Multi-Ecosystem LSD Development Report: Grand Track, Early Stage Projects

Last week, we released the LSDFi ecosystem report and the report on the impact of the Shanghai upgrade on LSD, focusing mainly on Ethereum. This is because the amount of funds brought in by liquid staking on Ethereum alone exceeds 14 billion USD. Today, this report will explore the development and gameplay of LSD in other public chain ecosystems, examining the development status and trends of LSD in other ecosystems from a data perspective, as well as its impact on the LSD industry, and discussing the design and legitimacy of LSD products. The public chains surveyed include: BNB Chain, Cardano, Polygon, Solana, Polkadot, Avalanche, Cosmos, Aptos(, and some public chains ranked in the top 25 by market capitalization on Coingecko).

BNB Chain

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

The development of LSD on the BNB Chain is relatively slow, mainly due to the following reasons:

1. The native DeFi protocol of BNB has high yield, with 80% of the 337 trading pairs involving BNB exceeding the average annual staking yield.

2. BNB Utility:

• BNB is the platform token of the Binance exchange, holding it can earn you services such as fee discounts.
• Binance has dedicated services such as Launchpad to attract users to keep BNB in their wallets or exchanges.

For traders, whether it's placing on Binance for fee discounts or participating in DEX's DeFi products, the returns and stability are higher than LSD. In the BNB Chain, the potential of LSD is much lower than that of the ETH chain.

Cosmos

The staking rate of Cosmos Hub is about 61.96%, with an average staking yield of approximately 25.92%, and it takes 21 days to withdraw the stake. The staking status of Cosmos is technically distinctive compared to ETH and BNB chains, as ATOM serves only as the token for Cosmos Hub, and application chains within the ecosystem can operate without using ATOM tokens.

Reasons for the small scale of Cosmos ecosystem LSD:

1. There are many similar L1 chains in the ecosystem, but they are currently unable to step out of Cosmos.
2. High pledged yield rates bring opportunity costs
3. Airdrop: LSD staking cannot receive airdrops from ecological projects.
4. Liquidity Risk: ATOM staking for LSD will take 21 days to unlock and be credited.

But Cosmos LSD still has great prospects:

1. Cosmos 2.0 will enhance the value and composability of ATOM.
2. The DeFi development of Osmosis and Kava provides infrastructure for LSD.
3. New LSD protocols such as Stride and Quicksilver provide governance features like proxy voting.
4. Can solve the capital efficiency problem caused by the 21-day unlocking period.
5. The LSD War brought about by the Ethereum Shanghai upgrade will indirectly promote the development of Cosmos LSD.
6. Cosmos is preparing to launch a liquid staking model (LSM)

Polygon

The staking rate for Polygon is 39.92%, with an average annualized return of 8.82%. Lido's APY is the highest on Polygon and holds an important position in DeFi, which may lead to Lido dominating the Polygon LSD space.

Solana

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

Cardano

The current staking rate of Cardano is 68.73%, with an average annualized yield of 3.26%. Cardano's unique technical architecture makes it difficult for LSD to develop within its ecosystem, as ADA staking is flexible and has no penalty mechanism.

Avalanche

The network staking rate of Avalanche is 62.05%, with an average annual yield of 8.48%. The leading LSD project Benqi holds 1.7% of the circulating AVAX, and sAVAX has strong liquidity. Avalanche's DeFi development is relatively good, but there are fewer LSD projects, which may be related to its DeFi landscape.

Polkadot

The staking rate of Polkadot is 47.05%, with an annualized staking yield of 15.29%, and a staking lock-up period of 28 days. Due to the existence of the crowdloan ( mechanism, LSD is not attractive enough in terms of yield, leading to many DeFi projects being built around PLO. Lido has suspended staking deposits for Polkadot and KSM, citing reasons such as an underdeveloped DeFi ecosystem.

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) Aptos

The node staking amount of Aptos accounts for 82.5% of the APT supply, with miners averaging an annualized return of around 7%. Although many Aptos-related LSD projects have been discovered, most have ceased operations. The number of holders for tAPT and stAPT is relatively high, reaching 45.2K and 29.9K respectively.

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) Summary

1. The multi-chain nature of LSD business is an inevitable trend.
2. Many LSD projects have poor UI and UX experience.
3. Centralized exchanges are an important factor that cannot be ignored.
4. The LSD protocol may become inactive after the new public chain goes live, so choose carefully.
5. LSD has become an essential DeFi protocol for public chains.
6. LSD may become a new growth point for traditional DeFi income.
7. The wallet may become an important partner for LSD project collaborations.

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) Discussion

1. LSD needs to consider the correctness of staking, participating in governance, and maintaining network security.
2. LSD is backed by the second most valuable cryptocurrency ETH in the crypto world, which has huge market potential.
3. LSD from other chains can promote network staking and DeFi development.
4. The biggest influencers in the LSD battle may be node operators and centralized exchanges.
5. Non-PoS network native assets may also design LSD-type products.