On April 12th, Ethereum will usher in a "Shapella upgrade", which means that the Validator pledged tokens locked nearly two years ago will be unlocked. It has a certain degree of impact on the currency price of ETH, but at the same time, it also greatly increases the liquidity of the Ethereum ecosystem.
Speaking of liquidity, we have to mention the most popular word at the moment: LSD. The full name is Liquid Staking Derivatives, liquid staking derivatives. Recently, in the social environment of the Web3 context, we can see discussions about LSD almost everywhere, as well as introductions about related ecological tokens. Not long ago, VeDAO Research Institute interpreted the currently popular LSD concept project LSDx in an article "Super Liquidity Protocol LSDx Finance Receives $2 Million Strategic Investment from Foresight Ventures | veDAO Research Institute". But as of now, there are more than one excellent and valuable LSD concept projects, and there are many Alphas that have not yet issued coins. Therefore, in this article, VeDAO Research Institute summarizes four LSD-related projects that have not issued coins in the current market. For your investment reference.
a concept
As mentioned above, the full name of LSD is liquid pledged derivatives, which is a product that supports users to pledge relevant underlying assets in the contract to provide liquidity for the relevant ecology and obtain rewards. It sounds similar to Stake to Earn as we currently understand it. But the key point of LSD is that the assets pledged will continue to be flexibly used by the pledgers in a certain way, and a series of financial derivative games have been developed from this.
Since the independent node Validator requires at least 32 ETH, and validators who cannot obtain ValidatorTH before the Shanghai upgrade are responsible for adding new blocks to the blockchain, processing transactions and storing data, there are certain risks, and technical problems are likely to cause Loss of pledged assets or loss of rewards, the high threshold keeps a large number of ordinary users out.
The LSD protocol allows ordinary users to participate in staking without any threshold and get rewards without maintaining the staking infrastructure. In addition, the design of bill assets also releases the liquidity of ETH during the staking period, so a large number of users and assets are captured in a short period of time, and developed into an independent circuit.
Coincidentally, in the English context, LSD also stands for "lysergic acid diethylamide", a semi-artificial hallucinogen and psychostimulant. This potion once became synonymous with young Americans and hippies in the 1940s. , means avant-garde and charming. In the same way, representing the latest interpretation of the DeFi concept at the core of Web3 development, LSD is pioneering and charming.
The original intention of LSD is to liberate liquidity. For those who want to pledge Token but do not want to be bound, liquidity staking derivatives can change the rules of the game. These derivatives represent the pledged assets of Token holders and confirm the participation of pledgers in the pledge pool.
Excitingly, these tokens can be used for lending, trading and collateral in the decentralized finance world. This means that users can obtain the benefits of staking Token without having to give up the right to use it. It's a win-win situation that offers unprecedented flexibility and efficiency.
The LSD project aims to create higher returns above the basic rate of return, and is a hot topic this year. The market has responded positively to this upgrade expectation, as can be seen from the recent market quotations. At present, the staking solution based on DVT technology can redistribute nodes and improve the stability of verification nodes, which has been widely discussed.
two options
DVT technology:
DVT (Distributed Validator Technology), decentralized verification technology. DVT refers to a technology that allows the Ethereum Proof of Interest Validator (Validator) to run on multiple nodes (Operator Nodes) at the same time. centralized.
In layman's terms, DVT is to form a network of node operators, just like the distributed network of blockchain, and each node in the DVT provider's node operator cluster can have different clients, so as to reduce the single risk of failure. The main advantage of DVT technology is that it can form a Validator distributed network, relying on the consensus mechanism (IBFT) to jointly perform the duties of the Validator like a blockchain node network, and can realize the diversity of Validator Clients, improve the fault tolerance rate, and reduce Validator single point of failure risk, earn stable income. The Obol Network we will introduce below is one of the representatives using DVT technology. In addition, SSV also uses DVT technology.
Re-Stake strategy
In addition to DVT technology, LSD ecology also has a solution for pledge: Re-Stake, double pledge. Under the concept of re-staking, the pledged ETH can be re-pledged, and the trust and security of the non-settlement layer Dapp can be solved. Through the second pledge, using the existing trust network to protect other infrastructure and middleware layers, this narrative is expected to become the consensus security center of the LSD track, and EigenLayer below is the representative. At the same time, EigenLayer is also one of the extensions of last year's hot concept "modular blockchain". In addition to EigenLayer, FXS and Rocketpool, which have already issued coins, are also typical representatives of Re-staking.
