LSDx Finance, a Super Liquidity Protocol, Receives $2 Million Strategic Investment from Foresight Ventures

06/03/2023·1years ago

About LSDx Financing

On March 17, 2023, LSDx officially announced that it has received a $2 million strategic investment from the well-known investment firm Foresight Ventures. This investment is equivalent to 40 million LSD tokens, with a valuation of $50 million, demonstrating the project's potential and Foresight Ventures' confidence in the team. To ensure transparency, LSDx has designed a unlocking mechanism for Foresight Ventures' strategic investment, with 25% of the tokens being immediately unlocked, and the remaining 75% being linearly unlocked over 9 months starting from now. Foresight Ventures' unlocking mechanism ensures fair distribution of tokens and provides long-term value for investors.

Project Introduction

LSDx is a super liquidity protocol for all LSD assets. It aims to optimize the financial value of liquidity collateralized derivative (LSD) assets, addressing their limited liquidity and lack of connectivity with various DeFi protocols, hindering their integration with various DeFi protocols. With the adoption of proof of stake (PoS) as a consensus mechanism expanding in Ethereum and other layer1 networks, the demand for LSD assets is also increasing.

However, the current liquidity of LSD assets is relatively scarce, limiting their broader financial application potential. LSDx seeks to establish a protocol specifically for LSD assets, enabling them to unleash greater liquidity and broader financial scenarios, while providing higher underlying returns. By enhancing the value proposition of LSD assets, LSDx is committed to promoting the success of LSD projects and enhancing their visibility in the crypto ecosystem.

At the same time, the Ethereum ecosystem has always faced challenges with risky assets, including concerns about third-party risks and inefficient swap mechanisms. LSDx aims to address these limitations by providing a super liquidity protocol for all LSD assets, allowing users to fully benefit from the opportunities provided by collateralized assets.

LSDx is an emerging liquidity protocol specifically for LSD assets. We can gain a more specific understanding of the LSDx protocol through the roadmap announced in the white paper for the first half of 2023:

March 16, 2023 - Genesis Mining launch, the team will have the necessary infrastructure to support mining operations and will begin building the protocol's cryptocurrency reserves.
March 23, 2023 - Genesis Mining first halving, which means the rewards for mining blocks will also be halved. This is a significant event for the protocol's native token, as it will affect the token's long-term value and scarcity.
March 31, 2023 - ETHx product launch: ETHx is a cryptocurrency investment tool that will allow investors to gain exposure to Ethereum without managing their own wallets. LSDx will market this product to institutional investors and high-net-worth individuals. (Due to some experience-related issues discovered after deployment, the launch has been postponed to 04/06 Thursday, and the countdown is also synchronized on the official website.)

April 30, 2023 - ETHx first yield adjustment: Adjust the yield of the ETHx product to reflect market conditions. Monitor the performance of the product closely and make adjustments as necessary to ensure that investors can achieve the best returns.
June 30, 2023 - UM product launch: UM is a stablecoin that provides price stability and reduces volatility in the cryptocurrency market. Its collateral mechanism and excess ETHx collateral ensure its value and stability. Potential use cases for UM include payments, loans, liquidity provision, and structured products. As UM continues to develop and be adopted, it may become a significant participant in the stablecoin market.

LSDx Finance Star Products

Farm - The current LSDx farm has a total of five types of asset pools, where users can deposit ETH, stETH, frxETH, rETH, and LSD/ETH UNI-V2-LP to earn the platform token $LSD. - The farm started a 14-day Genesis Mining activity on the morning of March 16th at 9 am (UTC) to reward early supporters of LSDx. There are still attractive reward activities in Days 15-21 after the farm goes live: a daily production of 500,000 $LSD.
ETH pool: 75,000 $LSD /day
stETH pool: 262,500 $LSD /day
frxETH pool: 25,000 $LSD /day
rETH pool: 12,500 $LSD /day
LSD/ETH UNI-V2-LP pool: 125,000 $LSD /day - After the launch of ETHx (04/06), two new asset pools will be added, each with a daily production of 500,000 $LSD.
ETHx pool: 300,000 $LSD /day
LSD/ETH UNI-V2-LP pool: 200,000 $LSD /day

ETHx (Launch on 04/06)

Introduction: ETHx is a basket of various Ethereum-based LSD assets, with built-in rapid exchange of native LSD. ETHx allows users to mint coins using ETH, stETH, fraxETH, or rETH, providing flexibility and convenience for users. Its purpose is to achieve the best ratio of liquidity, security, interest, and DAO participation.
Competitiveness: ETHx is designed for direct exchange without the need to go through ETH. This means that when users exchange their assets on LSDx, they can do so at a lower slippage rate compared to Curve and Uniswap. This is because ETHx is a basket of ETH LSD tokens, providing a better composition token ratio, resulting in better liquidity and lower slippage rates. Ultimately, ETHx and LSDx provide users with an efficient and economical way to exchange assets without compromising security and efficiency.
Providing Liquidity - Mint ETHx: Users can provide liquidity to the platform by depositing any of the four assets (ETH/stETH/frxETH/rETH) into the ETHx pool contract. At the same time, a corresponding amount of ETHx tokens will be minted. The amount of ETHx minted is directly proportional to the amount of assets deposited and the current ratio of the three assets in the ETHx pool. Providing assets in the pool that are in short supply will be considered as contributing to supplementing the scarce liquidity of ETHx, thereby earning more ETHx rewards.
ETHx Exchange and Redemption: If users want to redeem ETHx, they can choose to redeem ETH/stETH/frxETH/rETH assets in proportion, or redeem any single-sided asset. Redeeming a single-sided asset means that transactions have already occurred in the ETHx pool, and a 0.1% transaction fee will be charged.
LSD Swap Function: The LSD Swap function will be opened in the future, allowing users to exchange ETH/stETH/frxETH/rETH through ETHx. Each transaction will incur a 0.1% service fee, which will go into the LSDx treasury.
ETHx Earn Function: This feature allows users to stake ETHx to earn the platform token $LSD. Users can choose the staking period, with longer staking periods corresponding to higher yields. In the first 30 days, ETHx Earn will provide 300,000 $LSD as a daily reward. Subsequently, every 30 days, LSDx Finance will make DAO reward adjustment decisions for the ETHx reward pool to adjust the corresponding token inflation.

