Our initial version of LSDx came into being during the escalating competition known as the Curve Wars. As we continued to develop our protocol and attracted renowned innovators to collaborate with us, we quickly saw a more expansive vision for LST. Encouraged by the rise of new momentum-building mechanisms within Ethereum and zk-Rollups, as well as the success of the Shanghai Fork, it became clear that LSDx had the potential to evolve into a critical piece of infrastructure for active users.
The $LSD Flywheel War involves utilizing the LST stableswap mechanism, a key element in this ongoing conflict. This mechanism offers several benefits, notably a very low slippage ratio for LST assets. The ETHx Bridge Base Pool, which includes ETH/stETH/frxETH/rETH, along with other Long Tail Pools, is essential in making this possible. Additionally, the introduction of ETHx as a pegged ETH currency is an innovative flywheel gaining traction in the DeFi landscape. This unique approach improves capital efficiency in lending and stablecoin systems, enabling quick and efficient value transfer between various assets.
These innovative solutions have brought significant benefits to the $LSD Flywheel War and the broader DeFi economy. They enable smooth, cost-effective transactions, which not only stimulate more adoption and usage of Ethereum but also enhance the stability and liquidity of the market. A prime example of this is the $ETHx Earn program, which encourages market participants to keep their assets within the ecosystem by offering rewards based on protocol revenue and Protocol Owned Liquidity. This strategy promotes a stronger, more liquid market, further fueling the $LSD Flywheel War.