🌎Mission and Vision

Liquidity Solutions

With the transition from PoW to PoS in Ethereum 2.0, staking under PoS protocols typically involves locking tokens into a project for the long term, creating validator nodes with a fixed amount of tokens, and earning predetermined staking rewards through node management. This process ensures token-based returns (denominated in the staked asset) similar to bond-like guarantees in traditional finance. However, locking funds in nodes restricts their ability to pursue higher returns from other DeFi ecosystems.

From an economic perspective, users must carefully analyze the “opportunity cost” of asset allocation to optimize returns, a process that is often complex and tedious. For instance, staking all cryptocurrencies means users cannot sell assets during a price increase, thereby limiting liquidity and reducing the ability to maximize returns.

While solutions from projects like Lido, StakeStone, and EigenLayer address some user needs for network participation, they fall short in addressing liquidity challenges for node operators. To innovate beyond these limitations, LSP introduces a groundbreaking solution.

LSP’s Liquidity Solution

LSP allows existing nodes to map LSTs after establishing validator nodes, enabling node operators to gain liquidity without losing node control. Operators can sell a portion of LSTs for liquidity while retaining a share of node rewards. This approach maintains staking rewards and increases liquidity for engaging in other opportunities within DeFi ecosystems.

Key Advantages of LSP’s Protocol

1. Enhanced Liquidity for Node Operators:

• Operators can unlock funds without sacrificing node control or rewards.

2. Interoperability:

• Facilitates node-to-LST conversion, independent of the asset’s liquidity in external markets.

3. Lower Barriers for Users:

• Reduces the complexity of staking for individual users.

• Allows participation with smaller amounts (e.g., bypassing Ethereum’s 32 ETH minimum for staking).

4. Early Access to Alpha Projects:

• Users can capture pre-launch benefits of promising projects unavailable in other markets.

5. Diverse Solutions:

• Offers a marketplace for LSTs, single-token staking, liquid staking, and other decentralized and semi-custodial protocols, covering multiple ecosystems.

Differentiation from Existing DeFi Products

Solo Staking:

• Requires technical expertise and a minimum capital threshold (e.g., 32 ETH for Ethereum validator nodes).

• Mismanagement risks locked funds, slashing, or penalties, leading to severe capital losses.

SaaS Staking:

• Similar to solo staking but involves a third-party operator (often centralized).

• Users must trust the third party, exposing funds to potential attacks, misuse, or regulatory risks.

• Capital requirements remain high.

Centralized Exchange Staking (CeFi):

• Funds are stored centrally, lacking transparency on how they are used.

• Users risk losing liquidity and rewards and face potential security threats from concentrated funds.

Challenges for Node Validators

• Locked assets limit financial flexibility, reducing opportunities to capture alternative returns.

• DeFi products offering LSTs address some liquidity issues but expose users to risks like assetsu3g depreciation during volatile markets.

• Centralization risks arise when a small number of validators control a majority of staked tokens.

LSP’s Comprehensive Solution

LSP eliminates liquidity challenges for both users and validators by enhancing PoS liquidity:

1. Increased Token Circulation:

• Provides more liquidity to staked tokens without compromising rewards.

2. Maximized Returns:

• Users and validators benefit from improved liquidity to pursue additional investment opportunities.

3. Ecosystem Growth:

• Drives blockchain ecosystem prosperity by balancing rewards and liquidity across all participants.

Trustless by Design

Trust is the foundation of blockchain networks. LSP ensures trustlessness through open-source code and rigorous auditing, enabling validator nodes to operate seamlessly while mapping LSTs.

LSP’s Vision

DeFi is an integral part of the Web3 ecosystem. LSP aims to continuously iterate its products and collaborate with other ecosystems to drive the prosperity of the Web3 world.

Stay tuned to official updates for the latest developments!