To put it simply, DVT technology focuses more on the decentralization of the pledge process and governance process, while Re-Stake focuses more on security and decentralization of the pledge process. Although it transfers the authority of decentralized governance, it also makes the whole model simpler and more controllable.
At present, these two models, it cannot be said who is right and who is wrong, are both an exploration and trial of the concept of LSD. Different strategies attract projects with different needs. For example, DVT is often favored by most centralized service providers. In the LSD track, most of the market capitalization is now occupied by centralized service providers, such as Lido (depositing more than 4 million Ethereum, accounting for 32% of the total pledged encrypted assets), which is why they want to introduce DVT technology. The purpose of enhancing decentralized orthodoxy. Those who want to seek simpler participation methods and are not risk-averse tend to prefer Re-Stake.
Four Alphas
Obol Network
Official website:
Twitter:
https://twitter.com/ObolNetwork
More information:
https://app.vedao.com/projects/4531cc0518029232f13326bcf8f27e7042ff6a9b44a80ef63dd2b62046fcca03
Project Introduction:
Obol Network, a protocol that facilitates trust-minimized staking through multi-operator verification. Obol focuses on scaling consensus by providing permissionless access to distributed validators (DV). Distributed validators will and should form a large part of the mainnet validator configuration. In preparation for the first wave of adoption, the Obol Network is currently using a middleware implementation of Distributed Validator Technology (DVT) to enable the operation of a distributed validator cluster that can preserve validator current clients and remote signing infrastructure. Obol believes that distributed validators will occupy a large part of the main network validator configuration in the future, so it is committed to extending consensus by providing distributed validators (DVT) without permission access, which are used as the core construction of various Web3 products piece.
Obol adopts DVT technology. In the planning of V1, the development and maintenance infrastructure of Obol Network has four core parts and products:
Distributed Validator Launchpad, a CLI tool and DAPP for bootstrapping distributed validators.
Charon, a middleware client that enables validators to operate in a fault-tolerant, distributed fashion.
- Charon acts as a middleware between common authentication clients and their connected beacon nodes, intercepting and proxying API traffic. Multiple Charon clients are configured to communicate together to agree on validator responsibilities and act together as a unified proof-of-stake validator.
Obol Managers, a set of solidity smart contracts used to form a distributed validator.
Obol Testnets, a set of ongoing public incentivized testnets that enable operators of any size to test their deployments before serving on the mainnet Obol Network.
In June 2022, Dev Net 1 will be launched, aiming at the earliest trusted operators to conduct grayscale testing.
In July 2022, Dev Net 2 will be launched to allow trusted operators to participate in the test.
In October 2022, Athena Public Testnet 1 was launched. It is a non-incentivized public testnet. This version is also the first time that Obol is open to the public. The way of the witch.
In June 2023, the launch of Circe Attack Net is expected. This is also the last test of the V1 phase, and a large number of testing tools will be created to find damage points and vulnerabilities to Charon.
It is worth noting that, probably after Circe Attack Net, Obol launched the V2 version. Compared to V1, Charon-based V2 will join the incentive program to ensure that any operator who is not online and does not participate in verification will not receive any rewards. And this version, we can also regard it as the official launch of Obol products.
Investment and financing situation:
At present, the cumulative financing amount of Obol Labs has reached 19 million US dollars.
In September 2021, Lido provided a $100,000 LDO grant to Obol to continue researching and building the protocol.
In October 2021, Obol completed a financing of US$6.15 million. Investors include ConsenSys, Acrylic Capital, Coinbase Ventures, IOSG Ventures, Blockdaemon, Delphi Digital, Stakefish, Figment Fund, Chorus One, Staking Facilities, and The LAO.
On January 17, 2023, Obol completed a financing of US$12.5 million, co-led by Pantera Capital and Archetype, followed by Coinbase Ventures, Nascent, BlockTower, Placeholder, Ethereal Ventures, Spartan and IEX, as well as direct participation from top Validators, such as Stakely, Cosmostation, Kukis Global, Swiss Staking, Swift Staking, Blockscape, and DSRV.
