‘In the transition period of the LRT market cycle with cooling point enthusiasm and yield imbalance, Lair Finance is reshaping the track logic with a multi-party incentive structure, attempting to open a new entrance for real yields for the 'second spring of LRT.'
The rise and fall cycle of LRT: from points frenzy to yield imbalance
Since the second half of 2023, LRT (Liquid Restaking Token) has gradually become one of the hot narratives in the market. By re-staking LSTs (liquid staking assets) in the LRT protocol, users expect to obtain a new layer of protocol incentives in addition to original staking yields.
Among them, ether.fi pioneered 'non-committal points', enhancing user activity and capital retention through behavior binding, driving rapid growth of Restaking TVL. This mechanism adopts a points model of 'non-committal incentives + operational behavior binding', constructing a predictable yet not directly payable future incentive path for LST holders, significantly enhancing user participation and capital retention without clear coin issuance.
With the validation of the ether.fi model in the market, it has swiftly triggered a TVL competition in the entire Restaking track.
Several leading projects, including EigenLayer, Renzo, Kelp DAO, Swell, Puffer, etc., have also launched their versions of points systems, establishing the mainstream status of 'points-driven growth' in the LRT field. Even the DeFi protocol Pendle has based its zero-interest bond model to build infrastructure for early trading and pricing of these points.
In fact, the LRT market has entered a phase of slowing growth after experiencing a brief frenzy, especially as many projects completed their TGEs last year and began distributing airdrops to point users. Data shows that since May and June 2024, the total supply of LRT tokens began to decline after reaching a peak of $3.88M and has maintained at a very limited and slow growth level for some time, with market activity stabilizing or even cooling down.
The end of the points feast, real yields are the next stop
From the perspective of the crypto market, profit-seeking liquidity never sleeps. Therefore, the overall sluggishness of the current LRT market is fundamentally due to the continuous decline in real yield levels, combined with a lack of clear expectations for future yields.
The points model has exposed three major structural problems after the initial bonus period:
Unsustainable incentives: incentive breaks after TGE, declining TVL, and reduced APR;
Insufficient ecological stickiness: Most LRT assets lack multi-scenario usage and have poor asset reusability;
Community participation imbalance: large holders dominate the rankings, small holders miss out on airdrops, and 'mining is not as good as buying coins' has become a consensus.
After the original logic of 'just participating can earn extra airdrops' became ineffective, LRT users gradually realized that what remains is only the basic yield corresponding to mainstream LSTs, which generally falls within the 4-6% annualized yield range, significantly reducing attractiveness.
More critically, driven by high-heat narratives such as Meme, AI, and RWA, market funds and users are gradually shifting towards sectors with higher short-term return capabilities. In a market environment highly sensitive to liquidity, users and funds tend to 'migrate for profits', moving to where the returns are high, and becoming increasingly unwilling to be long-term bound to any single LRT protocol.
Consequently, after multiple projects' TGEs, there has been a general sense of disappointment in the community. Airdrop amounts fell short of expectations, and token performances in the market were poor, further reducing users' willingness to participate in the entire LRT track. How to construct a truly 'native yield-capable' and 'long-term participatory sticky' LRT mechanism has become a challenge that projects must face in the next stage.
At the current stage of the LRT market development, where there is a gap between growth and decline, Lair Finance is taking a different path. The protocol constructs a multi-party incentive coordination layer, no longer relying solely on pure point expectations or short-term airdrop stimulation, but is committed to introducing sustainable and verifiable real yield paths to the LRT market through a series of innovative mechanisms, injecting momentum for a new round of growth in the LRT market.
The breakthrough path of Lair Finance
The traditional LRT model can be understood as a further repackaging based on LSD, that is, the 'secondary structuring' of LST assets. Although different protocols have slight differences in mechanism design, they share the same underlying paradigm, and the core logic is generally built around the Ethereum ecosystem. In fact, currently over 90% of LRT protocols are established based on the ETH and EigenLayer systems, leading to inherent limitations in yield extensibility and mechanism flexibility. Rigid asset pathways and singular on-chain scenarios mean that the yields users actually receive primarily rely on the native interest of LSD, making it difficult to form a compound incentive model.
In contrast, Lair Finance has not been limited to the Ethereum ecosystem but has built a cross-chain liquid re-staking protocol with a multi-chain structure from the very beginning, connecting multiple Layer1s including Kaia, Berachain, Injective, Somnia, Story, and Initia, etc.
