LSDfi: DeFi’s Hottest Trend - 10 Projects To Know

LSDfi is a new DeFi niche using liquid staking derivatives like stETH for farming, stablecoin minting, and more. The TVL of LSDfi is up almost 600% in 2023, led by protocols like Lybra, UnshETH, and Gravita, and LSD-optimized blockchains like Persistence and Tenet. We cover everything you need to know in this detailed guide.

What is LSDfi?

LSDfi stands for “Liquid Staking Derivatives Finance.”  It covers all sorts of DeFi protocols that support liquid staking tokens, such as Lido’s stETH or Rocket Pool’s rETH. You can think of liquid staking platforms like a Layer 1 and LSDfi as its Layer 2.

(By the way, if you see the acronym LSD used in the crypto context, don’t get confused: it means “liquid staking derivatives” -- not the other thing. Another common acronym is LST (liquid staking tokens): both mean the same thing.)

We have a detailed article on liquid staking itself, but here are the key points:

• Liquid staking is a way to maximize the gains from staking coins like ETH and APT.
• Instead of staking directly on a validator, you stake through a special platform like Lido Finance or Tortuga on Aptos and receive special liquid tokens in return: stETH (Lido), tAPT (Tortuga), etc. These liquid tokens can then be utilized themselves for more gains.
• Liquid staking first became popular on Ethereum, because staked ETH couldn’t be withdrawn before the Shanghai and Capella (Shapella) upgrade. Lido Finance soon emerged as the leader, with $20 billion in TVL at the peak in April 2022.
• The advantage of LSDs is that they can earn you extra rewards in addition to the APY on the underlying coins.
• On Aptos, there are liquid staking protocols, as well: Tortuga and Ditto are both in the top 10 dApps by TVL. You can even stake APT in Ditto natively in Pontem Wallet.
• It’s important to distinguish liquid staking from native delegated staking, where you stake directly on a validator. On Aptos, you can do it on Liquidswap for a 7% APY.
• You can swap liquid tokens for the original asset using a protocol’s liquidity pool or an exchange Thus, even if the blockchain doesn’t allow immediate unstaking, you can have your coins back.
• You don’t even have to stake anything to get LST: assets like Lido’s stETH are traded on both CEX and DEX platforms, including Uniswap, ByBit, Gate.io, Huobi, etc.

And now to the really fun part. Once liquid staking became a huge business, a new generation of third-party DeFi protocols grew around LSDs, integrating them into farming, lending, stablecoin minting, and more . This entire category is known as LSDfi.  

Many major DeFi protocols also offer pools, farms, or loans with LSTs. For example, Curve, Uniswap, and Balancer all allow you to trade stETH, anrkETH, etc. But in this article, when we say “LSDfi”, we mean those projects that focus on LSTs. The TVL of LSDfi skyrocketed 560% from $60M to $400M in just 3 months in 2023.

Before we jump into these strategies, though, let’s decipher the major liquid staking derivatives, as their names can seem confusing to beginners.

The 7 liquid staking platforms you need to know

1. Lido Finance

$13 billion TVL on 5 chains ( 99%  Ethereum)

LST:

• stETH (Staked ETH)
• wstETH (Wrapped staked ETH) – Because stETH is rebased (your token balance changes) as rewards are added, wstETH is used to keep token balance constant for DeFi. The wrapping is done using Lido’s wrapper tool.

2. Coinbase

$2 billion liquid staking TVL

• LST: cbETH (Coinbase Wrapped Staked ETH)

3. Rocket Pool

$1.7 billion TVL

• LST: rETH (Rocket Pool ETH)

4. Frax Ether

$390 million TVL

Tokens

• frxETH (Frax ETH) - an ETH-pegged stablecoin.
• LST: sfrxETH (Staked Frax ETH) – a vault token that accrues the staking yields of Frax ETH validators, plus some rewards from MEV and transaction fees.