UM (Ultrasound Money) Stablecoin (Launch on 06/30)

Introduction: UM is a stablecoin based on LSD, created by over-collateralizing ETHx to ensure its value. UM aims to be a true super currency with multiple use cases:
UM's price stability makes it an ideal medium of exchange, and its fast transaction speed makes it suitable for daily payments.
UM can be used for lending purposes, where users can collateralize UM to borrow other cryptocurrencies or stablecoins. Since UM is created by over-collateralization, its stability reduces the lender's risk, making it an attractive choice for borrowers.
UM can be used as a liquidity provider in DeFi protocols. UM can be added to liquidity pools to facilitate transactions in DeFi protocols, providing users with another liquidity supply option and earning additional returns.
UM can also be used to create structured products, such as Farm strategies or synthetic assets. These products can provide users with more complex investment options and become possible through UM's price stability and collateral mechanism.
-Minting: Users can mint UM by over-collateralizing ETHx as collateral for LSDx. There is no minting fee, and the minting rate can be as high as 50%. This means that for every $2 of ETHx, up to 1 UM can be minted. The excess ETHx serves as collateral to ensure the stability of the UM stablecoin.
Liquidation: When the value of a user's ETHx declines, liquidation will be triggered when the collateral ratio reaches 110%! The liquidator will execute this process: the liquidator will first repay the debt, and the remaining amount will be returned to the minter. This process ensures that UM remains stable and maintains its value.
Withdraw Collateral by Burning UM: Users can burn UM to withdraw the collateralized ETHX, with a burning fee of 1%. This process is direct, and once UM is burned, the corresponding amount of ETHX will be returned to the user.
Holding UM Rewards: Holding UM will earn rewards from the collateralized ETHx used to mint coins, and all rewards will be distributed in $LSD tokens. The specific reward model has not been disclosed.

Token Economics

The LSD Token is the governance token of the platform, used to vote on proposals and decisions related to the development and management of LSDx. The total supply of $LSD tokens is 1 billion, and the allocation and specific details are as follows:

45% - Mining Pool: 450 million $LSD tokens will be allocated to the mining pool and released according to mining contracts. This is used to incentivize users to contribute to network security and gain more traction.
20% - Treasury Reserve: 200 million $LSD tokens will be allocated to the treasury reserve and managed through DAO. This portion will be used to fund future development and upgrades, as well as community initiatives and incentive grants.
15% - Team: 150 million $LSD tokens will be allocated to the team, with a one-year cliff release and a subsequent linear release over 3 years. This is used to incentivize long-term team participation in the project and ensure their vested interest in the success of LSDx.
10% - Marketing: 100 million $LSD tokens will be allocated to marketing, with an initial 10% unlocked for liquidity, and the remaining portion linearly released over the next year. This allocation will help ensure the healthy value and market liquidity of $LSD tokens.
10% - Community Development: 100 million $LSD tokens will be allocated for community development, with a 6-month cliff release and a subsequent linear release over 2 years. This allocation will be used to support ensuring the long-term financial stability of the platform.
Overall, the $LSD token economics aims to create a sustainable and balanced token economy for the LSDx platform, incentivizing all stakeholders to contribute to the platform's growth and success.

$LSD tokens began mining on March 17th. Let's take a look at the market situation of $LSD tokens: It was listed at a price of 0.1491/$LSD on March 17th at 19:00, and reached its highest price of $0.2389 within a day. As of the writing date of this article, the real-time token price is $0.0879, a decrease of 40% compared to the initial listing. The total issuance and maximum issuance of the token are both 41,000,000, and the market value after full release is approximately $3 million. After the listing, with a large number of $LSD tokens mined in the farm activity and the consumption scenario not yet fully realized, the circulating quantity in the market began to increase significantly, and the token price continued to decline, reaching its lowest price of $0.0401 on March 23rd, a decrease of 73% compared to the initial listing. However, the distinctive product ETHx of LSDx is nearing its launch, which will be a milestone event for LSDx to truly enter the LSD market. As the launch date approaches, the 7-day $LSD investment return ratio has reached 25.89%, and the token price has slightly increased. It is sustainable to observe the subsequent trend.

Conclusion

The reasons why Foresight Ventures invested in LSDx Finance are summarized by the official as follows:

Timely positioning makes it possible for LSDx Finance to execute "vampire attacks";
GLP-like liquidity solutions address the liquidity issues of LSD assets;
ETHx, as a basket for $LSD tokens, balances different LSD risks and benefits;
UM, as a decentralized, interest-bearing stablecoin asset, is valuable to the entire crypto ecosystem.
Foresight Ventures believes that the LSDx Finance protocol can inject new vitality into the LSD industry and is optimistic that LSDx Finance can effectively capture market share of LSD asset liquidity.

The key product ETHx of LSDx Finance will be launched on April 6th. Interested friends can learn more about the latest information through the following links:

Official Website:

https://www.lsdx.finance/

Twitter:

https://twitter.com/LSDxfinance

Discord:

https://discord.gg/GnXWfsz8Dm

White Paper:

https://docs.lsdx.finance/

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