💭Current State of the LSDFi Sector

Despite the fact that decentralized liquidity protocols have brought persistent liquidity to the cryptocurrency industry, there are still issues such as imbalanced liquidity, low security, and weak scalability.

• Inefficient Liquidity: The liquidity of LST (Liquid Staking Token) assets is highly dependent on single platforms or liquidity pools, resulting in insufficient market sustainability.

• Missing Returns: The yields of the vast majority of LSD (Liquid Staking Derivatives) products are affected by the efficiency of staking protocols, uneven staking distribution, and protocol fees, making it difficult to achieve optimal returns. Moreover, users manually switching and managing staked assets across multiple LSD platforms face complex operations and reduced returns.

• Asset Fragmentation and Complex Management: Users often need to allocate funds across multiple protocols, each with different rules, operational methods, and interfaces, increasing the complexity of use. For ordinary users, managing multiple LST assets and monitoring their performance is a high-threshold task.

• Limited Market Scalability: LSD products are mostly focused on the Ethereum ecosystem, with less support for other blockchains, resulting in insufficient cross-chain scalability. The lack of a unified platform or protocol to aggregate liquid staking assets across multiple chains and protocols leads to market fragmentation.