5. StakeWise

$165 million TVL

Among the popular LSDfi protocols, only IndexCoop supports StakeWise LSTs

LST: sETH2

6. Ankr

$133 million liquid staking TVL on 7 chains (out of which $82M on Ethereum)

• LST: ankrETH (Ankr Staked ETH) – Ankr first became popular as the main liquid staking platform for Terra, but after its collapse it focused on other chains, especially Ethereum.

7. Swell

$38 million TVL

Swell is the only liquid staking protocol that doesn’t charge platform fees.

• LST: swETH (Swell ETH)

Other popular liquid staking platforms include takeHound, Stader, and Binance, but we won’t cover them here as none of the major LSDfi protocols support their LSDs.

Top LSDfi use cases

• Stablecoins: use LSD as collateral to mint decentralized stablecoins

Examples: Lybra, Gravita, Raft

• Farming: deposit LSDs to get the protocol’s own token, then stake it for more rewards

Examples: Lybra, unshETH

• Lending: often loans come in the form of freshly-minted stablecoins, but you can borrow other assets, as well.

Examples: Alchemix

• Folding: borrowing an asset against collateral, swapping it for the collateral asset, depositing that to get a new loan, then swapping again to maximize your yield. This is very risky and not recommended for beginners.

Example: Raft.fi

LSDfi protocols tend to offer complex composable strategies, such as minting stablecoins, then depositing them in a liquidity pool, then using the LPs for yield farming. Or depositing LSDs to get vested governance tokens and using them to vote and get a share of the protocol’s revenue. Derivatives are piled onto each other to maximize the gains, but the risk increases as well.

Liquid staking and LSDfi on Aptos

Aptos is still a new L1, but it already has two liquid staking protocols in its Top 10 dApps. Both allow you to earn the base 7% APR on staked APT and use the resulting LSDs in DeFi on Aptos.

1. Tortuga Finance: receive tAPT ($4 million TVL in June 2023).
2. Ditto Finance: receive stAPT, then stake stAPT or Liquidswap stAPT LPs (stAPT-APT and stAPT-USDC) to potentially earn up to 40% APY in future DTO (Ditto Discount Tokens).

There are no dedicated LSDfi protocols on Aptos yet, but several major DeFi platforms support Tortuga and Ditto LSDs:

• Liquidswap AMM: swap stAPT for APT or USDC, and tAPT for APT - or deposit liquidity to earn up to 4.4% APY.

• Thala Labs: you can use tAPT as collateral to mint MOD (Move Dollar) stablecoins with a 150% collateralization ratio. Thala also offers a weighted liquidity pool for tAPT-stAPT.
• Aries Markets: borrow tAPT and use it for margin trading on the platform - or deposit tAPT to earn lending interest.
• Aptin Finance: supply or borrow tAPT.
• Abel Finance: supply tAPT or stAPT to earn interest plus ABL token rewards - or borrow them at 60-65% LTV.
• PancakeSwap: become a liquidity provider for tAPT or stAPT and deposit the LPs in farms to earn up to 35% APR in CAKE.

The top 11 LSDfi projects

As of June 7, 2023, the LSDfi Summer dashboard on Dune Analytics estimated the space’s TVL at $414 million across the 10+ biggest protocols. Note that this number doesn’t include the far greater TVL of the liquid staking protocols themselves (Lido etc.), which is around $18.5 billion.

LSDfi protocols: a comparison

1) Lybra Finance

Lybra offers a stablecoin (eUSD) that pays a yield around 7.2% APY. Traditionally, stablecoins don’t bear any interest in themselves, unless you lend them or deposit them in liquidity pools or farms.. But here, you can simply hold eUSD and receive rewards. In addition, you’ll receive LBR tokens, which grant governance votes in the DAO.

The stablecoin is decentralized and overcollateralized by around 150%. The current (June 2023) TVL in eUSD is almost $90 million, with $190 million in stETH and ETH locked in the protocol. Between the start of May and the beginning of June 2023, Lybra experienced a very fast rise in TVL, from $15M to $200M at the peak. Lybra accounts for over 40% of the TVL of the top LSDfi projects.

