Encryption researcher arndxt analyzed the current landscape of LSDfi and believes that the LSD stablecoin will promote the narrative of LSDfi. He introduced an protocol called Lucid Finance that can facilitate this growth, including its core design principles, token economics, roadmap, and more.
Lucid Finance is a lending protocol focused on LSD, designed around the LSD stablecoin $DUSD. It features over-collateralization, Rebase yield, interest-free lending, and protocol emissions for holders. Users can borrow/mint $DUSD by collateralizing with blue-chip LST ($stETH, $rETH, $frxETH, $cbETH, $BETH) or ETH-based LP tokens on Curve, Balancer, and Yearn Finance.
Users can earn rewards through 3 actions: 1) minting DUSD for $esLUCID protocol emissions, a daily rebate from all deposited collateral’s generated yield, and liquidity incentive mining; 2) depositing collateral for $esLUCID protocol emissions, most of the staking yield from base LST and LPT collateral, and protocol upgrades; 3) governance. On Lucid, depositors can take most of the generated yield. Part of the generated yield from all deposited collateral is allocated as daily rebates to $DUSD holders. Holding $DUSD in your wallet or depositing it into supported LP tokens will increase your $DUSD balance daily.
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Two things on Lucid’s roadmap excite me: 1) Leverage strategies – this means that base collateral can earn higher yield through automated compounding. Simplifying the entire process into one click would be a great help in bringing more TVL onto the platform. 2) Going cross-chain – Lucid’s plan is to extend the chain to mainstream L2s such as Arbitrum, Optimism, and Polygon, which is a good start, though it may change depending on market conditions.【Original text in Chinese】