Re-staking startup YieldNest is tapping into the rapidly growing liquid staking derivatives market with a new token. Called ynLSDe, the system is designed to allow anyone who stakes ether on leading decentralized liquid staking platforms, including Lido, FRAX, Origin Protocol, and Mantle, to earn additional yields.
Liquid Staking DeFi (LSD) is a tokenized representation of staked assets that can be used across a variety of DeFi protocols. Ethereum
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Staking — the process of rewarding users for contributing to the security of the Ethereum network — is non-transactionable. LSD circumvents this by creating a proxy token that can be used elsewhere while the underlying ETH is staked.
Restaking takes this process one step further by allowing users to take their LSD tokens and redistribute them to secure additional decentralized services. Likewise, ynLSDe is building on this restaking trend. Pioneered by giants like EigenLayer, restaking has grown to a $50.5 billion market, according to DeFiLlama data.
Re-staking proponents argue that the system helps improve the security of smaller blockchain apps that cannot raise the capital and community support needed to operate a proof-of-stake security system.
“Users earn ynLSDe by staking stETH (Lido), sfrxETH (FRAX), or mETH (Mantle) or OETH (Origin Protocol) into YieldNest’s restaking pool. ynLSDe is a tradable and liquid ‘receipt’ token that represents the underlying yield-generating restaking token. The restaking rewards generated are distributed back to ynLSDe holders,” the team wrote in a statement.
YieldNest aggregates potential yields from re-staking platforms, including EigenLayer Points, YieldNest Seeds, and other “actively verified services” (a general term for dapps secured by re-staking protocols). The platform offers a curated basket of different yield-generating strategies tailored to different risk tolerances.
YieldNest previously launched the ynETH token, which is a native re-staking token that leverages trading strategies managed by the YieldNest risk management team.
Built on EigenLayer, the platform is backed by Faculty Capital, Backed VC, Proof Capital, and others. Angel investors include Curve founder Michael Egerov, Kyber founder Loi Luu, and FRAX founder Sam Kazemian.
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