Its core value lies in three aspects:
Multi-chain adaptability: deployed on emerging high-potential public chains such as Kaia and Berachain;
Multi-source yield design: native staking + re-staking + ecological incentives with three-layer flywheels;
Multi-party ecological connectivity: covering three behavioral scenarios of on-chain users, gamers, and Web2 users.
This design allows Lair to break away from the traditional 'ETH-EigenLayer' path, flexibly designing a LRT framework with native adaptability, creating a sustainable and traceable compound incentive closed loop.
In the new liquid staking system, staked assets can not only earn basic yields but also obtain additional incentives through multi-dimensional yield stacking and combinations with DeFi protocols, while participating in validator security assurance, thus enhancing the native yield rate without sacrificing liquidity. More importantly, what Lair unlocks is a liquidity bridge between different Layer1 blockchains, thereby amplifying the security and economic synergy potential of each underlying blockchain, becoming a new infrastructure for promoting multi-chain ecosystem growth.
Currently, Lair has been deployed on two emerging L1 networks: Kaia and Berachain.
On the Kaia chain, Lair occupies over 66% of the staking market TVL and has cooperated with seven applications from the LINE ecosystem, including Catizen, Avalon, and LineNEXT, connecting over 3.6 million KYC users and facilitating the transition of Web2 users to on-chain asset participants.
On the Berachain chain, Lair has reached a deep cooperation with the leading LSD protocol Infrared, integrating over 95% of the LST liquidity market and launching LrBGT through the AVS mechanism to achieve a multi-source yield structure closed loop on Berachain.
In summary: Lair is building the infrastructure for 'incentive coordination' rather than just re-staking.
Helping the Kaia ecosystem form a community flywheel
Kaia is a next-generation high-performance Layer1 blockchain initiated by LINE NEXT, aimed at achieving a seamless transition for Web2 users to the Web3 world. One of its core advantages lies in its deep integration of the Mini App system of the mainstream communication platform LINE, significantly lowering the threshold for developers to build dApps or migrate traditional applications to the chain, while providing a large user base and strong traffic entrance for applications, thus creating a Web3 application environment with high scalability and user-friendliness.
Leveraging the LINE ecosystem, Kaia has a potential user base of over 300 million and has opened up key paths for user cold start through Mini dApps, point systems, and preset identity mechanisms. Therefore, Kaia is seen as one of the most promising infrastructures for achieving large-scale user migration to Web3.
In terms of ecological structure, Kaia connects two entirely different community groups:
One group comprises crypto users represented by Web3 natives, who interact with the Kaia network through staking and on-chain trading;
The other group consists of Web2 users from LINE Mini dApps, who mainly access on-chain activities through consumer-facing light applications such as games, SocialFi, and Memes.
However, the differences in cognitive structure and behavior patterns between the two lead to a lack of consensus bonds between $KAIA holders and actual DApp users, making it difficult for Web2 users to deeply integrate into the community ecosystem, resulting in Kaia not yet forming a complete community flywheel effect.
As Lair Finance expands its layout in the ecosystem based on the Kaia KIP-163 proposal (CnStakingV3) and constructs the LRT system, the long-standing issues of community gaps and staking participation thresholds in the Kaia ecosystem are gradually being improved.
For users unfamiliar with KIP-163, this proposal introduces a new generation of staking architecture on the Kaia mainnet. ** The previous CnStakingV2 framework only supported users staking $KAIA tokens to limited nodes, leading to uneven distribution of staking rewards, concentration of node power, and even potential security monopoly risks. The biggest innovation of CnStakingV3 is to support 'public delegation', allowing any non-validator user to freely delegate their held KAIA to trusted GCs (governance committee members), thus achieving a more decentralized and evenly distributed staking ecosystem.
Lair Finance is the first staking service protocol built on the Kaia CnStakingV3 architecture. ** Users can delegate their $KAIA to multiple GC nodes through its platform, and on this basis, further participate in the LRT system built by Lair, obtaining richer structures and more compound yield returns. The entire process requires no custody, ensuring asset security while greatly enhancing the convenience for $KAIA holders to participate in ecological governance and yield acquisition. Notably, Lair Finance's TVL on the Kaia chain once reached 70%.
