Welcome to the World of LSTs
Liquid Staking Tokens
Exploring the Dynamic Capabilities of Liquid Staking Tokens (LSTs).
Whether you're an occasional crypto investor or a dedicated DeFi enthusiast, you've probably caught wind of the excitement surrounding one of the most exhilarating new asset classes to emerge last year: Liquid Staking Tokens (LSTs). LSTs offer a representation of the value of a user's staked TONCOIN, opening up fresh avenues for liquidity and the potential for enhanced yields.
Understanding LST's
LSTs function as tokens representing a user's staked TONCOINs, thereby introducing fresh liquidity and creating enhanced yield possibilities. They serve as verifiable proof of staked TONCOINs held within TON staking pools. This addresses the ongoing dilemma of having to make a choice between staking TONCOINs to earn rewards and preserving their liquidity for other activities that yield profits.
As LSTs are fully tradable, individuals can stake their TONCOINs to generate passive income while concurrently utilizing their LSTs across various DeFi applications that generate revenue. This has provided a resolution to the liquidity challenge associated with staked TONCOINs, ushering in a new era of high-yield investment opportunities for one of the most reliable assets in the cryptocurrency realm.
The Present State of the LST Market
As of January 8, 2024, the Liquid Staking Tokens (LST) market within the TON ecosystem, with the TON price at $2.19, is defined by the following key players and their Total Value Locked (TVL) in dollars:
Tonstakers (tsTON): Commanding a 54.43% market share, Tonstakers' tsTON has 14,773,121 staked TON, equating to a TVL of approximately $32.36 million.
Bemo Finance (stTON): With a 36.99% market share, Bemo Finance's stTON comprises 10,039,833 staked TON, leading to a TVL of around $22 million.
Hipo Finance (hTON): Contributing 4.43%% to the market, Hipo Finance's hTON has 1,201,549 TON staked, resulting in a TVL of approximately $2.6 million.
Ton Whales (wsTON): Accounting for 10.01% of the market, Ton Whales' wsTON includes 1,125,814 staked TON, corresponding to a TVL of about $2.5 million.
*All data referenced in this document is sourced from their respective platforms and Tonstat as of January 8, 2024.
This overview provides a clear picture of the TON LST market, highlighting the dominant players and their relative market shares, along with their TVL in dollars.
Classifying LSTs into Categories
LSTs can be categorized into two main groups:
Rebase LSTs: Rebase LSTs provide holders with an increasing number of LST tokens as they accumulate staking rewards over time.
Non-Rebase (Value-Accruing) LSTs: Non-Rebase (Value-Accruing) LSTs, on the other hand, appreciate in value as staking rewards accumulate, eliminating the necessity for additional LST transfers.
It's worth noting that, as of now, all LSTs on TON are of the Non-Rebase variety.
The Unexplored Opportunities within the LST Market
LSTs offer an enticing opportunity for DeFi investors, delivering passive income from staked TONCOINs while also enabling additional yield-generating activities through LSTs. Nevertheless, one might question whether the LST market has truly reached its full potential. Current data suggests otherwise.
Currently, only 8.31% of TONCOIN is staked, leaving an astonishing $10 billion worth of TONCOIN unused. To put this in perspective, more than 70% of Solana is staked. This indicates that, despite the ongoing enthusiasm, there remains substantial untapped potential in the LST market.
To enhance the Total Value Locked (TVL) of staked TONCOINs, it is essential to enhance the utility of LSTs. While the liquidity potential of LSTs is theoretically immense, the existing opportunities for yield generation are currently quite limited.
This is where Aqua Protocol steps in.
Last updated