Ether.Fi
Official website:
Twitter:
More information:
https://app.vedao.com/projects/d93118d151f72b2a729ec0c1d3ff8f7ee61d7c218754c2c5d709de19f2a50bba
Project introduction: Ether.Fi is a non-custodial liquid staking platform that allows users to maintain control of their keys while delegating Ethereum validator operations to node operators. Every validator generated through its protocol will be represented as an NFT. Ethereum stakers who deposit at least 32 ETH will hold NFTs, which represent an economic stake for validators. Once the liquidity pool and protocol fund management smart contracts are implemented, this NFT can be split.
The first stage, entrusted pledge: In April this year, after the ETH Shanghai upgrade, the Ether.Fi main network was launched, and the entrusted pledge function was launched simultaneously.
If the pledger wishes to pledge ETH of 32 or a multiple of 32, follow the workflow below:
Node operators propose prices
The pledger will deposit the corresponding ETH into the contract, and simultaneously cast two withdrawal NFTs (T-NFT, B-NFT), where T-NFT represents 30 (or the corresponding multiple) ETH and can be transferred; B-NFT represents 2 (or corresponding multiples) ETH as SBT. The only way to recover 2ETH is for the validator to withdraw.
The staker encrypts the validator secret key with the node operator public key.
Node operators start validators with decrypted validator keys.
Stakers or node operators can withdraw at any time.
The second stage, liquidity pool: it will go online in Q2 or Q3 this year.
- If the staker holds less than 32ETH, or does not want to take the responsibility of monitoring the validator node, they can participate in Ether.Fi's staking by casting eETH in the NFT liquidity pool.
The third stage, the license-free node market: it will go online in Q4 this year or Q1 in 2024.
- NFT represents the economic value of staking ETH, allowing it to create a programmable layer on top of the staking infrastructure by creating economic incentives for node operators and staking it. Not yet available.
Investment and financing: On February 28 this year, Ether.Fi completed its first round of financing with a financing amount of US$5.3 million. Investors include Chapter One, North Island Ventures, Arrington XRP Capital, Maelstrom, Node Capital, Version One, Purpoes Investments.
EigenLayer
Official website:
Twitter:
https://twitter.com/eigenlayer
More information:
https://app.vedao.com/projects/106f792d028941e7291b025da0d5b304ba5ed4256470a985bd438ad0aaf057c0
Project introduction: EigenLayer is a set of smart contracts on Ethereum that allows ETH stakers to choose to verify new software modules built on top of the Ethereum ecosystem. Stakers opt-in by granting the EigenLayer smart contract the ability to impose additional slashing conditions on their staked ETH, allowing for extended cryptoeconomic security.
By opting into EigenLayer, stakers can validate multiple types of modules, including consensus protocols, data availability layers, virtual machines, guardian networks, oracle networks, bridges, threshold encryption schemes, and trusted execution environments. Instead of decentralizing security across modules, EigenLayer aggregates ETH security across all modules. This improves the security of decentralized applications (DApps) that rely on modules.
Additionally, the value of Ether has increased due to new fee-sharing opportunities provided by these multiform modules. EigenLayer also acts as a grading system for Ethereum, allowing new innovations to be battle-tested in multiple variants, such as Danksharding and proposer/builder separation, before the best ideas are integrated back into Ethereum.
EigenLayer introduces the Re-staking model: the protocol creates an optional middle layer, on which users are allowed to deposit pledged ETH into smart contracts, agreeing to grant EigenLayer additional execution rights. That is: transfer the management rights of the pledged ETH to EigenLayer to obtain more benefits. Such a network can be regarded as a collective sub-network that voluntarily chooses to join Re-staking among many Ethereum pledgers and Validators, sharing security with Ethereum. Opt-in in this network will have many consequences: for example, providing additional verification services will be able to obtain additional verification benefits. A Token has multiple roles, it can be both a pledge Token and a verification Token.
The multi-role result means that pledge users can obtain multiple benefits. According to the EigenLayer white paper, in EigenLayer, there are several forms of re-pledging:
Native re-staking: Validators can re-stake their ETH by pointing their withdrawal tokens to the EigenLayer contract.
LSD Re-staking: Validators can re-stake by staking their LSD (ETH that has been re-staked through protocols such as Lido and RocketPool) by transferring their LSD into the EigenLayer smart contract.
ETH LP re-staking: Validator pledges a pair of LP tokens containing ETH.
LSD LP re-staking: Validator stakes a pair of LP tokens containing a liquid pledged ETH token.
In addition, EigenLayer has also set additional slashing conditions for the above-mentioned mortgaged ETH that continues to exist in the consensus layer to bear corresponding risks and impose fines on malicious behavior.
