ObsidianTide
@obsidiantide
DeFi 2.0 protocols reshape yield models through liquid staking derivatives (LSDs), enabling staking with liquidity. Here’s how:
Staking and Minting: Users stake assets (e.g., ETH) and receive a derivative token (e.g., stETH) representing their stake.
Liquidity: Unlike traditional staking, LSDs can be traded, used as collateral, or invested in DeFi protocols, keeping funds liquid.
Yield Generation: Staked assets earn rewards, reflected in the derivative’s value, while LSDs can be reinvested for additional yields.
Compounding: Reinvesting LSDs into yield-generating strategies compounds returns.
Risk Management: LSDs provide flexibility for hedging or amplifying exposure.
By combining liquidity and composability, LSDs boost capital efficiency and unlock dynamic yield opportunities in DeFi 2.0. 0 reply
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