LRT track growth slows down, is the points system the "original sin"?
The crypto market has always emphasized capital efficiency, and in such an environment, liquidity never sleeps. We can consider that the rise of the LRT track stems from the market's extreme pursuit of liquidity efficiency, through continuous nesting, from ETH native staking to LSD to the ongoing spiral wrapping of LRT.
From the user's perspective, the logic of LRT lies in capturing more returns by layering multiple sets, essentially a "one fish, multiple eats" approach. Looking at the overall model of the early LRT market, LRT returns consist of three parts: ETH Staking returns (LSD, which has a relatively low yield), Eigenlayer points airdrop returns, and LRT project points airdrop returns. In addition, users can further stake the LRT tokens they receive into some pre-market trading platforms to obtain additional multiple point rewards.
Although this method was effective in the early stages and staking users were quite receptive, as Eigenlayer and some LRT projects like Puffer completed their early-stage airdrops, many users found that the expected returns from the points earned were not promising.
Firstly, most users had a low proportion of staked shares, resulting in poor overall capital efficiency in terms of returns.
Secondly, the airdropped tokens lacked strong business logic support, and in the short term, there was no visible real value, leading to significant market selling pressure and continuously lowering market expectations. Thus, we see users losing patience with the re-staking market, and the perceived value of points in users' minds is being continuously diminished, even to the point where they consider them equivalent to air.
From the data, the total supply of LRT assets has shown signs of growth fatigue and even negative growth since June of this year, especially after some airdrops.
Apart from the Ethereum re-staking ecosystem, the staking system based on Bitcoin (BTC), such as Babylon, is also under market scrutiny.
Ordinary users cannot directly participate in Babylon and must go through a third-party BTC LRT protocol to become participants as ordinary BTC holders. This essentially returns to the logic of the Ethereum re-staking ecosystem, which is about competing for points and future token expectations.
Many people express doubts about Babylon's future profitability. Not only are more facilities involved in PoS security services, but there are also questions about whether there are enough PoS chains that need validation support. This means that the returns ultimately fed back to users by Babylon, as well as whether the re-staking facilities based on it can provide satisfactory return expectations, are also in doubt.
How can the LRT market experience a second spring?
In fact, this question is not complicated. The growth of the LRT market requires users to continuously participate in staking, and participating users merely hope to earn some tangible returns, rather than receiving one empty check after another.
The emerging re-staking protocol Astherus seems to have grasped the essence of the problem. It attempts to break the system primarily incentivized by points and establish a new system focused on real returns to find the optimal solution for revitalizing the LRT market.
What does "real returns" mean in Astherus?
Astherus is an innovative multi-chain LRT protocol that differs from other re-staking models centered on providing point incentives. It tends to endow LST assets with utility through DeFi.
The Astherus protocol itself is divided into two different parts: AstherusEx and AstherusEarn. The former is a DEX that supports LST assets to profit through various methods such as farming and derivatives. The latter is an automatic strategy income pool based on CeFi + DeFi (CeDeFi) with institutional-level security, providing LST holders with a safe and high-profit pipeline.
AstherusEx
AstherusEx is a DEX that provides trading support for LST assets, allowing LST asset holders to achieve considerable returns from the market through different strategies. This section is suitable for some mature traders who have profitability in the trading market.
In AstherusEx, users can choose to deposit and stake supported LST assets. Users participating in the re-staking of LST assets can earn a series of multiple incentives, including AU points (the incentive points of the Astherus protocol). Among these, AU points can not only be exchanged for the native token $ASS during the Astherus ecosystem TGE but are also expected to play an important role in enhancing yields in other product sections.
Once users complete the re-staking, these staked LST assets can serve as collateral for perpetual trading, allowing users to participate in derivatives trading of major cryptocurrencies like BTC and ETH without having to liquidate their staked positions, thus maintaining their staking returns.
Users can even use these staked LST assets for direct derivatives trading, such as ETH interest rate contracts, to hedge risks.
Moreover, users will receive additional AU point incentives for engaging in derivatives trading.