Libra earns Ethereum staking rewards by holding stETH, and that forms the basis of the eUSD APY. Lybra Finance supports stETH and ETH as collateral for minting eUSD  and charges zero minting or borrowing fees. Alternatively, you can simply buy eUSD on a DEX and enjoy the yield. All ETH is converted into stETH.

For extra yield, you can deposit eUSD and USDC in a liquidity pool on Curve and then stake the LPs on Lybra to earn 13% APY in esLBR, an escrowed version of LBR. There is also a farming pool for LBR/ETH LP, with over 140% APY in esLBR. Finally, esLBR can be vested to get a reward boost.

This sort of convoluted scheme is typical for LSDfi. Protocols compete for users by offering multiple sources of rewards. Note, though, that the high APYs are denominated in volatile tokens, so the actual returns can vary wildly and be difficult to gauge.

If you don’t like such complex strategies, you can also sell the eUSD you’ve minted for ETH. Now you have more ETH than before (because the rest is staked as collateral on Lybra), so if the price of ETH goes up, you’ll earn an extra profit.

eUSD operates like an algorithmic stablecoin: if the price rises above $1, people will mint it and sell it on DEXes, bringing the price back to $1. If the price falls below $1, people will buy eUSD on a DEX and redeem it on Lybra for $1 in ETH or stETH.

UnshETH

UnshETH is a swap and yield optimization platform for LSD tokens on Ethereum and BNB Chain. One of its goals is to diversify the liquid staking landscape, ending the dominance of Lido’s stETH. As of June 12, unshETH had $31 million in TVL – the 4th-largest LSDfi protocol on our list.

You can deposit 6 different kinds of LSDs (Lido, Frax, Ankr, Coinbase, RocketPool, Swell), as well as ETH or WETH. In return, you’ll get unshETH tokens.  

1 unshETH corresponds to 1 ETH’s worth of the diversified basket of LSDs held by the protocol. So, when you redeem unshETH, you’ll receive a bit of everything rather than the exact tokens that you deposited.

There are a few things you can do with unshETH:

1) Stake unshETH in the protocol to earn rewards. The reward is composed of several parts:

• Current base ETH staking APR (around 4.3%);
• Swapping fees generated by the platform (0.02% per swap for most pairs);
• Farming rewards  - stakers earn USH governance tokens (5.3% APR in June 2023);
• unshETH minting and redemption fees (quite small).

The overall base APR on unshETH is around 10.3%, but there are also multipliers: if you stake unshETH for 60 days, you’ll get the maximum 4x multiplier.

Farming rewards on unshETH itself are in USH. USH can be used in farms on Sushi, PancakeSwap, and Balancer. Or, you can stake USH directly on unshETH to get vdUSH and use those to vote and earn more USH plus governance tokens from partner protocols.

2) Farming

• PancakeSwap (BNB Chain): deposit  unshETH-USDC,  unshETH-USDT, or  unshETH-USH LP tokens to farm CAKE (up to 100% APR);
• Balancer (Ethereum): deposit unshETH-ETH LP to farm USH and vdUSH (validator decentralization USH – a special voting token).

For swappers, unshETH offers AMM liquidity pools for all major LSDs, ETH, and WETH.

To summarize, if you have ETH parked on Lido, your interaction with the protocol could go like this:

Wrap stETH to get wstETH (or buy wstETH directly) →

→Deposit wstETH on UnshETH to get unshETH tokens

→ Stake unshETH to earn USH

→ Use USH to farm on PancakeSwap or Sushi (or stake USH to get vdUSH).

Gravita

Like Lybra, Gravita is a stablecoin lending protocol: you deposit LSDs to mint USD-pegged GRAI. Gravita supports WETH, wstETH, and rETH.

Gravita has an interesting mechanism called a stability pool. You deposit GRAI in this pool to participate in the profit from liquidations. When a position is liquidated, the collateral is sent to the stability pool and some GRAI is burned. You as a staker in the stability pool are essentially getting a share of that collateral at a discount. There is already 5.2 million GRAI in the pool.

