This is Part 2 of a 2-part series about LSDfi. You can find a link to Part 1 here. In Part 1 you can also find an explanation of what LSDfi is.
So, in this Part 2 we explore three more LSDfi protocols. Let’s hit it.
Source: Twitter
Lybra Finance (LBR)
Lybra Finance didn’t launch until April 2023. It runs on top of Ethereum. And still, they are one of the LSDfi OGs. It shows how young this DeFi niche currently is. But will it remain a niche? Not if you look at what DeFiLlama shows as their TVL. A whopping $235 million in only 2–3 months. The protocol also has its own LBR token.
It offers a CDP or Collateralized Debt Position stablecoin. To clarify, as collateral, they use LST (liquid Staking Tokens) assets. This allows you to mint their eUSD stablecoin which pegs to the USD. For this, they use, among others,
- Over-collateralization,
- Liquidation mechanisms
- And arbitrage opportunities.
As collateral, you can use, for instance, stETH. All these minted eUSD coins, generate yield. Lybra works in a simple way. Here are four easy steps to follow.
- As collateral, you can deposit ETH/stETH.
- Now you can mint and borrow eUSD against your collateral.
- You can hold and receive APY, currently set between 7% and 9%.
- Or you can use it in DeFi protocols and find some that generate more yield.
Some of their features that stand out are, for instance,
- No minting fees.
- Zero loan interest.
A V2 of Lybra is in the making. This should launch in July or August. It will see, among others, the OFT (Omnichain Fungible Token) integration. These tokens work on Layer Zero. It allows for more and new collateral options. Furthermore, you can expect an update on their tokenomics.
You can use the LBR token for governance if you’re a holder. As a result, you have a say in the direction the project will take. Holding LBR allows proposing and voting on decisions. By staking LBR, you will also receive a revenue share. The following picture shows the Lybra earn options.
Source: Lybra Earn
UnshETH (USH)
UnshETH helps you to diversify your assets. For example, it offers the unshETH token. This is a basket with blue chip LSD tokens. Among others, you can find, wstETH, cbETH, rETH, or sfrxETH. Currently, unshETH supports 6 tokens, with more to follow. Furthermore, unshETH is an ERC20 token that is omnichain. Currently, this includes the Ethereum and the BNB chains. Recently, they also launched on Arbitrum. Here, they partnered with the Camelot DEX. You can, for example, transfer unshETH across chains for free.
1 unshETH pegs to 1 ETH worth of a variety of LSD tokens. You can redeem it in the same ratio as there are in the basket. Keep also in mind that all the underlying LSD tokens are being staked. This allows unshETH to gain value. For example, with an APY of 5%, 1 unshETH is after 1 year worth 1.05 ETH.
So, the number of tokens in the basket can vary proportionally. However, they will still peg to the unshETH. That’s because you can configure the target weights and the risk cap for all the LSD tokes in the basket. As a result, you have a reduced risk exposure.
UnshETH also partnered with Layer Zero. In other words, you can deploy unshETH on all major layer 1 and layer 2 chains. For example,
- BNB chain
- Arbitrum
- zkSync
- Or Optimism
Below is a picture of some of their farm options. In yellow is the base APR and in red is the reward APR.
Source: UnshETH farms
Asymetrix Protocol (ASX)
Asymetrix Protocol does just as its name implies. It distributes staking yields asymmetrically. In other words, it randomly allocates extra rewards when you stake. The protocol tries to get as many people to stake ETH. In return, you can get an outsized reward.
You can compare it to a lottery for staking your ETH. The picture below gives you an idea of what to expect. So, let’s take a look at this. Your main asset is stETH which you stake at 4.5% APR. You stake this because it earns yield, and you know precisely when and where you receive that yield. You can withdraw anytime you want.
Now add Asymetrix to the mix. You still earn a yield on your stETH and can withdraw it anytime. However, your APR is between 0% and 999%. On top of that, you also earn the ASX token at a 20.62% APR. So, do you think it’s fair to call this a lottery? You keep your staked assets and earn your APR. However, in the weekly draw, you can get lucky with an extra juicy reward.
Conclusion
This is Part 2 of a 2-part series on LSDfi. In this part, we covered Lybra Finance, UnshETH, and Asymetrix Protocol. For a link to Part 1, please look at the top of this article.
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