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LRT track growth slows, is the points system the “original sin”?
The crypto market has always emphasized capital efficiency, and in such an environment, liquidity never sleeps. We can believe that the rise of the LRT track stems from the market's ultimate pursuit of liquidity efficiency, through continuous nesting, from ETH native staking to LSD to LRT.
From the user's perspective, the logic of LRT is to capture more profits by setting up more layers, that is, to kill two birds with one stone. From the overall model of the early LRT market, LRT income consists of three parts: ETH Staking income (LSD, this part of the yield itself is relatively low), Eigenlayer points airdrop income, and LRT project points airdrop income. In addition, users can further pledge the LRT tokens they have obtained to some pre-market trading markets to further obtain additional multiple points rewards.
Although this method was effective in the early days and staking users were quite receptive, as Eigenlayer and some LRT projects like Puffer completed their early airdrops, many users found that the expected returns from the points gained were not favorable.
Firstly, the proportion of staked shares among most users is too low, resulting in poor overall capital efficiency from a yield perspective.
Secondly, the airdrop tokens lack strong business logic support, making it hard to see real value in the short term, resulting in heavy market selling pressure and continuously reducing market expectations. Therefore, we see that users are losing patience with the re-staking market, and the value of points in users' minds is being continuously weakened, to the point that they consider them equivalent to air.
From the data, the total supply of LRT assets has shown weak growth since June this year, especially after some airdrops.
In addition to the Ethereum re-staking ecosystem, the staking system based on Bitcoin (BTC), such as Babylon, is also under market scrutiny.
Ordinary users cannot directly participate in Babylon; they need to go through a third-party BTC LRT protocol to become participants as ordinary BTC holders. This essentially returns to the logic of the Ethereum re-staking ecosystem, namely competing for points and future token expectations.
Many people express doubts about Babylon's future profitability. Not only are there more facilities involved in PoS security services, but it is also questionable whether there are enough PoS chains that need verification support. This also means that the returns ultimately fed back to users by Babylon, as well as whether the re-staking facilities based on it can provide satisfactory yield expectations, are equally uncertain.
How can the LRT market rejuvenate?
In fact, this problem is not complicated. The growth of the LRT market requires users to continuously participate in staking, and participating users merely hope to earn some visible and tangible yields, rather than receiving one empty check after another.
The emerging re-staking protocol Astherus seems to have seen through the essence of the problem. It attempts to break away from a system primarily incentivized by points and establish a new system focused on real yields to find the optimal solution to rejuvenate the LRT market.
Entering Astherus, where does 'real yield' come from?
Astherus is an innovative multi-chain LRT protocol. Unlike other re-staking models that focus on providing point incentives, it is more inclined to empower LST assets with utility through DeFi.
The Astherus protocol itself is divided into two different parts: AstherusEx and AstherusEarn. The former is a DEX that supports LST assets to profit through farming, derivatives, and various other means. The latter is an automated strategy yield pool based on CeFi + DeFi (CeDeFi) that has institutional-grade security, providing a safe and high-profit channel for LST holders.
AstherusEx
AstherusEx is a DEX that provides trading support for LST assets, enabling LST asset holders to achieve considerable returns from the market through different strategies by bringing LST assets into a multifunctional DEX. This segment is suitable for mature traders who possess profitability in the trading market.
In AstherusEx, users can choose to deposit and stake supported LST assets. Users participating in the re-staking of LST assets can receive a series of multiple point incentives, including AU points (incentives for the Astherus protocol). Among them, AU points can not only be redeemed for the native token $ASS during the Astherus ecosystem TGE but also play an important role in enhancing yields in other product segments.
When users complete re-staking, these staked LST assets can serve as collateral for perpetual trading, allowing users to participate in derivatives trading of major cryptocurrencies such as BTC and ETH without liquidating their staked positions, enabling them to maintain their staking yields while seizing trading opportunities.
Users can even use these staked LST assets to directly engage in derivatives trading, such as ETH interest rate contracts, to hedge risks.
Users will also receive additional AU point incentives for engaging in derivatives trading.
