Liquid Staking Derivatives (LSDs) don dey hot since 2023. Dis na protocols wey dey take your deposited ETH, stake am to secure di network, and den share staking rewards with holders of dia LSD (minus small small charges). Dis one make am easy for pipu wey wan stake, and e still allow dem use dia LSD for other DeFi matter.

Today, we go reason some of di LSD issuers wey dey show potential and dem dey compete with di ogbonge Lido for technology, economics, and simplicity.

– Lido dey dominate market share mostly because dem enta di game "early and dem dey everywhere." Dem don leverage dia network effects to become di "safest" option for pipu wey dey enter di ETH staking world.

So, how other protocols fi compete?

Pipu wey dey di market dey act based on wetin go benefit dem, even if some purists no gree accept am. To overthrow di king (or even reduce im dominance), di newcomers suppose dey offer something way better pass Lido.

For our own eyes, some of di advantages wey dem fi get na:

🤑 = Higher returns

⛴️ = Easy entry for pipu

↔️ = More composability and/or security

⭐ = Something new

For today report, we go focus on five contenders wey still dey early stage and dem dey try make name for diaself by offering fresh solutions for di world of LSDs.

1. Prisma Prisma wey don burst ground with dia first Mirror article, dem don crown diasef as di "endgame for liquid staking tokens." Prisma wan use Curve flywheel to make dia stablecoin (acUSD) popular for adoption. Dem dey follow example of projects like Gravita and Lybra, as Prisma dey use Liquity's model and modify am so acUSD fi dey minted using any of di top five LSDs (Lido stETH, Coinbase cbETH, Rocket Pool rETH, Frax frxETH, and Binance WBETH). How di weightings and future integrations go be, e still dey to be determined.

Based on theory, pipu go get more motivation to stake dia ETH using liquid staking tokens if dem fi hold acUSD.

🤑 Apart from di normal ETH staking rewards, pipu wey provide liquidity for acUSD go receive CRV, CVX, and PRISMA tokens plus trading fees. ↔️ Prisma go start with important integrations from day one, including Curve, Convex, Frax, Conic, and LlamaNodes.

Swell

Swell don dey receive plenti attention from di community because of dia current Voyage incentive program. Swell swETH LSD don skyrocket and e don reach over $50M in total value locked (TVL). Swell dey market diasef as pipu wey dey align with Etherean values, and dem wan make onboarding process easy for new users.

⛴️ Users fi buy ETH directly through Google/Apple Pay, credit card, or bank account from inside dia app.

🤑⛴️ Dem get partner integrations wey allow users earn yield directly on dia swETH by providing liquidity.

unshETH

unshETH aim na to encourage competition for di LSD market, and dem dey offer diversified LSD wey consist of different underlying LSDs. Di weightings of di different LSDs for di basket dey balanced thru governance, and for now, dem include Lido wstETH, RocketPool rETH, Coinbase cbETH, Frax sfrxETH, Anker ankrETH, and Swell swETH.

🤑 Apart from di regular staking rewards from di underlying LSDs, unshETH still dey earn extra yield from rebalancing fees.

↔️ As unshETH dey built on LayerZero, e mean say unshETH fi dey transferred natively across different chains, wey give room for new liquidity strategies.

⭐ As dem include emerging LSD projects for unshETH, e go create new demand for those projects, and dis fi make unshETH dey obvious choice for potential launch partners.

Origin Ether

Origin Ether dey combine automated yield generation strategies with native Ethereum staking rewards, Origin Ether fi offer attractive rewards for pipu wey deposit. Just like other LSDs wey we mention, OETH dey backed 1:1 by deposited ETH, and dem distribute am across DeFi to find yield. As of now, di yield dey come from di following (based on weight):

• ETH-OETH Convex liquidity pool

• Rocket Pool's rETH

• Frax's sfrxETH

• Lido's stETH

Di high yields don allow Origin Ether gather around $71.2M in total value locked (TVL) for short time.

🤑 APRs for Origin Ether for di past 30 days don dey around 9%, wey be x2 of some of dia competitors.

⛴️ Origin's automatic strategies remove di stress for users, as dem no need dey search up and down to find di best yields.

Diva

Diva get hope to combine di composability of liquid staking with di decentralization wey come from Distributed Validation Technology. For simple terms, DVT dey allow make validator private keys fi dey distributed in a verifiable manner thru trust-minimized key-shares. For practical terms, users fi combine di composability of an LSD with most of di decentralization benefits wey dey come from running dia own ETH node, and dem no need any minimum stake for am to happen.

What is Distributed Validator Technology (DVT)?@divastaking combines:

• 🌊 Liquid Staking

• 🤔 DVT

• 🤝 Trustlessness

to offer maximum composability & uptime without sacrificing security 🔒

Let's learn how 🧵👇 pic.twitter.com/k4GS5Q39UQ

— 563 (@563defi) June 30, 2023

⭐ DVT na new technology wey bring extra decentralization to ETH staking.

🤑 DVT dey allow node redundancy and e still improve uptime, wey dey help stabilize rewards.

Make we dey look

Make we dey look Make we take one step back and get some perspective - as di Merge don happen recently, ETH staking still dey for early stage. If we compare am to other Proof-of-Stake (PoS) Layer 1 networks, di percentage of ETH wey pipu dey use for staking still dey below 20%.

If we go assume say ETH staking go eventually align with di majority of PoS, e mean say enough time still dey for staking protocols to carve out dia own niche for di market. We don showcase some projects wey dey offer dia own unique approach to liquid staking derivatives, weda na easy onboarding, new technology, new use cases, or even higher APRs. E get plenti things wey dey make person excited for LSDfi.

Make una make sure una share give una padi dem, tell dem say make dem come read about web3 for pidgin. Una sabi as e be na!

Well done..