Multi-Ecosystem LSD Development Report: The Track is Grand, the Project is Early Stage

Last week, we released the LSDFi ecological report and the report on the impact of the Shanghai upgrade on LSD, but primarily focused on Ethereum. This is because the amount of funds brought by Ethereum's liquidity staking alone exceeds 14 billion USD. This report will explore the development and gameplay of LSD in other public chain ecosystems, and observe the development trends of LSD in other ecosystems based on data, as well as its impact on the LSD industry. The public chains surveyed this time include: BNB Chain, Cardano, Polygon, Solana, Polkadot, Avalanche, Cosmos, and Aptos.

BNB Chain

The current staking status of BNB is similar to that of Ethereum, with a staking rate of 15.44%, and the average annualized return on staking is approximately 2.84%. Among them, the largest decentralized staking platform, Ankr, accounts for about 0.56% of the circulating supply.

The reasons for the slow development of LSD on the BNB Chain include:

1. BNB native DeFi protocol has high yield.
2. BNB has a wide range of uses, such as exchange fee discounts and participation in Launchpad.

The potential demand for LSD on the BNB Chain is much lower than that on the ETH chain.

Cosmos

The staking rate of Cosmos Hub is about 61.96%, with an average staking yield of approximately 25.92%. The scale of Cosmos's LSD is relatively small, with Stride being the largest Cosmos LSD project, and its total TVL is only 15 million USD.

Reasons for the slow development of Cosmos LSD:

1. Multiple chains within the ecosystem have yet to emerge from Cosmos.
2. The high staking yield brings opportunity costs.
3. Impact of Airdrop Mechanism
4. Liquidity Risk: 21-day unlocking period required

But Cosmos LSD still has development prospects:

1. Cosmos 2.0 will increase the value of ATOM
2. The DeFi infrastructure is gradually improving.
3. Provide governance functions such as proxy voting
4. Improve capital efficiency
5. External factors such as the impact of the Ethereum Shanghai upgrade
6. Cosmos is preparing to launch a liquidity staking model (LSM)

Polygon

The staking rate for Polygon is 39.92%, with an average annual yield of 8.82%. Lido has the highest APY on Polygon, and stMatic is widely used in DeFi. This may lead to Lido dominating the Polygon LSD sector.

Solana

The staking rate of the Solana network is 70.75%, and the average annualized yield for staking is 7.58%. Some early LSD projects have ceased operations, and new entrants like Stader may bring new developments.

Cardano

The current staking rate of Cardano is 68.73%, with an average annualized yield of 3.26%. Due to its unique technical architecture, LSD is difficult to develop within the Cardano ecosystem. Cardano staking does not lock assets, allowing users to participate in DeFi simultaneously.

Avalanche

The network staking rate of Avalanche is 62.05%, with an average annual yield of 8.48%. Benqi's sAVAX dominates, accounting for 1.7% of circulating AVAX. Avalanche's DeFi is developing well, but there is fierce competition between native projects and cross-chain projects, which may affect the development of LSD.

Polkadot

The staking rate of Polkadot is 47.05%, and the annualized staking yield is 15.29%. Due to the existence of the (Crowdloan) mechanism, the attractiveness of LSD is insufficient. Lido has suspended staking deposits for Polkadot and KSM, mainly because the DeFi ecosystem is relatively underdeveloped.

Aptos

The staking amount of Aptos nodes accounts for 82.5% of the supply, and the average annualized return for miners is around 7%. Although multiple LSD projects have emerged, most have stopped updating. The number of tAPT and stAPT holders is relatively high, reaching 45.2K and 29.9K respectively.

Summary

1. The multi-chain development of LSD business is an inevitable trend.
2. The UI/UX experience of most LSD projects needs improvement.
3. Centralized exchanges are an important factor that cannot be ignored.
4. The LSD protocol may pose risks after the new public chain is launched.
5. LSD has become a necessary DeFi protocol for public chains.
6. LSD may become a new growth point for income in established DeFi.
7. Wallet-side cooperation is worth the attention of the LSDFi project.

LSD not only brings profits, but also promotes network staking, enhances security, and provides liquidity for DeFi. The biggest influencers in the LSD battle may be node operators and centralized exchanges. The future market size of LSD is promising, but attention must still be paid to the long-term operational capabilities of the projects.