Example: a user’s LTV ratio is 90%: they deposited $1,000 of collateral in wstETH and minted $900 of GRAI.  ETH drops, the value of the collateral falls to $950, and the position is liquidated. Those $950 in LSDs are sent to the stability pool, and 900 GRAI are burned. The stability pool now has $50 in assets more than before, so the pool members collectively made $50 in profit. If you redeem your stability pool share, you’ll get a bit more than you had deposited.

Gravita charges a 0.50% fee when you take out a loan, but it’s partially refunded if you redeem GRAI within 6 months. The earlier you pay back, the larger the refund, though you’ll pay one week’s worth of interest in any case.

Note that there is a 3% redemption fee: if you redeem $1 worth of GRAI, you’ll get $0.97 of LSD collateral back.

Gravita doesn’t have a token yet, so be careful if you see any announcements of an IDO or an airdrop: they could be fake.

Alchemix

Alchemix is a lending protocol with a twist: you borrow a synthetic version of the same token that you deposit. All collateral is in various derivatives of ETH (including LSDs), and all loans are issued in  Alchemix’salETH. This means no risk of liquidation, though the LTV ratio is only 50%: if you deposit 1 wstETH, you’ll get 0.5 alETH.

The platform uses your collateral to earn yields, which go towards repaying the loan. The collateral remains accessible, and you can pay back any time without fees.

You can use alETHfor yield farming on Saddle Finance in a stablecoin pool with WETH and sETH (Synth ETH by Synthetix) to earn up to 20% APY in SDL, or deposit the same Saddle alETH LP directly on Alchemix to farm ALCX at 6% APY.

You can also convert alETH into ETH at a 1:1 ratio and do whatever you like with it – for example, farm, or even deposit it as collateral on Alchemix again to get more alETH, convert it into WETH, and so on. Remember thatthe risk increases with every additional layer of complexity.

Alchemix launched in February 2021, long before LSDfi was a thing. It supports many non-LSD pools, such as Yearn yvUSDC and Aave aUSDT. As of the time of writing, all the LSD pools (rETH, wstETH, sfrxETH) were filled to capacity, but this can change.

Asymetrix

Asymetrix gamifies liquid staking with its no-loss lottery. Users deposit stETH in a pool, and the prize fund is all the staking yield generated by that stETH during one week. At the end of the week, three randomly selected winners (among those who contributed to the pool) share the prize fund. Verifiable randomness is ensured through Chainlink VRF.

The first prize is 50% of the total yield, the 2nd prize is 30%, and the 3rd is 20%. The draw is called “no-loss” because all the participants also earn ASX tokens at 18.40% APR.

Users don’t have to leave the pool and re-enter every time: you can simply leave your stETH there to participate in every weekly draw. Currently (June 2023) there is almost 10,400 ETH in the pool, with over 6 ETH distributed as prizes in every round.

Origin Ether

Origin DeFi is known mainly for its yield-bearing stablecoin, Origin Dollar and the NFT platform Origin Story. Both are underpinned by the OGN token.

Origin Ether (OETH) is a new product by the same team: a yield aggregator for staked ETH. You can deposit stETH, rETH, frxETH, sfrxETH (the latter using the Zap tool), as well as WETH, as collateral to receive OETH.

Part of the collateral is used to earn additional yields with rETH and frxETH, while the rest goes to provide liquidity on Curve via Convex to earn trading fees and rewards in CRV. Part of the resulting yield is allocated to buy Convex tokens (CVX), which are staked to generate even more rewards in CVX. That extra yield is converted into more OETH collateral. As a result, OETH holders see their balance increase every day and can redeem OETH for the original collateral and accumulated rewards at any moment.

