Delphi Digital: Five Classifications of LSDFi
TechFlow Selected TechFlow Selected
Delphi Digital: Five Classifications of LSDFi
This article introduces five different use cases of LSDfi.
Navigating Web3 tides with focused insightsWritten by: Delphi Digital
Compiled by: TechFlow
LSD finance, or LSDfi, refers to DeFi protocols related to LSDs. This includes established DeFi protocols such as Aave, Balancer, and Curve, as well as newer and upcoming protocols that help enhance the utility of LSDs.
LSDfi can be categorized into five distinct use cases:
Interest Rate Swaps
Interest rate swap protocols like Flashstake and Pendle allow LSD holders to trade their yield. Additionally, they can earn incentive rewards by providing liquidity.
LSD-Secured CDP Stablecoins
Agility, Lybra, and Raft are all collateralized debt position (CDP) stablecoin protocols that allow users to mint stablecoins using LSDs as collateral. Notably, Lybra leverages LSD yield to create an interest-bearing stablecoin.
Diversified LSD Baskets
LSDx Finance, unshETH, Asymmetry Finance, and Index Coop offer diversified baskets of LSDs. Moreover, protocols such as LSDx and unshETH integrate swap functionality within these baskets, enabling users to earn additional swap fees as yield.
Money Markets
Aave and Silo Finance allow LSDs to be used as collateral for loans, unlocking liquidity and leverage for LSD holders. Notably, Aave has launched leveraged liquidity mining for stETH.
DEXs
Prior to the Shapella upgrade, Curve Finance and Balancer supported ETH/LSD stable pools, enabling low-slippage swaps. Additionally, Gyroscope Protocol recently launched its Elliptic Concentrated Liquidity Pools, which promise higher capital efficiency for stable pairs.
Overall, current LSDfi use cases primarily fall into the above five categories. While these use cases may appear diverse, they share a common goal: increasing returns for LSD holders.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
Delphi Digital
