LSD and AI are big and dominant narratives in the space. Somehow AI narrative overcome the borders of web3 and despite speculations of some people that say this trend will be forgotten fast. As we are in the early stages, I believe we will see many surprises on the market. When it comes to LSD, I haven’t been aware earlier of the possibilities it provides to DeFi.
Ethereum upgrade last September has definitely made an impact and brought bigger interest in LSD, but it is questionable how will upcoming Shanghai upgrade affect the liquid staking tokens, and the market generally. Once staked ETH is unlocked we will maybe see a big sell pressure or it will encourage more staking. Whatever, we can only observe and stick to the strategies that we have been doing. For me, those are DCA and staking. Personally, I would love to see the popularity of staking, and one of the reasons is that there were so many negative events, so staking would bring more trust and would break negative sentiments among investors.
Many platforms already adopt LSD, probably because of the advantages they bring to stakers which allow them to participate in DeFi further.
Some of the advantages concern lower staking barriers, more stability, decentralization, etc. On the other hand, there are risks such as low liquidity, and low trading volume which leads to manipulation. Probably, oracles would solve many of the problems by improving the capability of protocols to integrate LSDs, through DIA xLSD and providing transparency on the collateralization ratio of different LSD.
For now among LSD leaders are LIDO, Rocket Pool, Benqui, etc. Despite the fact there is a big focus on Ethereum LSDs, other PoS chains, aim to have a significant liquid staking market (Avalanche and BNB Chain). There is a lot of room for growth, so I believe there we will see many more changes.
submitted by /u/stormingaround10