Grunnleggende konsepter
LSD market dynamics and financial implications analyzed.
Sammendrag
The content explores the emergence of Liquid Staking Derivatives (LSDs) in response to Ethereum's transition to Proof-of-Stake consensus. It delves into the market dynamics, arbitrage opportunities, and financial outcomes for liquidity providers. The study categorizes token mechanisms, quantifies price discrepancies, measures APR for liquidity provision, and compares profitability between holding LSDs and providing liquidity on DEXs.
Structure:
- Introduction to Staking Concepts
- Emergence of Liquid Staking Derivatives (LSDs)
- Token Mechanisms Systematization
- Price Discrepancy Analysis for stETH and rETH
- Arbitrages with LSDs
- Liquidity Provision Measurement
- Comparison of PNL for Holding vs. Providing Liquidity
Statistikk
Our results show that 66% of LSD liquidity positions generate returns lower than those from simply holding the corresponding LSDs.
We identify 325.6k ETH (683.8m USD) arbitrage amount caused by price discrepancies since the inception of LSDs.
We find that on average, P 2nd stETH is 0.83% lower than P 1st stETH.
Sitater
"Users can stake any desired amount of ETH on liquid staking platforms to receive the corresponding LSD."
"Liquidity providers enable retail users to collectively engage in the network’s validation process and earn staking rewards."