Everything you need to know about LSD Summer

All about LSD Summer.

Encryption researcher Finish conducted in-depth research on all possible LSD suppliers and the DeFi LSD solutions built on them, summarized the best investment strategies, and differentiated them based on different risk levels to adjust strategies according to risk.

LSD Suppliers: 1) Lido: Lido offers two tokens, $stETH is a “rebase token” with a continuously increasing balance that earns more $ETH just by holding, but it is more complicated in DeFi applications and tax issues; $wstETH is a “reward token” with a fixed balance that increases in price relative to $ETH, which is more convenient for users; 2) Rocket Pool: Rocket Pool offers users two choices, buying and holding $rETH (similar to $wstETH) to earn profits, or choosing to stake and run a node, with a higher APR and additional $RPL rewards compared to just buying $rETH (6.9% to 3.94%);

3) Frax Finance: The Frax LSD ecosystem consists of $frxETH and $sfrxETH. $frxETH can be minted 1:1 with $ETH, and by staking it for $sfrxETH, users can earn profits, and the price of $sfrxETH increases over time. As validators earn staking rewards, equivalent $frxETH is minted and added to the treasury, and users can redeem $sfrxETH for more $frxETH than deposited, achieving automatic compound interest. Another strategy is the Curve $frxETH/$ETH pool, with a similar APR to staking; 4) Stake Wise: Deposited $ETH is tokenized into $sETH2, and token holders receive equity pool rewards. Rewards and penalties generated by the pool are distributed proportionally to stakers based on their shares; 5) CEX LSD: Staking solutions provided by CEXs such as Binance, Coinbase, Kraken, etc., are relatively simple but require a balance of fund ownership.

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DeFi projects: 1) Lybra Finance: Its interest-bearing stablecoin $eUSD allows holders to receive a real-time APY of 7.2%. To mint eUSD, one must deposit $ETH/$stETH and convert it to $stETH to generate returns and distribute them to eUSD holders, thus earning the staked $stETH yield and a higher APY simultaneously; 2) Pendle: PT (Principal Token) and YT (Yield Token) are used for assets and income respectively, allowing users to purchase them separately; 3) Instadapp: A DeFi smart wallet that offers one-click staking solutions, with an APR of 6.80% and a 16.365% share;

4) UnshETH: Provides diversified liquidity staking for an $ETH basket, earning $ETH returns and swap fees. Everything is packaged in $unshETH, which can be minted by depositing LST, or redeemed back into the underlying LSD basket; 5) Asymetrix: A decentralized non-custodial protocol designed for asymmetric yield distribution from staking pools, with earnings generated once every 24 hours and distributed randomly and asymmetrically to pool participants;

6) Alchemix: Users deposit yield-generating assets into other DeFi protocols and then use them as collateral to mint the protocol’s synthetic stablecoin $alUSD. The minting process creates a loan that is automatically repaid over time using the generated yield from the deposited assets; 7) Gravita: Provides users with interest-free loans, charging a one-time fee of up to 0.5% for positions held for over six months, eliminating the need for continuous monitoring of sudden APR increases; 8) Flashtake: There are three main types of pools, with the yield pool generating income from its sources and redirecting it to the pool. The liquidity pool allows individuals to add liquidity for the TBD token. The boost pool allows anyone to deposit assets directly and subsidize the cost of launching the Time Vault.

Reference: https://twitter.com/0xFinish/status/1664298489017417728

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