LSD (Liquidity Staking Derivatives) is an innovative product that combines asset staking with flexible use to bring double benefits to users. Compared with traditional Stake to Earn, LSD not only provides liquidity support, but also spawns a series of financial derivatives, opening up a new staking experience!
The LSD protocol became famous for its design of no-threshold staking participation and release of ETH liquidity, and quickly became a unique pioneer in the DeFi field. With the same name as the hallucinogen it represents in English, LSD also brought unprecedented charm to the Web3 stage.
The original intention is to liberate liquidity and allow users to enjoy the benefits of staking without being constrained. These derivatives not only represent the staked assets, but also open the door to the world of decentralized finance for users, allowing them to maximize the potential of their assets in terms of lending, trading, and staking without giving up the right to use them. This win-win situation brings unprecedented flexibility and efficiency to DeFi, which is very exciting!
Recently, the total locked value (TVL) of ether.fi has grown rapidly. As the predecessor of the LSD project, ether.fi has worked closely with EigenLayer to keep up with the re-staking trend and successfully launched the first LST on the market that supports native re-staking. This means that LST integrates the functions of LRT, avoids the complex operation of multiple tokens, and leads a new trend in the re-staking field!
According to DefiLlama's LSD track TVL ranking, ether.fi currently ranks sixth, just behind $FRAX and Ethereum, and its growth momentum is rapid. This amazing performance has made ether.fi a rising star on the LSD track, leading the track's vane and attracting much attention from the market!
However, launching an airdrop in a bear market may not be a good idea, but as the market gradually heats up this year, the expectations of airdrops from various projects are rising. Among them, EigenLayer's airdrop has attracted much attention. However, EigenLayer is not an easy project to invest in. Currently, the project is in the stage of suspending deposits and pledges. Whenever the quota is released, the investment amount will be quickly filled up, and the market enthusiasm has reached its peak.
Taking advantage of this wave of enthusiasm, ether.fi is also very good at marketing and launched the MEGA Week event.
The 3 million EigenLayer Points allocated to the protocol treasury were used to incentivize old users and attract new funds to participate. However, within less than 24 hours of the launch, the inflow of funds has soared. In order to meet the demand, a temporary increase of 20,000 ether was added, despite the halving of rewards. However, in less than 48 hours, the additional 20,000 ether quota was sold out again, and the market enthusiasm became more and more hot, which can be seen at a glance!
Why are everyone rushing in so eagerly?
By investing through ether.fi, investors can expect to indirectly obtain potential airdrops of EigenLayer points, and on the other hand, they can enjoy stable Ethereum PoS income, which is currently around 3.5% annualized. In addition, ether.fi project points can be obtained. Although these points are only a reflection of future possibilities, PoS rewards are real benefits. And after EigenLayer goes online, there will be opportunities to receive rewards for re-staking. Such an investment portfolio is undoubtedly full of appeal!
What are the advantages of ether.fi compared to other LSD projects?
1. Native re-mortgage
Unlike depositing $rETH, $cbETH and $stETH into EigenLayer, these LST (liquidity staking token) deposits do not receive receipt tokens. This means that your liquidity is locked in EigenLayer and loses compatibility with other DeFi platforms.
However, the certificate $eETH obtained by staking Ethereum through ether.fi is a native re-staking LST. Once your ether is staked, it will be re-staked directly in EigenLayer, obtaining the dual benefits of Ethereum PoS and Restake, and issuing you receipt tokens, the so-called LRT (liquidity re-staking tokens). These receipt tokens can continue to be used in the DeFi ecosystem, bringing you more opportunities and flexibility.
With LRT, your DeFi gameplay will become more diverse. You can choose to provide liquidity in major DEXs (such as Curve, Balancer, Maverick), or participate in interest rate derivative projects like Pendle to obtain higher returns or certain fixed returns. Projects such as CapitalismLab and coumarin have studied these areas in depth, providing you with more opportunities and options.
At the same time, traditional LST cannot enjoy the benefits of EigenLayer and participate in the DeFi market at the same time. This provides a unique market niche and breakthrough for native re-mortgage protocols like ether.fi, and also has an excellent driving effect on the decentralized development of Ethereum POS staking.
2. Decentralized Core
Traditional LST projects such as Lido have a middleman trust problem because users who stake in the project do not have the validator key. This means that if a user wants to unstake, they cannot obtain the signed exit queue message from the project or the node operator, which makes the user unable to operate and must rely on the trust of the middleman.
