LSD on WYND DAO

The next product to be released by WYND DAO is liquid staking derivatives (LSD). LSDs represent liquid versions of staked assets. Deposits into WYND’s LSD products will return the user with wyAssets such as wyJuno. wyAssets will automatically claim the staking rewards and restake those rewards once per day so users do not have to manually claim rewards. This autocompounding also turns the staked APR into a higher APY. Over time, the compounding of rewards will increase the value of wyAssets in relation to the native deposit asset. The first LSD wyAsset will be wyJUNO with several more to follow.

LSD Gauges

WYND stakers will vote on gauges that direct the deposited assets into validators based on the total gauge weight taken in a snapshot. The snapshot duration for each asset is equivalent to the unbonding period of that asset. When the snapshot ends, the new gauge weights will be captured and previously staked assets in the validators will be redelegated so that the final distribution matches the results of the snapshot.

Validators who stake $WYND can use their voting power to directly increase their allocation of staked LSD assets. Similarly, communities and DAOs can rally together to apply gauge weight for a specific cause, such as to promote decentralization to increase the Nakamoto coefficient, to increase delegations to core contributors, or to increase delegations to validators that drive social impact. The power and impact of each staked $WYND multiplies with each new chain eligible for LSD increases.

Stableswap pools

Stableswaps are a tried and true way of gaining capital efficiency, compared to xy=k pools, in swapping assets that are tightly and predictably correlated in price. This makes LSD assets to native assets a great candidate for stableswap pools, such as JUNO/wyJUNO. Such a pool that pairs a native asset with a LSD asset would effectively give the liquidity provider single asset delta exposure while allowing the liquidity provider to earn additional yield. To learn more about the mathematics behind stableswap pools, we recommend you check out this video.

The importance of LSD in WYND DAO

Because LSD assets accumulate and compound earned staking rewards within the assets themselves, holders and liquidity providers are constantly gaining yield by simply holding the asset. This opens the door for new and creative ways to earn yield, such as two LSD assets paired with each other. For example, wyJUNO/wyOSMO without any trading volume or incentives would generate a yield equivalent to the weighted average APY of Juno and Osmo staking rewards net of fees. Pools that are paired with two LSD assets can truly offer mind-blowing upside to liquidity providers.

LSD assets and stableswap pools will play a crucial role in synergizing with existing and future WYND products.

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