Analysis and Outlook of LSDFi Ecosystem Development Status

The LSDFi ecosystem has initially formed a pattern, which can be roughly divided into four levels: L0-L3.

Layer 0 primarily consists of DVT technology service providers, such as SSV Network, Obol Labs, etc. DVT technology can enhance the security and stability of validators.

Layer 1 is the LST issuer, such as Lido, Ankr, Coinbase, etc. Currently, Lido occupies 74.45% of the liquid staking share, combined with Rocket Pool, it accounts for 82.5%. LST issued by centralized exchanges accounts for over 12%.

The L2 layer is a derivative product based on LST, including fixed income, stablecoins, yield aggregation, etc. Among them, stablecoin projects are the most numerous, but there are fewer lending and leveraged projects.

The L3 layer is a project built on top of L2 products, such as StakeDAO, Equilibria and other veToken governance competition projects, as well as tools for automatic reinvestment and yield optimization.

Overall:

1. The L0 layer has the highest technological barriers, but attention must be paid to the actual utility of the tokens.

2. The L1 layer has formed an oligopoly, making it difficult for new projects to shake the TOP3 positions.

3. The competition on the L2 layer is fierce, testing the team's capabilities. The more basic DeFi strategy projects there are, the more prosperous the L2 ecosystem.

4. The development of Layer 3 is limited by Layer 2, but there is a larger space for imagination, and it requires time to develop.

The staking rate has steadily increased after the upgrade in Shanghai, breaking through 16% in June. It is expected to stabilize around 25% in the future, mainly influenced by factors such as the degree of decentralization of ETH, its practicality, and external scalability.

Centralized and decentralized staking platforms each have their advantages. Decentralized platforms account for less than 40%, CEX accounts for 20%, and the remainder is made up of node staking and Solo Staking. The diversification of L1 in the future is an inevitable trend.

In terms of yield, the nested doll strategy can increase the staking yield to over 10%. Long-term sustainable projects usually have low yields, but possess real returns + application scenarios + good token economics.

The development potential of LSD on L2 is immense, with the highest quantity on Arbitrum. Early deployment on L2 has the opportunity to seize liquidity.

Users' demand for staking mainly includes aspects such as security, yield, degree of decentralization, token economics, UI/UX, and ease of use.

Overall, while LSDFi is difficult to compare with DeFi Summer, it still has a good development prospect. In the future, it may come alongside a bull market, and it is worth paying attention to cross-layer products and Layer 2 development. Stakers should choose products with higher security to build their strategies based on their own risk preferences.