In this regard, ether.fi takes a different approach by encouraging individual nodes to join in order to increase the decentralization of the project. These individual nodes hold widely distributed validator keys, thus alleviating the problem of trust in middlemen.
It is worth noting that users holding $eETH tokens still do not have their own validator keys, but users with the ability can choose to operate a SOLO node. Each node stakes 2 ether and holds B-NFT as proof of holding the key.
In this way, ether.fi ensures that the staker generates his own private key - the staker only shares an encrypted copy of his key with the validator. And 2 ethers are used as a deposit for you to run the node (whether the deposit of 2 ethers is enough is worth discussing), which allows anyone to run their own node without permission and provide liquidity tokens for this.
The addition of Solo Stakers may cause the problem of low node efficiency rating, so the ether.fi project has taken a deep cooperation with Obol Labs to enhance decentralization. As one of the earliest projects to apply DVT technology, ether.fi demonstrated the results of its cooperation with Obol (Obol, as a competitor of the SSV project, currently has no project token).
The combination of DVT technology and Solo Staker splits a key into four parts, and four nodes participate in the verification work at the same time. As long as three of the nodes are operating normally, the risk of being slashed can be effectively reduced, and various potential risks caused by lack of access rights can be solved, thus improving the overall operation quality.
3. POS staking income growth rate NFT
Since I participated in ether.fi's EAP (Early Adopters Program) last year, I have been blindly mining K for a while. Then, the project launched a staking method for staking Ethereum and obtaining NFT certificates. These NFT certificates are divided into bronze, silver, gold and platinum levels, and each level corresponds to different Ethereum staking income. Bronze level is the most basic PoS income, and the income will increase accordingly with each upgrade. Holding NFT certificates can not only obtain PoS income, but also allow ether.fi points and EigenLayer points to grow at the same time. Such a mechanism is really impressive!
On the evening of March 12, a long-awaited news came: An announced that it would launch a new K mining project ether.fi (ETHFI) on its Launchpad. Starting from 8 am on March 13, users can pledge BNB and FDUSD to participate in K mining.
As a pioneer in the re-staking track, ether.fi (ETHFI) became the first project to be listed on Binance Launchpad. This news has attracted great attention from the market, and people can't wait to see the project go online!
Binance ether.fi New coin mining K key points
It should be noted that since the new currency mining requires the investment of $BNB or $FDUSD, if you buy the above currencies just to participate in the event, you may face the risk of falling currency prices or stablecoin decoupling during the mining period.
If you want to minimize the risk, you can choose to buy $FDUSD and sell it at 1 $USDT:1 $FDUSD after mining K. However, the number of new coins you can mine is only one-fourth of $BNB. If you choose to buy $BNB to mine K, you will face the risk of large fluctuations in the price of the coin, but if you intend to hoard $BNB for a long time, you may have the opportunity to get long-term investment returns. Therefore, which currency to use to mine K depends on the user's risk tolerance and profit needs.
As one of the hottest fields in 2024, the concept of Restaking was proposed by Sreeram Kannan, the founder of EigenLayer. Its core mechanism is easy to understand, which is to stake the pledged ETH (including various types of LST) on other protocols and DApps again and participate in the verification process. To put it bluntly, it is a feast of staking nesting dolls.
As a star track in the DeFi field, Restaking has attracted widespread attention. EigenLayer's expected coin issuance, AltLayer's airdrop activities, and EigenLayer and Renzo's financing have all contributed to its popularity.
Take A16 as an example. They not only launched restaking projects such as ether.fi on the Launchpad platform, but also actively invested in projects such as Renzo and Puffer. In addition, the well-known investment institution a16z invested $100 million to support EigenLayer, the leading project in the restaking field.
In the crypto market, the VC investment dynamics in the primary market are often seen as a barometer of the future direction of the market. Just as a duck knows when the water is warm in spring, by observing the investment dynamics in the primary market, we can more accurately grasp the future direction of the market. The popularity of the Restaking track can be seen from the active investment of top VCs and the rapid growth of the TVL of track projects.
So, what other potential projects are there in the Restaking track?
OwnLayer
EigenLayer is an Ethereum-based middleware protocol that introduces the concept of re-staking, allowing Ethereum nodes to re-stake their staked ETH or LSD tokens in other protocols or services that require security and trust, thereby achieving double benefits and governance rights.
Although EigenLayer has not yet issued tokens, it has launched re-staking points, which are distributed based on the user's re-staking time and amount. It is likely to become one of the most watched projects this year.
