LRT Tokens: Making Multi-Chain Ecosystems Easier for DeFi Development
Stader Labs, a multi-chain staking facility, was created specifically for the application of LRT tokens. Can it really benefit from the Ethereum ecosystem?
Overview of the Application of SD Assets and Understanding the Context of Future Ecosystem Development
Stader Labs is an innovative company that focuses on research and development of blockchain and cryptocurrency technology in the rapidly developing cryptocurrency field. The SD token, developed by Stader Labs, has become a star token in the cryptocurrency market. The SD token not only serves as the core cryptocurrency of the Stader Labs platform but also plays an important role in various transactions and incentive mechanisms within the digital financial ecosystem. This article will introduce the details of this project.
As the native token of the Stader Labs platform, the SD token has many unique features and uses, including:
1. Node Operation Support: In order to maintain the security and stability of the network, node operators need to stake SD tokens to participate in network node operations. This not only helps protect the network from potential attacks but also provides node operators with an opportunity to earn rewards.
2. Incentive Mechanism: SD token holders have the opportunity to lend out their tokens and receive additional SD tokens as incentives, as well as a 10% deposit from node operators. This mechanism encourages the active use and holding of SD tokens.
3. Token Economics: Stader Labs has introduced $xSD, a new token economics that allows SD token holders to stake their tokens to earn $xSD. $xSD holders will share a certain proportion of protocol revenue and have protocol governance rights. Additionally, $xSD can be exchanged back to SD tokens within 7 days at the current exchange rate, providing holders with more flexibility.
4. Buyback Mechanism: The protocol will use a certain proportion of revenue to repurchase SD tokens and stake them as $xSD, providing support to the SD token market.
However, it is important to note that while the SD token has strong utility and potential, it also faces certain market pressures. In addition to the incentive mechanism for node operators, the unlocking of team shares of SD tokens began in January this year, which may have an impact on market prices.
Stader Labs is not just a participant in the Layer Relaying Token (LRT) protocol. Two months ago, they launched a liquidity staking token called ETHx, which has already attracted $32 million in deposits. Although Stader may be slightly late in the LST (LayerStone Token) game, they are in the early exploration stage of the LRT era.
In the cryptocurrency market, Stader has the SD token, which makes the possibility of airdrops unlikely. However, with the gradual dominance of the LRT narrative, the SD token may become an attractive bet.
Stader Labs raised a total of $16.5 million in seed funding and $23.5 million in ICO funding from multiple venture capitalists in 2021 and 2022, providing them with ample resources and funding to continue advancing the project.
Early investors are unlikely to sell their tokens immediately. The ICO round has been fully unlocked, while seed round investors still have approximately 75% of their tokens locked. Especially with the upcoming launch of SD token staking, do not expect them to sell before good news in the future.
Soon, we may see the launch of SD token staking on the mainnet to earn $xSD and participate in governance, with the potential to receive protocol fees (related proposals have been made in the governance forum).
Stader Labs will charge approximately 5% of rewards from staking, and the team stated that the current annual revenue of the protocol is $1.2 million. With the launch of ETHx, this digital revenue is expected to increase.
It is worth noting that once Stader Labs implements revenue sharing, it will become the first mainstream LSD protocol to adopt a fee conversion model.
In the short term, the inflation rate of SD tokens and how the team controls token issuance will be a focus of attention. Although SWISE has a high FDV/mcap ratio, it did not prevent it from doubling in just three days. The Stader Labs team plans to release a monthly token issuance plan in the governance forum.
The last concern is the transparency of Stader Labs. Information regarding the treasury address, token issuance rate, and revenue should be easily accessible on their website/documents, but in reality, this information is not provided.
However, after contacting the team, they stated that they will improve transparency in the future.
In the early hours of December 19, 2023, the EigenLayer network, a protocol for duplicate staking of Ethereum assets, underwent a notable upgrade. In addition to increasing the total staking limit of LayerStone Token (LST), several new LST tokens were introduced, including osETH (StakeWise), swETH (Swell Network), OETH (Origin Protocol), EthX (Stader Labs), WBETH (Binance), and AnkrETH (Ankr).
This upgrade made EigenLayer a network that supports nine different LST tokens, including stETH (Lido), rETH (Rocket Pool), and cbETH (Coinbase), which were supported from the early stages.
However, a key change brought about by this upgrade is that EigenLayer not only set the overall LST staking limit to 500,000 tokens but also set an individual limit of 200,000 tokens for each LST token. This means that the maximum staking amount for each LST token is limited to within 200,000 tokens. The current situation shows that the re-staking amount of stETH has already exceeded 170,000 tokens, and once it reaches 200,000 tokens, users will need to choose other LST tokens for re-staking. This highlights the market’s demand for different LST tokens and diversification.
Based on this, the EthX token launched by Stader Labs shows potential returns in two aspects:
1. DeFi Protocol Collaboration: Data shows that Stader Labs has already collaborated with major DeFi protocols on other chains, including Aave, Balancer, QiDao, QuickswapDEX, and Apeswap. Therefore, EthX tokens have the opportunity to earn higher returns from these DeFi protocols, providing more attractive rewards for holders.
2. Node Operator Incentives: In order to attract more node operators, Stader Labs will provide 1 million SD tokens as incentives for active node operators. Data shows that the total locked value (TVL) of Stader Labs has reached $91 million, while the market capitalization (MC) of SD tokens is $22 million.
By entering the Ethereum staking service market, Stader Labs is expanding its ecosystem, which is considered an important moment for its development. In addition, the SD token has successfully integrated into the Ethereum staking ecosystem, providing potential additional sources of income for SD token stakers. All these data highlight the current status and future potential of the Stader Labs market, attracting widespread attention from investors.
In conclusion, the SD token has great potential and deserves close attention. In terms of airdrops, depositing Swell Network (swETH) may be one of the best opportunities on the EigenLayer platform. As the protocol currently does not have its own token, this means that you may receive airdrops of both Swell tokens and EigenLayer tokens.
It is important to note that Stader ($SD) is undervalued in terms of market capitalization. Its market capitalization is only $30 million, while its total locked value (TVL) has reached $330 million, ranking fourth in the deposit amount of EigenLayer (ETHx).
The Stader Labs team has been working hard to continue developing and is transitioning to a mode similar to Rocket Pool, allowing validators to borrow SD, providing more opportunities for SD token holders to earn income.
However, it is important to note that this project is still in its early stages, and investors should be cautious and manage their risks.