From the beginning of decentralized finance (DeFi) to the crypto space, but failed to address critical problems. This is where LSDfi comes in, which constitutes a set of protocols based on liquidity staking derivatives, covering different aspects of the DeFi ecosystem.
LSDfi gives crypto enthusiasts enhanced flexibility and capital efficiency, bringing liquidity sensitivity with derivative farming. But what are some of the prominent LSDfi projects in the crypto space? We delve into the top LSDfi projects to check out.
What is LSDfi?
LSDfi includes a set of protocols based on Liquid Stake Derivatives (LSD), which make up different aspects of the DeFi ecosystem. Such protocols can include classic deFi components such as decentralized exchanges (DEXs) and lending platforms, as well as more complex projects that take advantage of the unique properties of LSD.
LSD plays a crucial role in driving the growth of the entire DeFi ecosystem. In addition, LSDfi is a logical extension of LSD, paving the way for generating significant revenue while simplifying interactions with LSd projects.
The liquid staking projects provide a solid foundation for LSDfi within DeFi.
Top LSDfi projects to check out
LSDfi increases utility and opens up revenue opportunities for LSD token holders. Here are some of the projects to look forward to.
1. Lybra Finance
LBR, as an LSDfi project, serves as an interest-bearing stablecoin protocol, allowing users to deposit ETH or Lido Staked ETH (stETH) as collateral, against which they can borrow Lybra’s stablecoin, eUSD. They can borrow with up to a collateral ratio of 170%.
To top it off, Lybra Finance allows one as a holder to receive stablecoin $eUsD which automatically carries 7.2% interest. As long as you keep it, you get a stable coin and multiply in turn.
Besides earning by holding, holders can also earn by liquidity in eUSD pools and engage in ETH leveraged long strategies by buying more ETH with eUSD.
This project is worth keeping an eye on as it has been one of the top performers in the LSDfi sector.
2. Gravita protocol
Gravita Finance is an interest-free lending agreement with LST as collateral, much like the LSDfi version of the Liquidity Protocol. After guaranteeing ETH in the LSD protocol to receive rETH, wstETH and other LST, you then deposit it into Gravita. In exchange you can get stablecoin GRAI.
The GRAI is a stablecoin that can be borrowed by Gravita for consumption or deposited into the stablecoin fund to purchase liquidated LST collateral at a discounted price.
As a user, if your loan is repaid within six months, the interest then becomes pro-rata, and the minimum interest is only equivalent to one week’s interest.
As an assurance that the protocol manages the risk posed by the high LTV ratio, Gravita operates with a stability pool that ensures that the GRAI is always backed by sufficient collateral.
3. Fluent
Raft is currently one of the leading protocols in the emerging LSDfi market segment. Each project under this segment has a different way of how they go about earning extra returns. For example, Raft offers $R, which is a decentralized stablecoin pegged to the USD and backed by stETH.
Raft has seen exponential TVL growth in recent months, even when they didn’t have their own token. The team continues to work on a RAFT token, which could further decentralize their ecosystem. Moreover, it will increase the demand to mint more $R.
When you coin $R, you can start using it. This gives a minimum collateral of 120% of stETH. The payment comes at a time that suits you, as such there is no limit.
4. Maverick
With the Maverick Protocol, there is a new framework for decentralized finance. The protocol works to create a highly liquid market that benefits traders, liquidity providers, DAO treasuries and developers.
Maverick protocol works with an automated market maker (AMM) at its core.
Additionally, Maverick allows you to contribute liquidity using your LSD/LST tokens and reap the rewards derived from its associated fees.
With its optimistic outlook, the protocol aims to make itself a top decentralized exchange for LSTs.
In addition, Maverick seeks to address the challenges faced by liquidity providers (LPs) on Uniswap V3, including position management, the lack of directions for LPs and low capital efficiency.
5. Index Coop
Index Coop is a protocol run by a Decentralized Autonomous Organization (DAO), which offers users organized DeFi goods and important tokens. For eth holders, Index Group accommodates two index tokens, dsETH and icETH, which streamline the process of earning rewards.
Most LSD and LST protocols operate on the Ethereum mainnet, making it expensive to deposit on multiple LSD platforms. However, Index Coop comes as a solution and offers a solution by consolidating popular LSTs into a unified ERC20 token, dsETH.
Closure
The LSDfi space continues to evolve, giving rise to more complex and distinct ventures. We see so many interesting things, and it is exciting to witness the developments that lie ahead in this realm.
The DeFi ecosystem continues to expand, and the growing significance of LSDfi underscores the growing demand for sophisticated yield farming opportunities. LSDfi can bring in some newcomers and DeFi enthusiasts who are looking for ways to optimize their investments and achieve higher returns.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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