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Hey Norioners! 👋 We have a great thread for you! 😎🎉 Topic: LSDFi and #ETH Staking, what is it? 🧐 Grab a drink of choice and enjoy! ☕️
We're waiting for your feedback. 🙌
❤️+♻️ + 💬
🧵 1/23 ⬇️
We're waiting for your feedback. 🙌
❤️+♻️ + 💬
🧵 1/23 ⬇️
🧵2/23 ➡️ From PoW to PoS:
Proof-of-stake: validators stake capital in the form of ETH into a smart contract on Ethereum. This staked ETH then acts as collateral that can be destroyed if validator behaves dishonestly or lazily.
➡️Staking to earn a yield while securing the network
Proof-of-stake: validators stake capital in the form of ETH into a smart contract on Ethereum. This staked ETH then acts as collateral that can be destroyed if validator behaves dishonestly or lazily.
➡️Staking to earn a yield while securing the network
🧵3/23 ETH staking started in December 2020 and was lock for almost locked for 2 years and half. ⏲️
In the meantime, stakers earned an APY which was variable, according to the amount of ETH staked in the staking contract.
Unlock of staked ETH occured on April 12 2023. 📅
In the meantime, stakers earned an APY which was variable, according to the amount of ETH staked in the staking contract.
Unlock of staked ETH occured on April 12 2023. 📅
🧵4/23 Type of staking:
1⃣Solo-staking: Needs a computer connected to the internet 24/7, 32 ETH.
2⃣Staking as a service: Needs 32 ETH, no need for a computer as a 3rd party is here for you
1⃣Solo-staking: Needs a computer connected to the internet 24/7, 32 ETH.
2⃣Staking as a service: Needs 32 ETH, no need for a computer as a 3rd party is here for you
🧵5/23 3⃣Pooled staking: Stake any amount, no need for a computer. Most popular option. Most popular ETH staking platform: Lido, Coinbase, Binance, Kraken, RocketPool, StakeFish.
🧵6/23 Major problems are: By locking my ETH, I can’t generate more yield with them and they are locked. Am I willing to do that? (and especially for a long amount of time when it comes to the first stakers)
That’s how LSD happened. 🙌
That’s how LSD happened. 🙌
🧵 7/23 ➡️ Liquid Staking Derivates: “Tokenized representation of staked assets in the blockchain network”.
➡️Why? ETH staked were locked for an unknown amount of time, and stakers wanted to be able to use their ETH.
➡️Why? ETH staked were locked for an unknown amount of time, and stakers wanted to be able to use their ETH.
🧵8/23 ➡️ Staking platform issued their own LSD tokens 1:1 with the ETH staked
➡️Who? Here are the top 10 LSD platform per TVL. Popular LSD ETH are: stETH (Lido), rETH (Rocket pool), frxETH (Frax Ether) and SETH2 (StakeWise). LSD are yield bearing tokens
➡️Who? Here are the top 10 LSD platform per TVL. Popular LSD ETH are: stETH (Lido), rETH (Rocket pool), frxETH (Frax Ether) and SETH2 (StakeWise). LSD are yield bearing tokens
🧵9/23 Type of LSD Tokens:
1⃣Rebasing token: Lido.
2⃣Reward-Bearing token: Coinbase, Rocket Pool use it.
3⃣Base token + Reward token: StakeWise use it. Base is sETH2 reward is rETH2 both being 1:1 with ETH.
1⃣Rebasing token: Lido.
2⃣Reward-Bearing token: Coinbase, Rocket Pool use it.
3⃣Base token + Reward token: StakeWise use it. Base is sETH2 reward is rETH2 both being 1:1 with ETH.
🧵10/23 4⃣Base token + Reward-Bearing tokens: Frax do this through frxETH and sfrxETH.
🧵11/23 Since ETH Shanghai, what happened?
🧵12/23 What’s the point? 🤔
Stakers are looking to maximize their yield from their assets. Having these LSD ETH gives them more opportunity to earn a yield on top of the Ethereum Network yield!
LSD are created to makes stakers earn more yield
From there, LSDFi appears…
Stakers are looking to maximize their yield from their assets. Having these LSD ETH gives them more opportunity to earn a yield on top of the Ethereum Network yield!
LSD are created to makes stakers earn more yield
From there, LSDFi appears…
🧵13/23 The LSD market size is currently above $17bn, and growing. And a market is growing to use these LSD assets and maximize the yield associated. 💰
🧵 14/23 So what is LSDFi?🧐
LSDFi is the set of DeFi protocols that are using LSD tokens as a lego in their construction. That means they are using LSD ETH in DEXes, Lending and Borrowing, and more complex protocols.