Thus, in the AstherusEx segment, LST assets have multiple utilities. They are not only important assets for users to obtain multiple point rewards in various ways but also can have trading utility in the derivatives sector even when staked. Traders can capture maximized trading yields through established derivatives strategies, significantly enhancing the utilization and yield of LST assets.
Therefore, the LRT ecosystem built on the derivatives system itself has the foundation to provide users with real yields, which is the first source of real yields.
AstherusEarn
AstherusEarn is a proactive strategy yield pool; users only need to stake mainstream assets into the pool to generate income.
When users stake assets in AstherusEarn, AstherusEarn will return an asTokens to the user. For example, when staking BTC assets to AstherusEarn, it will provide the user with a corresponding LST asset asBTC.
This asset can be used in AstherusEx, for example, for staking or derivatives trading. Typically, asTokens participating in the deposit staking of AstherusEx receive a higher multiplier of points rewards. For instance, the current asBTC asset staked in AstherusEx can achieve a multiplier of up to 5 times for AU points.
Meanwhile, the assets staked in AstherusEarn will also generate income based on automatic strategies.
AstherusEarn itself is an AI-driven automated strategy yield pool that can not only utilize and execute the best CeDeFi strategies but also create secure and high-profit channels, ensuring users maximize their yields by participating in the most profitable opportunities based on real-time market conditions.
At the same time, AstherusEarn has also established asset custody cooperation with Binance's asset custodian Ceffu, ensuring security while promoting the issuance of stablecoins backed by real-world assets (RWA) such as real estate and government bonds to further bridge the gap between CeFi and DeFi, enhancing the stability and usability of digital assets within the Astherus ecosystem.
Based on this, when users stake assets in AstherusEarn, they will generate an additional 2-6% APR, which will be reflected in the net asset value of asTokens. At the same time, users will also receive AU point incentives. Therefore, asTokens are more like intention assets; users can mint asTokens with a single click to directly realize intended yields.
Therefore, whether in relation to the current mainstream DeFi protocols or the re-staking paradigm, AstherusEarn is able to provide yields and capital utilization rates that are superior.
Therefore, based on mature yield strategies, seeking outward through a combination of DeFi and CeFi is becoming Astherus's second source or income growth point for capturing real yields for users.
Astherus may become a new growth point in the LRT track.
The overall growth of the LRT market is weak, rooted in the fact that simple pre-market point rewards no longer resonate with coin holders and traders. Points essentially represent future redemption tickets, and more importantly, they need to bind incentives with future expectations deeply. Using points as the primary incentive method is certainly unsustainable.
Thus, in a new market phase where users have been overly manipulated by point schemes, the overall growth of the DeFi market is weak, and yields are sluggish, users are more eager for tangible, visible real yields. Therefore, the key to driving a new round of growth in the LRT track lies in whether users can obtain visible and tangible direct yields now.
Astherus is a clever problem solver, and both product segments actually have good problem-solving ideas.
Derivatives are a two-way market; regardless of market fluctuations, there is a space for arbitrage. By deeply binding LST assets and the LRT sector with the derivatives market, traders will always be able to find new profit points. Astherus combines the on-chain derivatives sector with the LRT track for the first time, allowing users from two relatively mature sectors to siphon off, and continuously find new growth points through mutual empowerment.
AstherusEarn is more straightforward, based on an AI strategy pool, ensuring that the protocol clearly generates income from external markets, even from the Web2 market. Therefore, for staking users, rather than engaging in the re-staking market to compete for uncertain returns that may ultimately be zero, it would be better to use AstherusEarn to access direct, clear, and real yields. Users can achieve their yield intentions in this process with a single click, without needing to interact with multiple protocols.
In Astherus, points are more of an auxiliary role, primarily based on current real yield expectations, supplemented by future yield expectations. Therefore, Astherus's new attempt in the LRT market is expected to awaken the second spring of the LRT track.
It is worth mentioning that the market currently buys into Astherus's narrative. This project is not only part of Binance's incubator program but has also recently achieved a historical high TVL of $88 million. With the launch of the AstherusEarn product, Astherus is also expected to stand out in the LRT market and DeFi market.
