In the ever-evolving world of cryptocurrencies, stablecoins have emerged as a popular option for investors and traders seeking a more stable alternative to traditional floating cryptocurrencies. These altcoin projects are pegged to a particular asset or basket of assets, keeping their value relatively stable. One of the latest developments in this area is the rise of LSD-backed stablecoins, which has attracted the attention of both investors and researchers.
Winter Soldier: These altcoin projects are worth considering!
Winter Soldier, a well-known VC researcher, recently shared his views on LSD-backed stablecoins and recent developments in a thread of tweets, revealing the intricacies and complexities of three key players in this space. These altcoin projects: Lybra Finance, Raft and Prisma Finance.
Lybra Finance (LBR)
Lybra Finance’s stablecoin is an interest-bearing stablecoin backed by eUSD, ETH, and stETH. One of Lybra’s distinguishing features is that it airdrops the stETH yield to eUSD holders, encouraging them to hold the stablecoin and benefit from its return. Lybra received a lot of attention. It also reached a Total Locked Value (TVL) of over $344 million. Despite this, it has faced challenges such as frequent upside depreciation and trading premium on eUSD. Winter Soldier also highlighted concerns over liquidity in Uniswap, which may struggle to meet the selling pressure of Lybra’s native token LBR.
RAFT
Moving on to Raft, Winter Soldier shed light on the unique features of this LSD-backed stablecoin. Raft allows users to issue R tokens by collateralizing wstETH or rETH. One major change Raft made was replacing the stability pool (SP) with a flash mint/credits module. The rationale behind this decision is to eliminate the need for a subsidized stability pool. Moreover, it was instead to strengthen pegging in Automated Market Makers (AMMs). It was also to use incentives to make liquidity attractive. Winter Soldier highlighted the benefits of Raft’s flash minting mechanism, which allows liquidators to access R tokens for liquidations within a single transaction and offers leverage and deleverage opportunities.
Prisma Finance (PRISMA)
The last stablecoin Winter Soldier discussed was Prisma Finance. Prisma Finance’s acUSD is backed by a combination of blue-chip LSDs such as stETH, rETH, cbETH, sfrxETH and BETH. Prisma’s codebase is based on Liquidity. But it introduced several innovations, including self-paying loan positions, a shared stabilization pool, and tokenomics to drive PRISMA emissions. Winter Soldier also talks about the collaboration between Prisma and Lido. It is possible for Lido to raise PRISMA to incentivize the issuance of acUSD using LSD tokens.
Lybra, Raft and Prisma are shaping the industry
As the market continues to evolve, it will be interesting to see how Lybra addresses the challenges it faced in version 1 and how Raft expands its collateral types. Crypto enthusiasts follow these developments. cryptocoin.comThey will follow. Furthermore, the collaboration between Prisma and Lido presents an intriguing use case for driving emissions and promoting stablecoin issuance.
The rise of stablecoins powered by LSDs and the improvements and innovations brought by Lybra, Raft and Prisma highlight the increasing complexity and potential of this emerging industry. With a strong emphasis on governance, liquidity and design flaws, the developers behind these stablecoins are striving to create a new era of stable and profitable digital assets.
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