How To Maximize the Earnings of Your LSTs and LRTs on Poolside

DeFi has a new king trend.

So far, 2024 has already been the year of liquid restaking, marked by the explosion in adoption and interest in liquid restaking tokens (LRTs) and their underlying collateral, like liquid staking tokens (LSTs).

This transformative trend is already reshaping the DeFi landscape and setting the stage for an unprecedented increase in capital efficiency and security accessibility. Now, as a liquidity provider (LP), you may be wondering how to maximize this new source of returns for your liquid staking tokens.

The answer is through Poolside, a platform we crafted to harness the full potential of LSTs, LRTs, and other value-accruing assets within DeFi. 

We did so to ensure Poolside LPs reap unparalleled rewards compared to other DEXs by offering additional yields on LSTs and LRTs. Below, you’ll learn why LSTs and LRTs are the new hot commodity in DeFi and how Poolside is positioned to help you best stack rewards in this new capital-efficient era.

The Rise and Rise of Liquid Staking and Restaking

Imagine a world where your assets work harder, smarter, and in more places at once. That's the promise of LSTs and LRTs. By enabling assets to secure multiple networks simultaneously, these tokens redefine what it means to be "liquid" in the DeFi space.

So far, liquid staking has grown to over $33 billion total value locked (TVL), absolutely dwarfing every other sector within DeFi:

Liquid staking tokens facilitate participation in network security without the constraints of traditional staking mechanisms, allowing assets to remain liquid and engaged in the ecosystem. The introduction of restaking via EigenLayer further amplifies this efficiency, enabling assets to secure multiple networks simultaneously and offering stakers additional rewards for their expanded role.

Liquid staking presents several key benefits to DeFi, including:

• Capital Efficiency: By unlocking the liquidity of staked assets, LSTs and LRTs allow users to leverage their holdings across various DeFi protocols without relinquishing participation in network security.

• Enhanced Security: Liquid staking and restaking distribute security responsibilities across a broader base of participants, thereby strengthening the overall resilience of blockchain networks.

• Accessibility: These mechanisms lower the barrier to entry for staking, enabling smaller holders to contribute to network security and reap rewards previously accessible only to larger stakeholders.

• Innovative Reward Structures: Integrating LSTs and LRTs into DeFi protocols introduces complex reward systems, providing stakers with multiple income streams from a single asset (enter Poolside).

How Poolside Maximizes the Earning Potential for LSTs and LRTs

Most DEXs are playing catch up with the major boom of value-accruing assets like LSTs and LRTs. Not Poolside. Poolside was built from the ground up to accommodate the nuances of liquid staking reward accumulation. This means that Poolside is THE DEX for accumulating the most liquid staking rewards and earning even additional yield on top of normal rewards by stacking Party Points.

But how, you ask?

Poolside's unique AMM is designed with an acute understanding of the dynamics of liquid staking tokens (LSTs) and yield-bearing assets. Unlike traditional AMMs, Poolside's infrastructure is adept at recognizing the accrual of staking rewards, ensuring that the value added through these rewards is not lost to arbitrage. This is a significant advancement over other platforms, where liquidity providers (LPs) often face the erosion of staking rewards due to the design of the tokens or the AMMs themselves.

Most LPs holding liquid staking assets earn staking rewards minus what is lost to arbitrage on platforms like Maverick. On Poolside, LP rewards accumulate in dormant pools (called reservoirs), meaning they earn full payout on their deposits (plus their Party Points).

Thus, for LPs looking to maximize the output of their LSTs and LRTs, Poolside has already established pools and incentives for LSTs such as Lido's stETH and BENQI's sAVAX, among others.

To learn more about Poolside’s infrastructure, refer to our Docs.

Liquid Staking is Brighter When You’re Poolside

With liquid staking assets becoming the largest sector of DeFi, it is clear that LSTs and LRTs are larger than just a trend; they have already become the new building blocks of a more capital-efficient, secure DeFi ecosystem. We created Poolside to ensure a DEX exists that puts liquid staking LPs first and ensures depositors have a platform they can trust to maximize their reward accumulations.

Learn more about how to earn additional yields on your LSTs and LRTs today! Join us at Poolside.party.