Description
Restaking Token Finance (LRTfi)? is an emerging term in the DeFi sector, promising a new approach to staking and earning profits from digital assets. It’s a diverse ecosystem of projects created to support and develop protocols based on LRT.
So, what is LRTfi and why has it emerged? Follow this article of AZcoin to better understand LRTfi and its role in DeFi.
What is Liquid Restaking Token Finance (LRTfi)?
Liquid Restaking Token Finance (LRTfi) is an ecosystem comprising projects that support and develop protocols based on Liquid Restaking Token (LRT). This represents a new advancement in the decentralized finance (DeFi) sector, considered as the next step following the emergence of LSDfi, a part of the revolution in integrating Restaking into the DeFi ecosystem.
Components of the LRTfi ecosystem
The LRTfi ecosystem comprises the following key components:
Liquid Restaking Token (LRT)
LRT is a token created during the Liquid Restaking process, representing the user's stake in that staking. LRT can be traded on exchanges, allowing users to profit from their staking rewards more flexibly.
Liquid Restaking Protocol (LRP)
LRP is a protocol that enables users to perform Liquid Restaking. It provides a simple method for users to stake their assets without being locked in for a specific period.
Liquid Native Restaking Protocol (LNP)
LNP is an upgraded version of LRP, allowing users to stake their assets directly on a specific platform's blockchain rather than through third parties. This helps minimize risks and costs for users.
Why was LRTfi born?
LRTfi was created to address the limitations of traditional staking. These limitations include:
Long-term asset lockup
In traditional staking, users must commit to locking up their assets for a certain period to receive rewards. This makes their assets unavailable for other uses during this time and can reduce financial management flexibility.
Security risks
In some cases, exchanges or staking platforms may be hacked, leading to the loss of users' assets. Using LRTfi helps mitigate this risk because users' assets do not need to be sent to exchanges or platforms and can be staked directly on a specific platform's blockchain.
High costs
Participating in traditional staking can require users to pay various fees, such as transaction fees and insurance fees. With LRTfi, these costs can be minimized as users can stake directly on a specific platform's blockchain.
See more:
🤙 https://www.sutori.com/en/story/untitled--4wi2NiwXsnWtZyppECzFGaWF
🤙 https://beforeitsnews.com/v3/contributor/bio/?uid=957086
Operation Mechanism of LRTfi
LRTfi is a diverse ecosystem of projects that support protocols based on Liquid Restaking Token (LRT). These projects together form a robust ecosystem with the goal of helping and developing each other.
Projects within the LRTfi ecosystem engage in various activities such as:
🌳 Building and developing protocols based on LRT.
🌳 Providing tools and platforms for users to easily participate in staking and trading LRT.
🌳 Enhancing security and safety for users.
🌳 Researching and developing new features to optimize staking and trading activities for LRT.
🌳 Promoting and introducing LRTfi to the community and attracting more users.
These activities are carried out by members of the LRTfi ecosystem according to a specific plan and strategy to achieve the common goal of creating a strong and sustainable DeFi ecosystem.
TOP 5 prominent projects in the LRTfi sector
Here are five prominent projects in the LRTfi sector as of July 2024:
Frax Finance (frxETH)
Frax Finance is a pioneering decentralized currency protocol that uses an algorithmic stability model instead of over-collateralization. frxETH, Frax's liquid staking token, provides users with easy access to loans, farming, and profit accumulation.
StaFi
StaFi is the leading liquid staking protocol on Substrate, allowing users to lock their staking assets in exchange for liquid tokens that can be used in various DeFi applications. StaFi offers multiple liquid staking tokens for assets such as ETH, DOT and ATOM.
Anyswap
Anyswap is a decentralized exchange protocol that enables users to seamlessly swap assets between blockchains. Anyswap provides liquid staking tokens for several popular blockchain assets, including WBTC, WETH and USDC.
Lido (stETH)
Lido is a popular decentralized staking protocol on Ethereum that allows users to stake ETH without running their own staking node. stETH, Lido's liquid staking token, can be used in many DeFi applications and accumulates significant profits.
Rocket Pool (rETH)
Rocket Pool is a prominent decentralized staking protocol on Ethereum, notable for its low minimum capital requirement of just 0.01 ETH to participate in staking. rETH, Rocket Pool's liquid staking token, similar to stETH, offers attractive profit opportunities for users.
Besides, you can supplement your DEFi knowledge by reading the following articles:
🌈 What is ERC20? Applications of the ERC20 Token Standard
🌈 What is Layer 2? Why should Bitcoin need Layer 2?
Conclusion
Hopefully the above article has helped you better understand Liquid Restaking Token Finance (LRTfi) and why it was born in the DeFi space today.