Moreover, there are also protocols building on top of LSDs.
LSDFi is the set of DeFi protocols that are using LSD tokens as a lego in their construction. That means they are using LSD ETH in DEXes, Lending and Borrowing, and more complex protocols.
Moreover, there are also protocols building on top of LSDs.
🧵 15/23 Let’s break this down
1⃣Old DeFi protocols
2⃣LSD Basket
3⃣LSD Yield Strategies
4⃣Yield Marketplace & Upfront Yield
5⃣LSD-backed Stablecoins
These aren't financial advices. You should always be careful with these protocols, they're mainly experimentation and bear risks.
1⃣Old DeFi protocols
2⃣LSD Basket
3⃣LSD Yield Strategies
4⃣Yield Marketplace & Upfront Yield
5⃣LSD-backed Stablecoins
These aren't financial advices. You should always be careful with these protocols, they're mainly experimentation and bear risks.
🧵16/23 1⃣Old DeFi protocol→ DEX Pairs:
Pair your LSD assets and earn fees from transactions (any DEX)
→ Lending/Borrowing: Lend your LSD assets and earn a yield (Aave)
→ Yield strategies: Buy tokens that hold LSD assets to be exposed to asset yield (yearn.fi)
Pair your LSD assets and earn fees from transactions (any DEX)
→ Lending/Borrowing: Lend your LSD assets and earn a yield (Aave)
→ Yield strategies: Buy tokens that hold LSD assets to be exposed to asset yield (yearn.fi)
🧵17/23 2⃣LSD Basket
These protocols are creating baskets of LSD assets (Often top LSD ETH) in order to diversify the yield and push validator decentralization.
Yield comes from ETH yield, swap fees, and mint/redeem fees!
Ex: @indexcoop & dsETH, and @unsheth_xyz & unshETH
These protocols are creating baskets of LSD assets (Often top LSD ETH) in order to diversify the yield and push validator decentralization.
Yield comes from ETH yield, swap fees, and mint/redeem fees!
Ex: @indexcoop & dsETH, and @unsheth_xyz & unshETH
🧵18/23 3⃣LSD Yield Strategy
Protocols that create strategies around the LSD assets to generate more yield. Strategies include: Diversification, uses of other DeFi protocols, reinvest staking rewards.
They look like hedge funds managing your ETH for you.
Ex: @0xAcidDAO
Protocols that create strategies around the LSD assets to generate more yield. Strategies include: Diversification, uses of other DeFi protocols, reinvest staking rewards.
They look like hedge funds managing your ETH for you.
Ex: @0xAcidDAO
🧵19/23 4⃣Yield Marketplace and Upfront Yields
This is composability. LSD assets are composed of the principal (ETH) and the yield. These protocols allows you to break these in two pieces and play with them.
Ex: @pendle_fi & @Flashstake
This is composability. LSD assets are composed of the principal (ETH) and the yield. These protocols allows you to break these in two pieces and play with them.
Ex: @pendle_fi & @Flashstake
🧵20/23 5⃣LSD-Backed Stablecoins
Mint stablecoins with LSD as collateral. This might be a good idea since LSD are yield bearing token, meaning they generate extra-value. This creates yield-bearing stablecoins.
Ex: @LybraFinanceLSD, @agility_lsd, and @raft_fi
Mint stablecoins with LSD as collateral. This might be a good idea since LSD are yield bearing token, meaning they generate extra-value. This creates yield-bearing stablecoins.
Ex: @LybraFinanceLSD, @agility_lsd, and @raft_fi
🧵21/23 And now we are waiting for the next innovation in the LSDFi space! We’ll keep you updated with what happens!
Stay safe out there and stay tuned!🔥😎
Stay safe out there and stay tuned!🔥😎
🧵22/23 It's a wrap! We hope that you enjoyed this thread! Let us know in the comments if it was interesting and what thread we should write next!
🧵23/23 Our sources:
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➡️docs.frax.finance/frax-ether/frx…
➡️dune.com/hildobby/eth2-…
➡️coindesk.com/layer2/2022/04…
➡️
https://twitter.com/LandfSmile/status/1659859171683213312
➡️
https://twitter.com/0xYugiAI/status/1660729431999254528
➡️
https://twitter.com/CryptoNikyous/status/1641351238888624128
➡️docs.frax.finance/frax-ether/frx…
➡️dune.com/hildobby/eth2-…
➡️coindesk.com/layer2/2022/04…
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