As the leader in the Restaking track, EigenLayer has attracted much attention from the market. It has a luxurious investment team, including Coinbase Ventures, Polychain, IOSG Ventures, etc., and recently received a huge investment of $100 million from a16z. Such investment trends have undoubtedly injected strong momentum into the future development of the project.
According to statistics from the defillama platform, EigenLayer's total locked value (TVL) has exceeded the $12 billion mark, and in the past three months, its TVL has grown rapidly, reaching an astonishing increase of more than 40 times! This figure is enough to prove EigenLayer's huge influence and leading position in the DeFi field, which is jaw-dropping!
Among the various protocols in the DeFi field, EigenLayer's total locked value (TVL) has surpassed well-known projects such as Maker and Uniswap, ranking third after Lido and AAVE! This amazing ranking is enough to demonstrate EigenLayer's strong position and huge potential in the DeFi market, which is eye-catching!
Kelp DAO
Kelp DAO is a triple yield re-staking protocol based on EigenLayer, created by Stader Lab, a multi-chain LSD project. Although the project has not yet issued tokens, Kelp DAO has already launched a points system.
It is exciting that Kelp DAO has been successfully connected to the OKX Web3 wallet and launched on the Arbitrum network. Although the public channels have not yet disclosed the news about Kelp DAO's financing, according to the data statistics of the defillama platform, Kelp's total locked value (TVL) has reached more than 700 million US dollars, and the recent growth rate of TVL has also been extremely rapid. This news will undoubtedly attract the attention of the market!
Puffer Finance
Puffer Finance is a native liquidity re-staking protocol built on Eigenlayer, and is also the first native liquidity staking protocol on Eigenlayer. Its emergence makes native re-staking on Eigenlayer more convenient, allowing anyone to easily run an Ethereum PoS validator and enjoy the corresponding reward gains. This innovation has injected new vitality into the DeFi field and attracted the attention and participation of many investors and users!
As a star project in the Restaking field, Puffer Finance has a luxurious investment lineup. In August last year, Puffer Finance successfully completed a $5.5 million seed round of financing, led by Lemniscap and Lightspeed Faction. On January 30, 2024, Binance Labs announced its investment in LSD protocol Puffer Finance. Although the specific investment amount has not yet been announced, this news will undoubtedly inject new impetus into the development of Puffer Finance and arouse the market's enthusiastic attention!
According to statistics from the defillama platform, Puffer TVL has now exceeded US$1.4 billion. From the beginning of February to now, TVL has increased more than 10 times.
Renzo
Renzo is an Ethereum staking protocol built on EigenLayer, which provides a convenient interface for re-staking on EigenLayer, eliminating technical barriers, resource allocation, and risk management issues. At the same time, Renzo also provides new primitives and design considerations for the creation of AVS applications, promotes open innovation, and promotes the development of flexible construction of open distributed systems.
Renzo's mainnet was launched on December 18 last year, and the native ETH re-staking function was launched. Through this function, users can easily obtain ETH re-staking income and enjoy 100% EigenLayer points. This innovation not only brings more income opportunities to users, but also injects new vitality and momentum into the development of the DeFi field!
According to the statistics of the rootdata platform, Renzo has completed two rounds of financing. On January 15 this year, it completed a seed round of financing of US$3.2 million with a valuation of US$25 million, led by Maven11, and OKX Ventures, IOSG Ventures, Figment Capital, SevenX Ventures, etc. also participated in the investment. On February 22 this year, Binance Labs announced an investment in Renzo Protocol, but the specific amount has not yet been disclosed.
According to data from the DefiLlama platform, Renzo's total locked value (TVL) has exceeded $900 million. Since February, TVL has increased 6 times! This impressive growth rate fully demonstrates Renzo's strong performance and wide recognition in the DeFi field, becoming the focus of investors and users!
Ownpie
Eigenpie is a SubDAO organization under the multi-chain yield protocol Magpie that provides liquidity re-pledge services, providing Liquid Stake token holders with the opportunity to re-pledge their assets and expand their profit potential. Users can re-pledge their LST assets such as swETH, wBETH, mETH, sfrxETH, rETH, stETH, etc. to Eigenpie.
According to data from the DefiLlama platform, Eigenpie TVL has now exceeded US$380 million.
Of course, in the staking track, in addition to the 6 projects mentioned above, there are also Swell, Stakestone, etc. In addition, in addition to Ethereum, there are also some high-quality Restaking projects in public chain ecosystems such as Solana and Cosmos, and friends can also explore more.
In short, Restaking is a hot track in 2024, and many restaking projects have not yet issued coins, which deserves our attention and layout.
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