Origin Ether (OETH) is a new product by the same team: a yield aggregator for staked ETH. You can deposit stETH, rETH, frxETH, sfrxETH (the latter using the Zap tool), as well as WETH, as collateral to receive OETH.  Part of the collateral is used to earn additional yields with rETH and frxETH, while the rest goes to provide liquidity on Curve via Convex to earn trading fees and rewards in CRV. Part of the resulting yield is allocated to buy Convex tokens (CVX), which are staked to generate even more rewards in CVX. That extra yield is converted into more OETH collateral. As a result, OETH holders see their balance increase every day and can redeem OETH for the original collateral and accumulated rewards at any moment.

Pendle

Of all the LSDfi protocols in our review, Pendle is probably the most complex. In a few words, it allows you to split the yield-bearing asset from the yield itself and then trade your expected future yields.When you deposit  0.5 stETH, you get two tokens: 0.5 PT-stETH (Principal Token, representing the main asset) and 0.5 YT-stETH (the yield token).

Both PT and YT have an expiry date (maturity), beyond which they lose value. As long as you have both YT and PT, you can convert them back into the original yield-bearing asset like stETH.You have to do this before they reach maturity.

One consequence of splitting the principal and the yield is that you can buy and hold just one of the tokens. You can buy PT on the AMM with a discount, but when you redeem it for the original yield-bearing asset, you’ll also get a bit less, if you don’t hold YT. By contrast, YT tokens make you eligible for the resulting rewards, but you can’t claim the staked ETH.

Here are a few possible strategies  for the two derivatives:

1. Trade the yield token or the principal token on an AMM;
2. Deposit liquidity via Pendle Pools to earn liquidity provider fees and rewards in PENDLE (up to 43% APR).
3. If you expect the price of ETH to rise, you can buy PT stETH at a discount in the Discounts section, then redeem them for ETH when the price reaches your target to realize a small profit.

Flashstake

Like Pendle, Flashstake separates the yield from the staked asset. The key difference is that you can claim your future yield in total as soon as you stake, without waiting for rewards to accumulate. The protocol charges a small fee, which is distributed as yield to FLASH token holders.

A very rough example: you have 1 ETH, which at 4% APR will yield 0.04 ETH if staked in Lido for a year. Instead, you can lock it on Flashstake, selecting the duration of 365 days, and receive 0.04 wstETH at once. However, your ETH will remain staked, and if you decide to withdraw it before 365 days have passed, you’ll need to return the yield for the remaining period, calculated at the future staking APR rate at the moment of repayment.

This strategy makes sense if you believe that more and more people will be staking ETH and so the APR will keep going down - as it has for the past couple of years. Let’s say that you still have 6 months to go on your stake, but the APR has gone down to 3.5%. Instead of 0.02 ETH (half of the yield at 4%), you’ll need to return 0.0175 ETH.

The actual APY formula is more complex:

(Note that 31,536,000 is the number of seconds in a year.)

How long you can flashstake and the APY depend on the asset; larger amounts and longer periods result in lower APY. For example, stETH earns 5.12% APR for 1 ETH and 90 days, but 4.88% for 10 ETH and a maximum duration of 365 days. With rETH, though, you’ll get only 4.24% for 1 rETH, and the maximum duration is just 90 days.

Raft.fi

At first glance, Raft is just like other LSDfi stablecoin protocols: deposit stETH or wstETH as collateral and mint R stablecoins. The minimum loan is 3,000 R, and the collateralization rate should be at least 120%. R can then be swapped on Balancer, Uniswap, Paraswap, or 1inch. There’s already $45 million worth of stETH locked in the protocol, and the average collateralization ratio is 173%.

However, Raft also has two killer features coming soon: flash minting and atomic stETH leverage.

1. Flash minting means minting R without collateral and burning it in a single transaction. It’s like flash loans, but the loan is issued by the smart contract instead of an external liquidity provider, and the gas fees are lower.
2. One-stop leverage. This feature allows you to leverage your stETH for up to 6x to earn a higher ETH staking APR (max 24% vs. 4%). It relies on flash minting:

1. Deposit some stETH as collateral
2. Flash-mint R
3. Swap it for stETH
4. Use stETH to borrow more R
5. Repay the original flash-mint loan with that R
6. Nnow you have more stETH than before.