Hierarchical re-staking system driving multi-dimensional yield flywheel
Lair Finance's liquid staking system is set up in several parts:
Lair Finance LSD Pool
Supporting $KAIA token holders to stake their tokens in the pool to mint $stKAIA, Lair Finance will collaborate with the GC with the best APR to stake these users' $KAIA tokens on the Kaia chain to earn chain-native yield rewards, distributing part of it to $KAIA token stakers and another part to the Liquidity Vault.
The yields from the staking pool will automatically accumulate, requiring no manual withdrawal by users. After staking $KAIA, users will receive yield-bearing tokens stKAIA, whose value will increase as staking rewards grow. For example, if a user stakes 1 $KAIA at an annual interest rate of 10%, after one year, the value of their stKAIA will increase to 1.1 $KAIA.
Re-staking pool
Users holding $stKAIA (or other LST tokens on Kaia like $sKLAY, $gcKLAY, or $stKLAY, etc.) can stake these LST assets together with an equivalent amount of $LAIR tokens (Lair Finance protocol tokens) into the Lair Finance re-staking pool to generate $rstKAIA tokens. Holders of this token will further enjoy the annualized yield from $LAIR tokens. Conversely, this also indirectly enhances the necessity and practicality of $LAIR tokens.
Liquidity Vaults
This incentive pool targets two user groups: Web3 stakers and Web2 LINE users. Its structure includes game reward pools and several Active Vault Services (AVS Vaults) that actively validate staking deposits.
AVS is Lair Finance's proprietary mechanism that allows users to deposit re-staked assets (such as $rstKAIA) into specific Vaults. By completing on-chain activities (such as participating in designated GameFi games, holding specific NFTs, or completing interactive tasks), users can earn points and rewards. These Vaults are typically initiated by Kaia ecosystem projects (mainly LINE game developers in the first phase) and are launched after approval by the Lair DAO.
As mentioned earlier, the LSD pool of Lair will inject part of the staking rewards into the game reward pool under the Liquidity Vaults. When LINE game users participate in the game, they will receive receipt tokens (Receipt Token) that can be used to redeem $stKAIA rewards in the Vault.
In fact, the AVS mechanism is integrating 'staking' with 'interaction', and is leveraging a new logic for capturing the value of on-chain behavior. Under the promotion of this mechanism, the early explosion of GameFi may be reenacted in Lair's AVS model.
At the same time, users holding $rstKAIA can further stake it in the AVS Vault, which contains tokens (such as Game Tokens, points, etc.) from LINE games, used to incentivize staked users.
It is worth mentioning that Lair Finance has recently successfully completed the first round of AVS activities. The first round of AVS cooperation projects includes:
Elderglade (Binance IDO, Bybit Megadrop, now online)
Bombie (in collaboration with Cattea, TGE approaching)
Frog Defense (launched on BingX)
and Slime Miner, Captain Tsubasa -RIVALS, Heroic Arena, etc.
The first round of AVS cooperation projects had a high starting point and community attention, laying expectations for the upcoming second round and further validating the strong potential and project selection capability of the Kaia ecosystem and Lair's cooperation matrix.
$KAIA holders, gamers, and game developers / project parties create a positive value cycle that jointly drives the growth and endogenous momentum of the Kaia ecosystem.
In fact, this re-staking system is gradually facilitating
For $KAIA holders, this staking system provides a clear and measurable three-fold yield path:
Staking $KAIA in Lair can yield $stKAIA while enjoying native staking rewards from the Kaia PoS (Proof of Stake) consensus mechanism.
Users can re-stake $stKAIA and $LAIR to mint $rstKAIA, thereby further obtaining Lair platform token incentives.
$rstKAIA can further be staked in the AVS Vault to receive tokens, points, and airdrop rewards issued by cooperative game project parties.
Under this series of incentive mechanisms, $KAIA holders not only become long-term participants and loyal users of LST but also effectively transform into co-builders and beneficiaries of Kaia's game economic growth.
For gamers, the incentive mechanism drives them to maintain high-frequency activity in LINE mini dApp games. By completing game tasks to obtain Receipt Tokens, players can redeem $stKAIA in Lair's liquidity vault, further participating in on-chain staking or asset utilization of ecological DApps, achieving a natural transition and deep integration from Web2 to Web3, gradually becoming on-chain users.
