The Liquidity Relaying Token (LRT) has made it easier for the development of DeFi, and Stader Labs, a multi-chain staking facility, was created for the application of LRT. Can it really enjoy the benefits of the Ethereum ecosystem?
Overview of the application scenarios of SD assets and understanding the context of their ecological development
Stader Labs’ economic model: Introducing liquidity staking tokens, but their inflation and transparency are questionable
ETHx has been selected for the upgrade plan of the EigenLayer network, expanding its application scenarios
The future value of SD assets is worth noting
In the rapidly developing cryptocurrency field, Stader Labs is an innovative company that focuses on research and development of blockchain and cryptocurrency technology. Stader Labs’ token, SD (Stader Digital), has become a highly regarded token in the cryptocurrency market. SD token is not only the core cryptocurrency of the Stader Labs platform but also plays an important role in the entire digital financial ecosystem, driving various transactions and incentive mechanisms within the ecosystem. The following will introduce the details of this project.
As the native token of the Stader Labs platform, SD token has many unique features and uses, including:
1. Node operation support: Node operators need to stake SD tokens to participate in the operation of the network in order to maintain its security and stability. This not only helps protect the network from potential attacks but also provides node operators with an opportunity to earn rewards.
2. Incentive mechanism: SD token holders have the opportunity to lend their tokens and receive additional SD tokens as incentives, as well as 10% of the node operators’ deposit. This mechanism encourages the active use and holding of SD tokens.
3. Token economics: Stader Labs has introduced $xSD, a new token economics that allows SD token holders to stake their tokens to obtain $xSD. $xSD holders will share a certain percentage of protocol revenue and have governance rights. In addition, $xSD can be exchanged back to SD tokens within 7 days at the current exchange rate, providing more flexibility for holders.
4. Buyback mechanism: The protocol will use a certain percentage of revenue to repurchase SD tokens and stake them as $xSD, providing support for the SD token market.
However, it should be noted that despite the strong utility and potential of SD tokens, they also face certain market pressures. In addition to the reward mechanism for node operators, the team’s token allocation started to unlock in January this year, which may have an impact on the market price.
Stader Labs is not just a participant in the Layer Relaying Token (LRT) protocol. Two months ago, they launched a liquidity staking token called ETHx, which has attracted $32 million in deposits. Although Stader may be a bit late in the LST (LayerStone Token) game, they are in the early exploration stage of the LRT era.
In the cryptocurrency market, Stader owns the SD token (Stader Digital), which makes the possibility of airdrops unlikely. However, with the LRT narrative gradually taking the lead, SD tokens may become an attractive bet.
Stader Labs raised a total of $16.5 million in seed funding and $23.5 million in ICO funding from multiple venture capital firms in 2021/2022, providing them with ample resources and funds to continue advancing the project.
Early investors are unlikely to sell their tokens immediately. The ICO round has been fully unlocked, while seed round investors still have approximately 75% of their tokens locked. Especially with the upcoming launch of SD token staking, do not expect them to sell before future positive news.
Soon, we may see the launch of SD token staking on the mainnet to earn $xSD and participate in governance, with the potential to receive protocol fees (relevant proposals have been made in the governance forum).
Stader Labs will charge approximately 5% fee from staking rewards, and the team claims that the current annual revenue of the protocol is $1.2 million. With the launch of ETHx, this number is expected to increase.
It is worth noting that once Stader Labs implements revenue sharing, it will become the first mainstream LSD protocol to adopt a fee conversion model.
In the short term, the inflation level of SD tokens and how the team controls the token’s issuance will be a focus of attention. Although SWISE has a high FDV/mcap ratio, it did not prevent it from doubling in just 3 days. Stader Labs plans to release a monthly token issuance plan on the governance forum.
The last concern is the transparency of Stader Labs. Information about the treasury address, token issuance rate, and revenue should be easily found on its website/documents, but they are not actually provided. However, after contacting the team, they stated that they will improve transparency in the future.
In the early morning of December 19, 2023, the EigenLayer network, a repeated staking protocol for Ethereum assets, underwent a notable upgrade. In addition to increasing the total staking limit of LayerStone Token (LST), several new LST tokens were introduced, including osETH (StakeWise), swETH (Swell Network), OETH (Origin Protocol), EthX (Stader Labs), WBETH (Binance), AnkrETH (Ankr), and six others.
This upgrade made EigenLayer a network that supports 9 different LST tokens, including stETH (Lido), rETH (Rocket Pool), and cbETH (Coinbase), which were supported from the early launch.
However, a key change brought by this upgrade is that EigenLayer not only set the overall LST staking limit to 500,000 tokens but also set an individual limit of 200,000 tokens for each LST token. This means that the maximum staking amount for each LST token is limited to within 200,000 tokens. The current situation shows that the re-staking amount of stETH has exceeded 170,000 tokens, and once it reaches 200,000 tokens, users will need to choose other LST tokens for re-staking. This highlights the market’s demand and diversity for different LST tokens.
Based on this, the EthX token launched by Stader Labs shows potential returns in the following two aspects:
1. DeFi protocol collaboration: Data shows that Stader Labs has collaborated with major DeFi protocols on other chains over the years, including Aave, Balancer, QiDao, QuickswapDEX, Apeswap, etc. Therefore, EthX token has the opportunity to earn higher returns from these DeFi protocols, providing more attractive rewards for its holders.
2. Node operator incentives: To attract more node operators to join, Stader Labs will provide 1 million SD tokens as incentives for active node operators. Data shows that the total locked value (TVL) of Stader Labs has reached $91 million, while the market capitalization (MC) of SD tokens is $22 million.
By entering the Ethereum staking service market, Stader Labs is expanding its ecosystem, which is seen as an important moment for its development. In addition, SD tokens have successfully integrated into the Ethereum staking ecosystem, providing additional potential sources of income for SD token stakers. All this data highlights the current status and future potential of the Stader Labs market, attracting widespread attention from investors.
Overall, SD tokens have great potential and are worth paying close attention to. In terms of airdrops, depositing Swell Network (swETH) may be one of the best opportunities on EigenLayer. Because the protocol currently does not have a token, this means that you may receive airdrops of both Swell tokens and EigenLayer tokens.
It should be noted that Stader ($SD) is undervalued in terms of market capitalization. Its market capitalization is only $30 million, while its total value locked (TVL) has reached $330 million, ranking fourth in terms of deposit amount on EigenLayer (ETHx).
Stader Labs’ team has been working hard on development and is transitioning to a model similar to Rocket Pool, allowing validators to borrow SD tokens, providing more opportunities for SD token holders to earn income.
However, it is important to note that the project is still in its early stages of development, and investors should exercise caution in managing risks.