What are the advantages and disadvantages of mainstream arbitrage schemes on the LSD track?

What are the pros and cons of using mainstream arbitrage strategies on the LSD track?

Rocky, a cryptography researcher, provided an overview of mainstream LSD arbitrage schemes in the market, including exchanging ETH collateral for xxETH, further arbitrage with xxETH, and LSD-related data tracking dashboards.

ETH staking for xxETH: 1) LDO (stETH): Advantages are first in market share, strong liquidity, reasonable fees, strong community and user-friendly UX. The downside is that high concentration may bring greater risk coefficient and there is a risk of attack; 2) Coinbase (cbETH): Advantages are a simple and easy-to-learn interface, suitable for beginners. The downside is that cbETH price anchoring is not stable; 3) Rocket Pool (rETH): Advantages are the best decentralized ETH staking protocol with DAO voting governance and self-limiting mechanisms. The downside is low capital efficiency;

4) FXS (frxETH): Advantages are earning revenue from both the CRV and CVX dual systems. The downside is that if the frxETH supply is locked as sfrxETH and the ETH ratio in one of the pools is low, it may face liquidity depletion; 5) Stakewise: Advantages are using a dual token system, but the downside is that it is not as decentralized; 6) Binance staking ETH: Advantages are suitable for beginners, but the downside is that the withdrawal process is slow and BETH does not earn any revenue during the waiting period; 7) Pendle: Advantages are the ability to purchase stETH at a discount of up to 8.83%, but the downside is that the model is complex and may be difficult for ordinary users to understand.

xxETH arbitrage: 1) Pendle: APR is 10%-60.9%, advantages are purchasing discounted ETH, USDC and providing liquidity to earn the highest revenue; 2) unshETH: APR is 5.2%-27.12%, advantages are supporting mining rewards for multiple ETH staking tokens; 3) sfrxETH: APR is 5.88%, advantages are that holders of frxETH can earn additional staking revenue by depositing tokens into the sfrxETH insurance pool; 4) Curve: APR is about 3%, advantages are the pool with excellent liquidity of stETH/ETH and providing liquidity mining rewards; 5) Flashstake: APR is 5.04%, advantages are staking ETH, LSD tokens and pre-earning revenue.

Reference: https://twitter.com/Rocky_Bitcoin/status/1661392786506289152

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