For game developers / project parties, after obtaining approval from Lair DAO and successfully establishing the AVS Vault, project tokens can be directed to $rstKAIA users, completing early user guidance and cold start. At the same time, players entering the on-chain ecosystem after obtaining $stKAIA in games not only enhance user stickiness but also help games acquire real on-chain behavior data and potential governance participants, thus building a sustainable community foundation.
With the continuous operation of this value system, Lair is creating an ecological flywheel driven by the resonance of stakers, players, and developers through the model of 're-staking + incentive coordination layer', becoming the core engine for on-chain application growth and capital circulation.
From PoL to LrBGT, releasing the true power of Berachain.
Following Kaia, Berachain has become the second Layer1 network deployed by Lair Finance.
Compared with other chains, Berachain's biggest feature lies in its liquidity-centric consensus mechanism—PoL (Proof of Liquidity), which essentially transforms 'liquidity providers' into block producers, creating an incentive model that deeply binds network security with ecological activity.
In the PoL framework, the role of ordinary token holders is also redefined. Unlike traditional PoS models where tokens are staked to validator nodes, users on Berachain delegate $BERA to PoL pools they trust. These pools are operated by ecological project parties and must be approved by the Berachain governance mechanism before joining the incentive system.
This means that holders are actually supporting a specific 'liquidity strategy' rather than simply participating in network consensus security.
These PoL pools typically use the received assets to build liquidity for key trading pairs in DEXs, thereby enhancing the trading depth and market efficiency of on-chain assets. In return, the pool operators will receive ecological tokens $BGT issued by Berachain based on their liquidity contribution scale and activity level, and can distribute part of the rewards to liquidity participants through the incentive mechanisms set by the protocol. To some extent, PoL transforms 'security mining' into 'ecological construction mining', forming a positive growth loop centered around incentive alignment, promoting the active development of the application layer of Berachain.
Currently, the PoL Vault LAIR/BERA mining pool deployed by Lair Finance on Berachain has been approved for launch on Kodiak, allowing users to provide liquidity to this pool while earning native LP rewards and LAIR token rewards, and further receiving $BGT token rewards.
At the same time, the WBERA/LAIR pool deployed by Lair Finance on Infrared Finance has also launched, allowing users to obtain iBGT (the BGT LST token on Infrared Finance) rewards while participating in LP and earning basic yields.
Of course, in addition to deploying the PoL Vault, Lair Finance has also brought a brand new LRT system to Berachain, providing multiple yield effects for BGT token holders and continuing the continuity of POL mechanism rewards.
Currently, Lair Finance has introduced its liquidity re-staking token LrBGT on Berachain, which is a Liquid Restaking Token (LRT) built on the native asset $BGT of Berachain. This mechanism integrates the liquid staking token iBGT issued by Infrared Finance and builds a financial derivative asset with automatic compounding and composability on its basis. Users only need to deposit their iBGT into Lair's re-staking contract to mint LrBGT tokens, without any additional staking of $LAIR or other assets.
The core advantage of LrBGT lies in its compound yield structure and asset liquidity compatibility. Users holding LrBGT will automatically receive the following two types of yields:
Basic staking rewards: rewards from the validator node block rewards generated by staking $BGT behind iBGT, provided by Infrared and automatically compounded through the Lair mechanism without active withdrawal.
PoL ecological incentives: since LrBGT is part of the contributed assets in the PoL model, users can also receive $BGT incentives from the Berachain network, and in the future may also include additional incentives provided by Lair or other cooperative protocols (such as $LAIR).
Currently, although LrBGT does not support re-staking yet, we see that Lair Finance is showing that secondary staking of LrBGT will be launched soon. Considering the method of obtaining game token incentives through secondary staking on Kaia, after users perform secondary staking of LrBGT, they may further receive token airdrop rewards from other projects on Berachain.
In fact, the significance of Lair building LRT for $BGT lies not only in enhancing the yield efficiency for holders but also in unlocking the capital potential of the PoL mechanism and the Berachain ecosystem.
As the core of governance and incentives in the network, $BGT has long faced a short-term behavior pattern of 'mining—extracting—selling', resulting in a lack of holder loyalty and governance participation willingness, decreasing the effectiveness of token incentives and community stickiness.
At the same time, the current DeFi system of Berachain has limited capital efficiency support for $BGT, with most staked assets being in a closed state, making it difficult to participate in lending, trading, and yield composition scenarios, which suppresses its DeFi activity and system composability, and also weakens the actual incentive effect of $BGT under the PoL model.