This can be repeated several times to maximize the stETH, and the whole thing is done as a single complex transaction by the smart contract to minimize gas fees. Like any DeFi folding strategy, the risks become higher with every iteration, so don’t try this at home!

Raft is a governance-minimized protocol: most of it is hard-coded and immutable. It does plan to create a Liquidity Committee to vote on matters like protocol fees and incentives (like rewards for liquidity pools). The rewards part hints at a future Raft token, but it hasn’t been announced yet, so beware of scams.

Index Coop

Index Coop is a DAO that maintains a number of diversified DeFi pools. For each, it issues an ERC20 token that represents shares in the pool. This ERC20 token acts as an index, giving users exposure to a basket of assets.

The idea is for users to be able to enjoy the gains from several assets while saving on gas fees, since they buy a single token instead of different ones. The best-known of these indexes is probably DeFi Pulse.

Two of Index Coop’s pools feature LSDs:

1. Interest Compounding ETH Index (icETH) ($19.1 million TVL) - a leveraged liquid staking strategy where the money users deposit in icETH is used to buy stETH and deposit it as collateral on Aave. The strategy then borrows ETH, swaps it for stETH, and deposits it back into Aave for a leveraged borrowing position.

All that stETH earns a leveraged staking yield, and the strategy is profitable as long as the staking APY is higher than the borrowing interest on Aave.

2. Diversified Staked ETH (dsETH) - a much simpler strategy where Index Coop splits the funds between safe liquid staking protocols: rETH, wstETH, and sETH2 (StakeWise). The index had around $1.4 million TVL in June 2023.

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The purpose of both indexes is to gain exposure to LSDs without actually staking any ETH. Index Coop doesn’t need to stake any, either, and neither does it offer any yield maximization strategies like farming. As a result, the base APY is the same as for ETH staking (around 4%). There are no minting or redeeming fees, though there is a 0.25%-0.75% streaming fee.

Cat-In-A-Box

Cat-In-A-Box allows you to mint boxETH (an ETH-pegged stablecoin) using stETH as collateral. Those who deposit stETH without taking out a loan will get a share of the borrowing fees generated by the protocol, plus at least 99% of the ETH staking yield, so the total APR will be higher than with regular liquid staking.

If you borrow boxETH, you can use it to:

• Buy another asset on the DEX;
• Deposit liquidity in the stETH-boxETH pool to earn swapping fees;
• Resolve (repay) a portion of another user’s unhealthy debt (akin to liquidation) and make a small profit from arbitrage.
• Mint special fee tokens (boxFEE) and stake them for rewards in boxETH.

Moreover, if you maintain a higher-than-average collateralization ratio, you’ll earn a boosted yield. Overall, Cat-In-The-Box’s idea is to incentivize healthy borrowing behavior (rather than risky leveraging, folding etc.).

Maverick Protocol

Maverick is a popular AMM for LSTs (and not only): up to 30% of wstETH swap volume passes through the platform, with $1 billion swapped so far.

The DEX offers concentrated liquidity, similar to Uniswap v3 and Trader Joe’s Liquidity Book (see our detailed article on the topic). By the way, Pontem is working on a concentrated liquidity engine for Liquidswap, too, so stay tuned!

Liquidity providers can earn up to 15% APR with wstETH-ETH, or even 100% APR with wstETH-GAL (Galxe).

Maverick also offers Boosted Positions - a sort of private mini-pools where creators can incentivize (bribe) others to add specific tokens to the position. For example, the team of a new project can attract ETH to their token’s pool by offering incentives in that token. The maximum APY on a boosted position is over 250% (frxETH-FRX).

Bonus: 2 new blockchains centered on LSDs

Tenet

Tenet is a Layer-1 built for DeFi. It takes a number of best practices developed by DeFi protocols on other chains and integrates them natively into the fabric of the blockchain.