Thus, in the AstherusEx section alone, LST assets have multiple utilities. They are not only important assets for users to earn multiple point rewards through various means, but these LST assets can also retain trading utility in the derivatives section even when staked. Traders can capture maximized trading returns through established derivatives strategies, significantly enhancing the utilization and returns of LST assets.
Therefore, the LRT ecosystem built on the derivatives system inherently provides a foundation for delivering real returns to users, serving as the first source of real returns.
AstherusEarn
AstherusEarn is an active strategy income pool where users only need to stake mainstream assets into the pool to earn income.
When users stake assets into AstherusEarn, it will return an asToken to the user. For example, if BTC assets are staked into AstherusEarn, the user will receive a corresponding LST asset asBTC.
This asset can be used in AstherusEx, such as for staking or engaging in derivatives trading. Typically, asTokens participating in the deposit staking in AstherusEx receive higher point reward multiples. For instance, the AU point multiple for asBTC assets staked in AstherusEx can reach as high as 5 times. asTokens can also be traded in the secondary market, allowing users to buy or sell in the secondary market or become LPs to further earn farming rewards.
At the same time, the assets staked in AstherusEarn will also generate income based on automated strategies.
AstherusEarn itself is an AI-driven automated strategy income pool that can utilize and execute the best CeDeFi strategies, creating secure and high-profit channels to ensure users maximize their returns by participating in the most profitable opportunities based on real-time market conditions.
Additionally, AstherusEarn has established asset custody cooperation with Binance's asset custodian Ceffu, ensuring security while promoting the issuance of stablecoins backed by real-world assets (RWA) such as real estate and government bonds, further bridging the gap between CeFi and DeFi and enhancing the stability and utility of digital assets within the Astherus ecosystem.
Based on this, when users stake assets in AstherusEarn, they will further generate an APR of 2-6%, which will be reflected in the net asset value of asTokens. Users will also receive AU point incentives. Therefore, asTokens are more like intention assets, allowing users to mint asTokens with one click and directly realize intended returns.
Thus, compared to current mainstream DeFi protocols or re-staking paradigms, the returns and capital utilization that AstherusEarn can provide are superior.
With mature income strategies, seeking outward through a combination of DeFi and CeFi is becoming the second source or income growth point for Astherus to capture real returns for users.
Astherus may become a new growth point for the LRT track
The overall growth of the LRT market is weak, rooted in the fact that simple pre-market point rewards can no longer impress holders and traders. Points essentially represent future redemption tickets, and there is a deeper binding of incentives with future expectations. Using points as the primary incentive method is certainly not sustainable.
Therefore, in a new market phase where users have been overly manipulated by point schemes, and the overall growth of the DeFi market is weak, users are more eager for tangible, visible real returns. Thus, the key to driving a new round of growth in the LRT track lies in whether users can obtain visible and tangible direct returns at present.
Astherus is a clever problem solver, and both product sections represent good problem-solving ideas.
Derivatives are a two-way market, where there is arbitrage space regardless of market fluctuations. By deeply binding LST assets, the LRT section, and the derivatives market, traders can continuously find new profit points. Astherus has combined the on-chain derivatives section with the LRT track for the first time, allowing users from two relatively mature sections to siphon off and continuously find new growth points through mutual empowerment.
AstherusEarn appears to be more direct, with an AI-based strategy pool ensuring that the protocol clearly obtains income from external markets, even from the Web2 market. Therefore, for staking users, rather than engaging in internal competition in the re-staking market for unclear returns that may ultimately be zero, it is better to reach direct, clear, and real returns through AstherusEarn. Users can achieve their intended returns with one click in this process without the need for constant interaction with multiple protocols.
In Astherus, points play a more auxiliary role, focusing on current real return expectations while supporting future return expectations. Therefore, Astherus's new attempt in the LRT market is expected to awaken the second spring of the LRT track.
It is worth mentioning that the market currently supports the narrative of Astherus. This project is not only part of Binance's incubator program but has also recently achieved a historical high TVL of $88 million. With the launch of the AstherusEarn product, Astherus is also expected to stand out in the LRT market and the DeFi market.