The introduction of LRT is a structural response to the aforementioned dilemmas.
By liquidating staked assets in the form of LrBGT, $BGT is re-empowered to participate in the ecosystem. While users continue to earn basic staking yields, they can also hold LrBGT to enter various DeFi paths such as liquidity mining, lending, and re-staking, significantly enhancing capital utilization efficiency and yield combination space.
At the network level, LRT lowers the staking threshold for users, enabling more BGT holders to transition from 'watching' to 'participating', which not only helps improve staking coverage and network security but also further promotes a positive cycle of on-chain governance and incentive structures.
Furthermore, LrBGT, as a structural derivative asset, has the capability to participate in more protocol components as a 'second-order asset' within the PoL model, becoming a composable capital unit in the Berachain DeFi system. This not only provides new financial building blocks for protocol developers but also brings users more flexible compound yield strategies, further expanding the application scope and value anchoring capability of $BGT.
From a more macro ecological perspective, the promotion of LRT is gradually forming a growth flywheel around $BGT.
Although the structure adopted by Lair on Berachain is slightly different from that on Kaia, as the platform's TVL continues to expand, LrBGT and iBGT provided by Infrared have established a stable connection, amplifying the liquidity influence of core staked assets together. As the re-staking mechanism gains user approval within the PoL framework, the participation rate of BGT and ecological stickiness have increased simultaneously, with more capital flowing into the incentive structure built by Lair.
At the same time, the penetration of LrBGT in various application scenarios of Berachain is also accelerating the market's understanding of the functionality and value recognition of $LAIR, gradually solidifying its role as an incentive hub.
In the positive closed loop of 'staking assets → LRT derivatives → protocol participation → incentive distribution → token value growth', the DeFi activity of $BGT is reactivated, while $LAIR achieves cross-system value synergy in the multi-chain ecosystem, consolidating its core positioning as a connective protocol asset.
It is worth mentioning that through deep integration with Infrared, Lair Finance currently occupies 95% of the LST market on Berachain and is realizing a new liquidity sharing.
Conclusion
Lair Finance protocol is transforming the staking activity from a closed model into a composable and sustainable compound yield system through a three-layer path of 'PoS native staking to LRT derivative assets, then to DeFi/GameFi incentives', forming a structured positive cycle.
In the Kaia ecosystem, Lair unlocks the incentive mechanism between stakers, players, and developers, binding LINE player behavior with re-staking yields through the AVS points model, achieving a true connection between Web2 users and the LRT model for the first time. In the first round of AVS activities, the total staking scale of rstKAIA reached 74 million tokens, accounting for as much as 70% of the total network TVL, demonstrating its ecological penetration.
In the Berachain ecosystem, Lair has built a dual yield path based on the PoL mechanism, allowing users to achieve double compounding of node rewards and PoL incentives through the structure of iBGT → LrBGT, while participating in mining pools such as LAIR/BERA and WBERA/LAIR, currently occupying about 95% of the LST market share on Berachain.
As the path of 'staking → derivative assets → multi-scenario participation → value return' gradually matures, Lair Finance is injecting truly verifiable native yield capabilities into the LRT framework.
Lair Finance is building a new path: possessing both Lido-style liquidity entry capabilities and integrating the security consensus mechanism of EigenLayer and cross-chain scheduling capabilities of LayerZero. Its goal is to become a true 'multi-chain unified incentive layer.' It not only covers real user behaviors but also possesses cross-ecosystem incentive scheduling and asset distribution capabilities, embodying all the characteristics of becoming the 'next generation cross-chain Restaking hub.'
Currently, mainstream LRT projects like ether.fi ($ETHFI) and Renzo ($REZ), even if they have not yet run a complete business loop, have each reached FDVs of over $2.5 billion and $1 billion respectively. In contrast, Lair has already substantially landed multi-layer yield structures on Kaia and Berachain, combining diversified application scenarios such as GameFi and DeFi to construct traceable real incentive paths, remaining in an early valuation pit with tremendous potential.
The current Lair is more like the prototype of 'infrastructure-level LRT': driven by on-chain behavior, cross-chain yield synergy, and multi-party ecological interaction, constructing a systematic closed loop. For a market looking for the 'second spring of LRT', Lair may not only be an underestimated project but also an underestimated paradigm.
The next round of incentive distribution is on the way, and the true story of re-staking infrastructure is just beginning.
