As we all know, Lido is indeed the absolute leader in the field of staking protocols, but this is mainly due to its first-mover advantage. Today we will introduce other liquidity staking protocols that are quietly gaining momentum!
Liquidity Staking Derivatives (LSD) can be said to be one of the hottest topics in 2023. Through the Liquidity Staking Agreement, you can pledge your ETH to ensure network security. While giving staking rewards, you will also be given LSD. You can also LSD is used in DeFi.
As we all know, Lido is indeed the absolute leader in the field of staking protocols, but this is mainly due to its first-mover advantage. Today we will introduce other liquidity staking protocols that are quietly gaining momentum!
1.StaFi
StaFi Protocol is a decentralized protocol built using the Substrate architecture. You may not know much about the Substrate architecture. This is a blockchain architecture developed by Parity. The entire architecture integrates many development modules, including consensus modules, P2P modules, Staking modules, etc. , Avalanche uses the Substrate architecture.
The total amount of ETH staked on the StaFi network is currently 13,598.
StaFi takes the liquidity of pledged assets as the entry point and focuses on solving the circulation obstacles of assets locked on the chain.
rToken is a redeemable token for pledged assets issued by the StaFi protocol. Its issuance method is different from Lido. The number of rTokens (Qr) will be determined based on the number of native tokens pledged by the user (Qs) and the rToken exchange rate (Cr). The specific rule is Qr=Qs/Cr.
Let’s take an example to illustrate: I pledged 10 ETH (Qs=10). If the exchange rate of sETH I will get after staking is 0.01, then the amount I will get is 10/0.01=1000 sETH.
Currently, the public chain networks that the platform supports staking include Ethereum, Polkadot, Cosmos, etc.
2.Stakewise
The total amount of ETH pledged in the Stakewise network is 81,088, and the number of stakers is 3,000.
As another liquidity staking protocol, Stakewise's general logic is not different from Lido. Its special point is that it adopts a dual-pass model. What does it mean?
Simply put, separating the user's pledged ETH and the corresponding pledge income is equivalent to separating the principal and interest, and the corresponding derivatives are sETH2 and rETH2 respectively.
The reason for this is mainly to isolate risks and provide better liquidity.
Stakewise has also recently collaborated with some leading protocols, such as building Stakewise's DAO treasury through the Gnosis platform, and Stakewise has also deployed related services on the Gnosis Chain.
And in the upcoming StakeWise V3 version, users will be able to burn their sETH2 and rETH2 directly in the StakeWise application to claim their base ETH and rewards.
Regardless of Lido, Stakewise, or StaFi, there is still a lot of room for development. Why do you say that? Please look at the figure below. Currently, the number of ETH pledges only accounts for 19% of the total amount, while Solana has reached 71%, which is more than three times more than Ethereum.
This is also because Ethereum has just switched from POW to POS not long ago, so the number of pledges will naturally not be very large. Moreover, as the king of new public chains, Ethereum’s future development will definitely be bright. On the other hand, this is exactly what pledges are. A good advantage for protocol development is that it has enough time to carve out its own niche in the market.
