of ETH due to lower yields)

Assuming 100 users deposit 1 stETH each, there will be 100 stETH in total. These stETH will produce 5 stETH as a pledge reward within 24 hours, and then the 5 stETH will be randomly assigned to a participant.

Just like a lottery, even if you only deposit a small amount of stETH, you have the opportunity to win a high reward, or no reward.

But no matter what the result is, depositors can get the corresponding governance token ASX as a reward.

4. Index Coop: LSD Index

Index Coop is a protocol managed by DAO, which mainly provides users with structured DeFi products and strategic tokens.

With the current development of the LSD protocol and LST, Index Coop provides ETH holders with two index tokens to simplify the process of earning income: Diversified ETH Staking Index ($dsETH) and Compound Interest ETH Index ($icETH ).

dsETH：

With more and more LSD protocols emerging, it is difficult for some stakers to choose in terms of yield.

Since these LSD protocols and LSTs are based on the Ethereum mainnet, it can be costly to deposit ETH into multiple LSD protocols or purchase multiple LSTs from the secondary market to diversify investments.

Index Coop solved this pain point by bundling the popular LST into a single ERC20 token, dsETH.

icETH：

Some ETH stakers are keen to accumulate ETH with compound interest.

icETH uses Set Protocol-based leveraged liquidity staking strategy to provide users with higher ETH returns. Users who deposit stETH can receive the same amount of icETH. icETH deposits stETH into Aave v2 as collateral and lends ETH to get more stETH.

Therefore, compared with simply holding stETH, icETH holders not only own stETH spot, but also double the rate of return (variable, because it is affected by the mortgage rate and borrowing costs).

5. 0xAcid: Yield Management Protocol for ETH Long-Term Holders

0xAcid is a relatively alternative revenue management protocol. Its goal is to optimize the returns of stETH, rETH, frxETH and other LSTs by providing a rate of return much higher than that of ordinary LST (4-5%). It is more suitable for users who are bullish on ETH for a long time. .

The native token of 0xAcid is ACID, the supply is unlimited, and the initial supply through the token sale is 7370.

In addition to direct purchases on Paraswap, users can also purchase "bonds" and deposit stETH, rETH, and ankrETH into the treasury to obtain ACID. The user's holding of ACID is equivalent to indirectly holding LST and multiple income in the treasury, because whenever the price of ETH reaches 10,000 US dollars, the agreement will distribute all LST in the treasury to ACID holders.

If the user pledges ACID, he will get sACID 1:1, which is the pledge certificate (unlocked), which can be exchanged for ACID at any time. As a staking reward, stakers not only get the governance token esACID, but also 5% to 10% of the bond sales.

6. Gravita Finance: LSD interest-free loan

Gravita Finance is an interest-free lending agreement with LST as collateral, just like the LSDFi version of Liquity Protocol.

After pledging ETH in the LSD protocol to obtain rETH, wstETH and other LST, deposit it in Gravita, and you can get the stable currency GRAI in return. The stable currency GRAI can also be lent through Graivta for consumption, or deposited in the stable pool to purchase liquidated LST collateral at a discounted price.

Highlights:

a. If the user repays the loan within six months (approximately 182 days), the interest will be refunded proportionally, and the minimum interest is only equivalent to one week's interest.

b. In order to reduce the volatility of GRAI, a redemption mechanism similar to Liquity was developed, allowing GRAI holders to redeem 1 GRAI with $0.97 worth of collateral, which actually incurs a 3% redemption fee.