Analysis of the LSD Ecological Pattern and Development Trends

The LSD track has formed a preliminary pattern, which can be divided into the following levels:

L0: DVT technology service providers, such as SSV Network, Obol Labs, etc. SSV Network, as the first project to issue a token, holds a brand advantage.

L1: LST issuers, such as Lido, Ankr, Coinbase, etc. Mainly adopting a commission model, user earnings come from ETH's POS income. Lido currently holds 74.45% of the liquid staking market share, with Rocket Pool accounting for a total of 82.5%.

L2: Products such as fixed income, stablecoins, and yield aggregation designed based on LST, namely LSDFi. The number of stablecoin projects is the largest, while lending and leveraged projects are relatively few. Some projects improve yields through Token subsidies, but a decline has generally occurred after the Shanghai upgrade.

L3: Derivative applications developed based on L2 products, such as StakeDAO, Equilibria and other veToken governance power competition projects, as well as tools like automatic reinvestment and LST aggregation. This level still has considerable growth potential.

Overall:

1. The technical barriers of L0 are high, but attention should be paid to the actual utility of the tokens.

2. The leading position of L1 has been established, and it is difficult for new entrants to break into the top 3, but there are still opportunities for new talents to emerge.

3. L2 lacks a moat, testing the team's capabilities. The more basic DeFi strategies there are, the more prosperous L2 will be.

4. L3 development is limited by L2, but the potential is vast and requires time to develop.

In terms of the pledge rate, it has steadily risen after the upgrade in Shanghai and has currently exceeded 16%. Considering factors such as the decentralization level, practicality, and external scalability of ETH, it is expected to stabilize around 25%.

In terms of centralized vs decentralized staking, decentralized platforms account for less than 40%, CEX about 20%, with the remainder being node staking and Solo Staking. The top 3 decentralized platforms will still maintain their advantages, but diversification is an inevitable trend.

In terms of yield, the nesting doll strategy can increase returns to over 10%. Quality projects should have real returns, application scenarios, and good token economics.

The development of LSD on Layer 2 is rapid, with Arbitrum performing the best. The low fees and fast transactions on L2 are expected to attract more users.

Overall, while the LSD ecosystem is difficult to replicate the DeFi Summer, there is still considerable room for growth. With the arrival of the Cancun upgrade and the bull market cycle, it may usher in a new round of growth. Investors should pay attention to risk control and choose products with higher security to build their strategies.