Background
The Restaking Summer is coming.
With the Eigenlayer mainnet gradually launches, many users require the LRT protocol to seamlessly handle all the restaking processes in the background and efficiently collect and distribute rewards.
The LRT yield is built on top of the LST yield, catering to individuals seeking additional yield beyond the stETH yield. With LRT, the extra yield is derived from subsidizing future incentives from both Eigenlayer and the LRT protocol (approximately 28%, based on PT eETH Fixed APY). This means the expected APY for eETH is around 28%, a significant increase compared to the 3.5% baseline.
Currently, there are more than a dozen LRT options available in the market, each with its own unique status.
Motivation
The LST competition significantly contributed to Curve’s growth in Total Value Locked (TVL), trading volume, and the Incentive Market. Recently, Pendle has also experienced rapid growth in both liquidity and trading volume following the launch of LRT pairs.
F(x) should be the next with the fxUSD launch both on LST and LRT
Some Examples
Considering our plan to develop fxUSD based on LSD, it makes sense to explore the creation of an isolated innovation pool based on the LRT to align with current trends. This proactive approach allows us to stay ahead and capitalize on potential opportunities.
Furthermore, building relationships with numerous LRT protocols, which are likely to become our future customers as they incentivize their rebalance pools, is a strategic move. Establishing these connections early on not only fosters collaboration but also positions us favorably in the evolving market landscape.
Detail Proposal
Similar to the concept of fxUSD, we can explore the creation of a new pair involving fxUSD and xeETH, with the backed asset value being eETH. In this arrangement, fxUSD in the rebalance pool would yield high returns, while xeETH would potentially receive Eigenlayer airdrops (points for now). This is just an example, and we can delve deeper into this idea for further discussion and refinement.