Decentralized finance protocol YieldNest announced the launch of a new liquid staking derivative called ynLSDe, designed to capture restaking yield from EigenLayer.
What is ynLSDe
The new tokenized derivative, ynLSDe, will allow holders of Ether staked through Lido, FRAX, Origin Protocol, or Mantle to earn additional yield from restaking. These platforms issue their own staking derivatives.
How Restaking Works
Restaking involves taking Ether already staked with validators and using it to secure other protocols, enhancing rewards in exchange for additional risk. EigenLayer, launched in 2023, has accumulated approximately $12 billion in total value locked (TVL). Liquid restaking protocols such as Ether.fi and Puffer Finance hold another roughly $11 billion in TVL.
Advantages and Risks of Liquid Restaking
Receipt tokens like ynLSDe allow users to restake their assets while retaining liquidity, meaning they can still use their staked assets in other DeFi activities. However, such tools can also amplify risks. YieldNest aggregates all potential yield sources for users, including EigenLayer Points, YieldNest Seeds, and other AVS airdrops.
YieldNest's new product aims to provide users with additional restaking yield from EigenLayer, aggregating all potential yield sources while maintaining liquidity.
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