How Do LPDs Differ From LRTs & LSTs & What Are Their Benefits?
The Vector Reserve Public Sale LBP launches here on 22nd January at 12pm EST.
At the heart of the Vector Reserve project is vETH, a first-to-market Liquidity Position Derivative (LPD), which represents the next stage of the liquid restaking revolution.
But what is an LPD and how does it differ from traditional Liquid Restaking Tokens (LRTs) and Liquid Staking Tokens (LSTs).
Read on to find out.
What Are LSTs
LST stands for Liquid Staking Token. LSTs allow users who have staked their ETH to access the value of their holdings and staking rewards via a fully-tradable, liquid token. The LST can then be deployed in a range of DeFi activities without having to unstake the underlying asset. Examples of LSTs include Lido’s stETH and Rocket Pool’s rETH.
What Are LRTs
LRT stands for Liquid Restaking Tokens. Liquid Restaking Tokens take advantage of the new opportunities offered by Eigenlayer. Eigenlayer allows holders of ETH and LSTs to earn further rewards by restaking their holdings to secure protocols other than Ethereum. LRTs work in a similar way for restaked ETH to how LSTs work for staked ETH. LRT providers allow users to redeem their restaked ETH or LSTs for a liquid token that can then be user for other DeFi activities. Examples of LRTs include Restake Finance’s rstETH, Renzo’s ezETH, Kelp DAO’s rsETH, Rest Finance’s restETH, and Ether.fi’s eETH.
What Are LPDs & How Do They Differ From LSTs / LRTs?
LPD stands for Liquidity Position Derivative. LPDs are a new asset class, with Vector Reserve’s vETH being the first to arrive on the market. LPDs are designed to capture the full value of the LST/LRT market in a low-risk, diversified way that can provide higher yields.
Whereas LRT only succeed in capturing restaking yields, LPDs go one step further by boosting restaking yields with Superfluid Staking yields. Superfluid Staking is another part of the Eigenlayer functionality that has gone under the radar since its launch. Superfluid Staking allows users to stake LP tokens, which are the tokens received by providers of liquidity to pools on decentralized exchanges.
vETH takes advantage of the opportunities that Superfluid Staking offers by accumulating liquidity positions in the various ETH/LST and ETH/LRT pairs on the market. Users deposit ETH or yield-bearing ETH derivatives into the Vector protocol and Vector then pairs them into LPs across multiple chains and DEXs. The LP tokens are then Superfluid Staked on Eigenlayer.
In this way vETH captures both the restaking rewards and the rewards from Superfluid Staking. Additionally, yields from trading fees in the liquidity pools provide a further boost. This positions vETH to deliver superior yields compared with regular LRTs or LSTs.
Get Ready For The Vector Reserve Public Sale LBP
If the concept of LPDs excites you, then you have an opportunity to get in on the ground floor of the Vector Reserve project by participating in our Public Sale LBP. It will be taking place between Monday 22nd January at 12pm EST and Thursday 25th January at 12pm EST. The TGE and dApp will launch 24 hours later on Friday 26th January, subject to completion of audit.
More details on the LBP can be found here. When the LBP opens, you can participate by visiting the Vector Reserve page on the Fjord Foundry website to purchase your allocation.
Further info on the Vector Reserve can be found here:
Docs: https://vector-reserve.gitbook.io/
Website: https://www.vectorreserve.com/
Link To Public Sale LBP Page:
https://app.v2.fjordfoundry.com/pools/0xd8c383De549A4f6da6893E1A8B31d9117268b1Ab
LBP Instructions: https://medium.com/@vectorreserve/get-ready-for-the-vector-reserve-public-sale-lbp-39584baaab98
Twitter / X: https://twitter.com/vectorreserve
Telegram Community: https://t.me/vectorreserve
Medium Project Summary: https://medium.com/@vectorreserve/how-vector-reserve-is-creating-the-next-step-change-in-the-lst-lrt-market-with-defis-first-72d712573445
