The LSDFi (liquid staking tokens) protocol achieved an unprecedented milestone on May 27. The protocol witnessed a staggering inflow of $25 million in a single day, marking a record high. Among the contributors to this remarkable achievement, Lybra Finance emerged as a dominant player, contributing $24 million.
With a total value locked (TVL) of approximately $250 million, the LSDFi ecosystem encompasses several prominent projects, including Lybra Finance, Pendle, Unsheth, and Alchemix.
Within the LSDFi ecosystem, several projects have contributed to its remarkable TVL. At present, Lybra Finance accounts for 48.3% of the total value locked, highlighting its significant market presence.
Following closely, Pendle occupies 15.9% of the TVL, while Unsheth accounts for 12.9%. Additionally, Alchemix holds 5.3% of the LSDFi protocol’s TVL. This diversified distribution showcases the strength and participation of various projects within the LSDFi ecosystem.
What is LSD & LSDFi?
LSD (Liquid Staking Derivatives) is a new financial product that allows users to unlock the value of their staked assets without losing their ownership or control of those assets. LSD works by creating a derivative that represents the value of the staked assets. This derivative can then be traded on decentralized exchanges, providing users with access to liquidity and capital efficiency.
LSDFi (Liquid Staking DeFi) is a sub-category of DeFi that focuses on the use of LSD. LSDFi protocols allow users to earn additional yield on their staked assets by lending, borrowing, or staking their LSD derivatives. This provides users with a way to increase their returns on their staked assets while still maintaining exposure to the underlying asset.