Investment and financing situation: Up to now, EigenLayer has completed two rounds of financing:
In August 2022, EigenLayer completed a $1.45 million seed round of financing. Participating investors include: Polychain*, Ethereal Ventures*, Figment Capital, dao5, Robot Ventures, P2P Validator, Anthony Sassano, Viktor Bunin, Mara Schmiedt, Tim Beiko , Marc Bhargava, Zaki Manian, Joe Lallouz, Jon Charbonneau.
On March 28 this year, EigenLayer completed a round of financing of US$50 million at a valuation of US$500 million. Investors include: Blockchain Capital*, Coinbase Ventures, Hack VC, Electric Capital, Polychain, Bixin Ventures, IOSG Ventures, Finality Capital Partners.
Tenderize
Official website:
Twitter:
https://twitter.com/tenderize_me
More information:
https://app.vedao.com/projects/4bc6dd7f32b3545f8ce775133b99ee9e68440ad1684d33166d85d1c383deac09
Project introduction: Tenderize is a pledged derivatives protocol that allows users to mortgage loans and trade tokens while maintaining positions in pledged assets. With this added flexibility, the company believes it can unlock the full utility potential of staked assets, with the ultimate goal of enabling permissionless liquid staking. Currently deployed on ETH/ Arbitrum, it supports the liquid pledge of four assets: $MATIC/ $GRT/ $AUDIO/ $LPT. Up to now, Tenderize has deposited a TVL of up to 1.68 million US dollars, and its annualized return has reached a maximum of 24%.
Similar to most liquid pledge agreements, users deposit the native assets supported by the protocol into Tenderize, and obtain an equivalent pledge certificate T-Asset. T-Asset represents the ownership of the user's native assets, which can be traded, transferred, and LP to obtain DeFi income. The role played by Tenderize is the client, and user assets are collected and entrusted to the node operator.
Tenderize V1 will draw 10% of the node staking revenue, 5% of which will flow to the Tenderize treasury (most of which will be used to increase LP liquidity), and 5% will be used to motivate LP. Tenderize is about to iterate the V2 version, which is expected to be launched in the first half of this year. At that time, the revenue of the extraction node will drop to 0-0.5%, and this part of the revenue will be used to motivate LPs.
As of now, the Tenderize protocol has not yet issued tokens, but according to the information in the white paper, the protocol will clearly issue the native token TENDER. TENDER will mainly be used as a protocol governance token with voting rights.
Investment and financing: On July 7, 2022, Tenderize completed a $3 million seed round of financing. Investors include: Eden Block*, TRGC, Figment Capital, Encode Club, Daedalus, and Syndicate.
Summarize
DeFi is the Lego cornerstone of the encrypted world. Every time a new concept emerges, it will bring huge wealth effects and profound changes to the development of the industry. From the DeFi Summer brought by liquidity mining, to the liquidity war triggered by Curve, and now to the liberation of pledged token liquidity by LSD. The progress of DeFi will continue to expand outwards and expand to specific applications such as games and social networking, forming new ways of playing. In fact, the slow development of concepts including GameFi and SocialFi in the past year is largely due to the stagnation of the core mechanism DeFi model. The development of the LSD concept this time is of great help to the development of DeFi ideas. At the same time, this power will also be transmitted, thereby attracting new prosperity from bottom to top, from the basic layer to the application layer.
It is also true that more and more projects are beginning to move closer to LSD, whether it is CEX, DEX, or a lending platform, as long as their business involves depositing and withdrawing ETH. Even Gitcoin, the Web3 crowdfunding platform known as the Web3 arsenal, has also begun to switch to LSD. On February 27 this year, Gitcoin governance voted to launch gtcETH, and had the concept of a diversified LSD ETH index.
https://twitter.com/indexcoop/status/1629943732668624901
LSD has become the core narrative of the encryption market. The market size of LSD still has room to grow. Although some people worry that the ETH unlocked after the Ethereum Shanghai upgrade will experience selling pressure, the LSD track will still have better data performance overall.
So, where is the opportunity now? Either choose a decentralized LSD service platform, or choose LSD-Fi products. Or go directly to one step and choose a high-quality LSD Alpha that has not yet been issued.
references:
https://mp.weixin.qq.com/s/ioEjGOZqCch-eTwg7OxiHA
https://www.odaily.news/post/5185382
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