1. Diversified Proof-of-Stake that uses LSDs. Instead of letting validators stake just the native coin (TENET), Tenet supports PoS staking of LSDs bridged from different chains, such as stETH. Having multiple validator staking assets should make the network more resistant to attacks. For bridging, Tenet relies on LayerZero - one of Pontem’s key partners, by the way.
2. Liquid derivatives. Stakers will earn rewards and receive a special LLSD (second-layer derivative) to use in DeFi. Think of it as the first liquid staking token issued natively by a blockchain protocol.
3. Native LSD-backed stablecoin, LSDC. It will be overcollateralized by bridged stETH, rETH, ankrBNB, etc. Users will be able to mint LSDC without fees and even earn extra yields on their collateral.

4. Native gauges. In DeFi, gauges (pioneered by Curve) are a way to measure the liquidity provided by users. A pool must have a gauge to receive rewards in the protocol’s tokens (CRV on Curve), and those rewards are voted by the users who lock their CRV to get vote-escrowed veCRV. In return, protocols offer bribes to veCRV holders to vote for them.

Tenet implements the same mechanism at the blockchain level. Locking up TENET, you’ll receive veTENET and will be able to vote on which projects and validators should earn incentives. You’ll be rewarded with a share of their fees.

5. A native DEX and lending market, plus an AI-enabled cross-chain wallet (Eva) designed for beginner crypto users - with simple yield tools already integrated.
6. NFTs. TENET holders and stakers can get special Eva Loot Scanner NFTs that will make them eligible for airdrops and other rewards.

Tenet is in mainnet beta, and you can add it to MetaMask with the following parameters:

Name: Tenet Mainnet

RPC URL: https://rpc.tenet.org

ChainID: 1559

Symbol: TENET

Explorer: https://tenetscan.io/

KuCoin supports withdrawing TENET to the blockchain. On Android and iOS, consider using Eva Wallet for extra rewards.

Persistence

Persistence is a blockchain in the Cosmos ecosystem optimized to LSDfi dApps. It’s connected to chains like Cosmos Hub, Osmosis, Juno, and Terra via the Inter-Blockchain Communication Protocol (IBC).

Persistence has 100 validators and uses a consensus algorithm called ComeBFT – a modification of the Byzantine Fault Tolerant consensus. By the way, Aptos also uses a variation on BFT, called AptosBFT.

The core LSDfi dApp on Persistence, pStake Finance, is multichain and supports Ethereum, BNB Chain, Cosmos, and, of course, Persistence itself. You can stake ETH to get stkETH, or stake BNB to get stkBNB, and so forth. The DeFi part of the dApp works more as an  aggregator of opportunities on other platforms: swaps, yield farms, borrowing, margin trading, etc.

As of June 2023, ETH staking is paused to implement the changes related to the Shanghai upgrade. Arbitrum and Optimism should be coming soon, too, as part of stkETH v2. In the meantime, if you want to experiment with liquid staking of the Ethereum ecosystem, Persistence  and pStake Finance are an intriguing alternative.  

Persistence’s ecosystem also includes two other LSDfi dApps:

• Dexter: a multichain LSD DEX (though so far it supports only stkATOM, ATOM, and XPRT, all on Persistence);
• Bamboo: an LSD lending protocol (launching soon).

Conclusion

As the popularity of LSDfi spreads from Ethereum to other chains, we’re likely to see it on Aptos, too. And as the leading blockchain studio building with Move, we couldn’t be more excited about the future.

Are you working on an LSDfi protocol for Aptos? Then get in touch with Pontem on Telegram or Discord: let’s work together!

About Pontem

Pontem Network is a product studio building foundational dApps for Aptos. Our products include:

• Pontem Wallet -- the best Aptos wallet
• Liquidswap -- the first DEX (AMM) for Aptos
• Move Playground -- a simple browser Move code editor
• Move IntelliJ IDE plugin for developers

ByteBabel -- a Solidity-to-Move translator, and the first EVM for Aptos