LSD 2.0: Patterns, Data, Trends, Returns and User Analysis

The LSDFi ecosystem is rapidly developing, with most of the predicted products already emerging, such as stablecoins that support LST and governance competition triggered by veToken. This article will analyze the landscape, data, trends, returns, and users of LSD-related projects.

Pattern

The LSD track has formed a preliminary pattern:

• L0: DVT service providers, such as SSV Network, Obol Labs, etc.
• L1: LST issuers, such as Lido, Ankr, Coinbase, etc.
• L2: DeFi products based on LST, such as fixed income, stablecoins, yield aggregation, etc.
• L3: Products based on L2, such as StakeDAO, Equilibria, etc.

Overall:

1. L0 has the highest technical barrier, and attention should be paid to the actual utility of the tokens.
2. L1 has already seen a leader, making it difficult for new entrants to shake the TOP3 position.
3. The L2 moat is not high, testing the capabilities of the team and BD.
4. L3 has great development potential, but is limited by the development level of L2 products.

Data and Trends

Pledge Rate

After the Shanghai upgrade, the ETH staking rate has steadily increased, breaking through 16% in June. It is expected to stabilize around 25% in the future, with the main reasons:

1. ETH has a high degree of decentralization.
2. Strong practicality, with many application scenarios
3. L2 and multi-chain decentralized the staking demand
4. Compliance Considerations

LSDFi will promote an increase in staking rates, but no projects have emerged on the L2 level that can support a large amount of ETH.

Centralized vs Decentralized Staking

The decentralized staking platform accounts for less than 40%, CEX accounts for 20%, and the rest is node staking and individual staking. Lido accounts for 31.8% of the total staking share, raising concerns about centralization.

The L1 platform is adopting technologies such as DVT to enhance decentralization. It is expected that the Top 3 leading positions will be maintained, but diversification of L1 is an inevitable trend.

Yield Rate

High yield and sustainability are two important factors of LSD. Stakers can increase their returns through the following methods:

1. Choose LST with more use cases.
2. Use leverage to improve capital efficiency
3. Participate in L2 products
4. Participate in new project IDO or reward activities

Sustainable projects typically have low returns, with primary sources of income including:

• Token Incentive
• Lending Fees
• LP liquidity pool fees
• Derivatives Hedging
• Eigenlayer fee subsidy
• Product trading fee/commission

Quality projects should combine real returns, application scenarios, and good token economics.

L2's LSD

The distribution of mainstream LST on L2:

• Arbitrum has the highest quantity
• Optimism second
• Polygon and other chains also have distribution

Low transaction fees and fast speeds on L2 are important directions for LSD development.

User Level

Different users focus on different factors, including security, yield rate, degree of decentralization, token economics, UI/UX, usability, etc.

L0 mainly for VC investment, L1 has big players participating, L2 attracting various users. L2 The market space is still very large.

Summary

The LSD ecosystem is developing rapidly, but the user base is limited, mainly consisting of experienced Web3 users. The real "LSD Summer" may have to wait until a bull market arrives.

Future trends:

• Project cross-level development
• Expand to L2
• Design products for different assets

Investors should choose products with high security to build strategies based on their own risk preferences and be wary of scam projects.