What is LSDfi?
LSDfi, or Liquid Staking Derivative Finance, is a type of DeFi protocol that allows users to earn extra rewards by using their locked staking tokens (LSTs) in various DeFi protocols. When participating in DeFi LSD, users receive a new token called the LST token, which represents their locked staking tokens. With LSDfi, users can utilize their LSTs, such as stETH or rETH, to earn additional yield by engaging in activities like loan collaterals or providing liquidity.
Why the Interest in LSDfi?
LSDfi has sparked significant interest in the DeFi space due to the potential for doubling DeFi rewards. By staking assets and utilizing LSDfi, users can earn rewards twice. Additionally, the combined Total Value Locked (TVL) for LSDfi projects has been steadily increasing, reaching over $400 million since March. Moreover, the current staking ratio of ETH is only 16.1%, suggesting room for further growth in LSDfi as more ETH is staked.
Three Interesting LSDfi Projects:
- Raft: Raft is a leading LSDfi protocol that offers the decentralized stablecoin $R, backed by stETH. Without their own token, Raft has seen impressive TVL growth from $1.115 million to $60.69 million in June 2023. The team is working on launching the RAFT token to further decentralize their ecosystem and increase demand for $R.
In conclusion, LSDfi presents an opportunity to maximize DeFi rewards by utilizing locked staking tokens in various DeFi protocols. The increasing TVL and potential for growth in staking ratios make LSDfi an enticing space to explore. Projects like Raft offer unique features and attractive rewards for users.
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