Continuous innovation and rapid adaptation are the lifelines for the continuous development of DeFi products. Hope.money has always been committed to improving our products and bringing more value to the community.
Recently, we have been exploring the possibility of integrating Liquidity Staking Derivatives (LSD) into our ecosystem. Before going into detail, let's take some time to understand what LSD is and why it has become a hot topic.
LSD - The New Frontier of DeFi
With Ethereum transitioning to a Proof of Stake (PoS) model, Liquidity Staking Derivatives (LSD) have played an increasingly important role in the DeFi space. Users can stake assets on PoS blockchains to earn stable, low-risk passive income and receive Liquidity Staking Tokens (LST) corresponding to their staked assets. These tokens can be used in a wider range of DeFi ecosystems, providing liquidity to various protocols and generating profits.
Ethereum's Shanghai upgrade has sparked interest in Liquidity Staking Derivatives (LSD) within the community. Who would refuse to earn more ETH while still benefiting from Ethereum liquidity? As of July 27, 2023, the Total Value Locked (TVL) of ETH LSD reached 10.58 million ETH (approximately $19 billion), a growth of 130% compared to the previous year and an increase of over 1220% compared to two years ago. Among all ETH LSD, Lido's stETH holds the largest share, accounting for 74% of the TVL, followed closely by Coinbase's cbETH and Rocket Pool's rETH.
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Aside from ETH LSD, holders of SOL, DOT, and other major PoS blockchain tokens are also leveraging staking platforms to generate passive income through staking native tokens.
Stablecoins and LSD - a powerful combination
Among all DeFi applications, stablecoins face the "impossible triangle" or "stablecoin trilemma," which is the challenge of simultaneously achieving stability, capital efficiency, and decentralization.
In the early stages, $HOPE pursues higher capital utilization (initial reserve price starting from 0.5 USD, providing potential appreciation for holders), making compromises on stability ($HOPE reserve price fluctuates with BTC and ETH prices), and decentralization ($HOPE adopts a three-layer distributed design instead of complete decentralization to ensure system stability and maintain attractiveness to traditional investors).
As the market and $HOPE ecosystem grow, $HOPE will have better stability (the reserve price of $HOPE will eventually stabilize at around 1 USD as the reserve asset price rises) and decentralization (veLT holders will participate in DAO governance together).
At this stage, our top priority is to optimize capital efficiency and bring more returns to holders. Therefore, integrating ETH LSD into $HOPE seems like a natural development direction. We are currently experimenting with several partners to try to incorporate ETH LSD into the $HOPE reserve pool. This move will enhance the value of $HOPE and the entire ecosystem, providing users with more opportunities for returns and higher capital efficiency.
Of course, we are fully aware of the potential challenges and risks in this experiment. Therefore, we will conduct comprehensive research and rigorous testing, and will actively involve the community in relevant decision-making. The final decision regarding this direction will be determined by you - the members of the delicious community through the HOPE ecosystem governance voting.
Stay tuned for more updates on the experiment, and we encourage everyone to join the community and participate in more discussions, providing your valuable insights for the continuous development of the HOPE ecosystem.
About HOPE
Official website: https://hope.money/
Twitter: https://twitter.com/hope_money_
Discord: https://discord.com/invite/hopemoneyofficial
Telegram: https://t.me/hopemoneyofficial
Medium: https://hope-money.medium.com/
