Liquid Staking Derivatives (LSDs) of Ethereum are becoming increasingly popular among cryptocurrency investors. Just look at the recent returns of tokens such as $LIDO, $RPL, and $FXS.

However, for the average investor, choosing which LSD to use can be a daunting and confusing task, they are faced with a number of complex decisions:

• Do you deposit your assets into the pool with the largest market cap? (Lido)

• Do you deposit into the pool with the highest APR? (Frax)

• Do you deposit into a centralized pool? (Coinbase)

• Do you consider the price volatility of the LSD in comparison to ETH and risk not getting 1:1 return on your deposit?

MoonRock Finance’s $LSETH solves this problem. LSETH is a liquid staked ETH index token. They are designed to mitigate this risk by creating a basket of five LSD tokens at equal weighting:

• Wrapped Lido Liquid Staked Ether (wstETH),

• Staked Frax Ether (srfxETH),

• Coinbase Wrapped Staked Ether (cbETH),

• Rocket Pool Ether (rETH),

• Ankr Staked Ether (ankrETH).

The key benefit here is diversification. LSETH offers to the investor a diversified portfolio of liquid staked Ethereum assets, which can help to mitigate risk and increase potential returns over time. Other benefits of index diversification include:

• Reduced price volatility

• Reduced exposure to token premiums

• Automated token updates with no gas costs

• Minimal price impact (ie. asset decay) from turnover due to equal weighting

The reduced volatility of LSETH compared to the underlying LSDs can be seen in the price chart below:

Overall, LSETH offers a compelling investment opportunity for ETH stakers who are looking for exposure to a diversified portfolio of LSDs with the potential for higher returns, lower costs, and reduced volatility over time.

LSETH is available on Uniswap and Argent can be minted on TokenSets. There is also a Liquidity Mining Incentive pool on xToken Terminal where users can currently earn 70% APR for staking LSETH-WETH liquidity.