DeFi protocols co-exist as plug-and-play money legos without all the convoluted BS and red tape of licenses and copyrights that plague the TradFi industry.

Within DeFi, a new prodigy is taking this paradigm to the next level - LSD-Fi.

Just look at PENDLE's incredible 4000%. It's clear that LSD-Fi isn't just keeping up with DeFi - it's racing ahead. 

But with such huge gains already made, many ask, 'Did we miss the LSD-Fi wave?'

Now, let’s answer the question.

TLDR📃

• LSD-Fi is expanding 10x faster than DeFi, opening avenues for potential investors.
• The surge in stablecoin innovations is fueling further growth and competition within LSD-Fi.
• The minimal utilisation of Liquid Staking Tokens in LSD-Fi suggests a largely unexplored market.
• Given its strong performance and exciting prospects, LSD-Fi is a must-watch DeFi sector in 2023.

Disclaimer: Not financial or investment advice. Any capital-related decisions you make is your full responsibility.

Surveying the LSD-Fi terrain 🌋

To understand LSD-Fi's trajectory, let's rewind to DeFi's growth in 2020/21.

What took DeFi a year, LSD-Fi is doing in months - it's scaling 10x faster.

Since April, protocols have been sprouting, and Total Value Locked (TVL) is soaring exponentially. The numbers are startling - a 500%+ surge in TVL in just three months.

LSD-Fi's meteoric rise hasn't escaped the eyes of the Centralized Exchanges (CEXs), who are quick to ride this tidal wave of volume.

Binance, among others, has recently listed PENDLE, capitalising on the feverish hype. This move has thrust PENDLE into the mainstream limelight, and it's only a matter of time before other LSD-Fi tokens follow suit.

But does this spate of exchange listings signal the climax of the LSD-Fi rally?

The fundamentals line up ✨

To know if we're nearing the end of the LSD-Fi rally, we need to dig into the data:

LSD-Fi's Total Value Locked (TVL) is experiencing a breathtaking expansion. In comparison, DeFi's total TVL has seen a modest ~17% growth since the start of 2023. It doesn't take a data scientist to see LSD-Fi's stunning outperformance.

So, the momentum is there.

But how sustainable is it?

Short answer: very sustainable. 

Even as TVL and token prices for PENDLE and LBR have shot up, there's an intriguing fact.

Less than 4% of Liquid Staking Tokens (LSTs) issued by the largest decentralised liquid staking providers are currently used in LSD-Fi.

To recap:

• LSD-Fi TVL: $630 million.
• LST TVL: $20 billion.

It's crucial to remember that these figures emerged during a bear market, painting an even more promising picture of LSD-Fi's resilience and potential.

So, have we reached the end of the line with the exchange listings of LSD-Fi tokens? Quite the contrary - we're just warming up. Continued growth hinges on increased awareness, which depends on the ease of access to these tokens.

The stablecoin market heats up 🛎

As the drama around UST stablecoin unfolds, it's time to shed light on the emerging stablecoin innovations in the LSD-Fi space.

A competitive landscape is taking shape in the Liquid Staking Token (LST)-backed stablecoin sector. The demand for these stablecoins is skyrocketing, clocking in at an impressive ~$184 million in circulating stables within just a few months.

The frontrunner in this race is Lybra Finance (LBR) with its eUSD stablecoin, a major catalyst for the LBR token's spectacular gains. But the market is ripe for innovation, and a new contender is about to enter the ring.

Lucid Finance is gearing up to introduce a fresh stablecoin, Digital USD (DUSD). Much like Lybra's offering, DUSD is backed similarly, but it brings a unique twist - integration with the LayerZero infrastructure, enabling cross-chain compatibility for DUSD.

While it hasn't officially launched, plans are underway to make eUSD available on Arbitrum, Optimism, and Polygon shortly after the launch. Given that LayerZero connects to various other chains, it's safe to assume DUSD will enjoy widespread accessibility.

This is yet another testament to the potential of blockchain composability.

While we await confirmed launch dates, rest assured we'll delve deeper once more information comes to light!

Cryptonary’s take 🧠

The numbers don't lie. 

Considering the rapid development, innovative strides, enormous potential market, and the relatively modest market caps of many LSD-Fi protocols, it seems clear that having a stake in LSD-Fi should be part of your game plan. It feels as if we're witnessing the sequel to the 'DeFi Summer'.

To circle back to our initial question - have you missed the boat?

The answer is a resounding “No”.

Sure, we're not suggesting you pour your entire savings into LSD-Fi. But when performance speaks volumes, as we mentioned last month, it's hard to look the other way.

Monitoring the evolution of this sector in recent weeks and foreseeing the opportunities poised to emerge with the roll-out of new protocols, we're convinced that LSD-Fi is the space to keep a keen eye on for 2023.

As always, thanks for reading.🙏

Cryptonary, out!

Other news

• Over $100 million in token unlocks across three protocols are set to hit the market throughout July, with APE (4.23% of supply), OP (3.75%), and APT (2.17%). Historical token unlocks from these protocols have led to a short-term downside - be aware if you’re a holder.
• On Friday, Celsius was permitted to liquidate altcoins for BTC and ETH to repay creditors. Tokens impacted include MATIC, ADA, LINK, LTC, and BCH. Additional selling pressure is likely over the short term.
• The long-awaited dYdX Chain testnet is set to launch today. For those interested, dYdX has encouraged users to provide feedback.
• After losing $600 million in the largest hack in DeFi history in 2021, Poly Network has been hit with another exploit. Up to $10 million has been stolen by the hacker. Yikes.

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