Bluechip LSDfi Make Waves in DeFi Space: A Closer Look at the Top Performers

By 0xGorki 05/29/23 4:58 AM

The decentralized finance (DeFi) sector continues to witness impressive growth and innovation, with various projects attracting significant attention and investment.

In this article, @defi_mochi will delve into the top bluechip LSDs (Liquidity-Sensitive Debt) and explore their performance within the DeFi ecosystem. These tokens, which include stETH, wstETH, rETH, cbETH, and sfrxeth, have caught the eye of investors and users seeking to leverage their features for yield generation and liquidity provision.

17.9% of $ETH is staked

According to @DefiLlama there’s up to $17.214B LSDs looking for yield

LSDfi is positioned to be the strongest narrative to benefit from this but who’s attracting the most users and TVL? I crunched data 📊 with @DuneAnalytics to help you find out!
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0/10 pic.twitter.com/sQyOfNQ5Cm

— Defi_Mochi (mochi, mochi 🍡) (@defi_mochi) May 28, 2023

Growth Leaders and Major Milestones

Among the top bluechip LSDs, frax ether emerged as the frontrunner, boasting an impressive growth rate of 8.85%. Its dual model has proven to be a major contributor to this success, attracting investors seeking both stability and yield opportunities.

Another standout performer was Lido Finance, which saw over $700 million worth of ETH flow into its platform with the rollout of Lido V2. This achievement speaks to the growing demand for staking solutions and the trust users place in Lido Finance’s offerings.

LSDfi Protocols and Token Lockups

Several prominent LSDfi protocols, including Lybra Finance, Alchemix Finance, Unsheth, OriginDeFi, Gravita Protocol, Pendle Finance, and Asymetrix, have played a significant role in facilitating the use of LSD tokens.

However, despite the potential of these tokens, the total value locked (TVL) in these protocols currently stands at only $251,578,952, accounting for less than 1.46% of the $17.2 billion worth of LSDs in circulation. This suggests ample room for growth and further adoption within the DeFi landscape.

Surge in TVL and Net Inflows

Most LSDfi protocols experienced substantial surges in TVL, except for Alchemix Finance and Unsheth, which struggled to sustain their initial hype. Notable early movers that attracted significant inflows included Unsheth and Pendle Finance, thanks to their respective unique offerings. Lybra Finance, Curve Finance, and Pendle Finance managed to sustain LSD deposits consistently, highlighting their ability to capture and retain market share.

Market Share Dynamics

The market share of LSDs can be better visualized through a chart, illustrating the dominance of Lybra Finance, which captured over 43% of the TVL within a month. Flashstake, Curve Finance, and OriginDeFi have also demonstrated steady growth and market share expansion following the initial wave of adoption.

Preferred LSDs in DeFi Protocols

When examining the most commonly used LSDs across protocols, it comes as no surprise that stETH and wstETH dominate, constituting more than 77% of all LSDs locked within these protocols. On the other hand, sfrxETH lags significantly behind at 11%, but still represents more than 10% of all sfrxETH in use within LSDfi. It is worth noting that sfrxETH has seen strong growth in the past seven days, indicating increasing popularity.

CDP Market Share and Future Expectations

Lybra Finance currently holds a staggering 88% market share in terms of LSD collateralized debt positions (CDPs). The only competitor in this space is Gravita Protocol, which has yet to airdrop its token. The launch of raft.finance presents an interesting opportunity to observe changes in market share dynamics.

Final Thoughts

In conclusion, the performance of bluechip LSDs in the DeFi space has been remarkable, with notable growth, TVL surges, and market share dynamics. Projects like Lybra Finance, Pendle Finance, and Flashstake have demonstrated their ability to capture user interest and establish themselves as leaders within specific niches. As the industry evolves, it will be crucial for these projects to continue innovating and meeting the changing demands of users in order to maintain their positions in the competitive DeFi landscape.

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