Multi-Chain Ecosystem LSD Development Report: Huge Track Potential, Projects Still in Early Stages

2025-07-30 09:41:01

Multi-Ecosystem LSD Development Report: The Track is Grand, the Project is Early Stage

Last week, we released the LSDFi ecosystem report and a report on the impact of the Shanghai upgrade on LSD. However, both the selected projects and the context of our thinking are centered around Ethereum. This is because the amount of funds brought in by Ethereum's liquid staking alone exceeds $14 billion. Today's report will explore the development and gameplay of LSD in other public chain ecosystems, and observe the development status, trends, and the impact on the LSD industry from the data perspective, as well as discussions on LSD product design and equity. This research will include the following public chains: BNB Chain, Cardano, Polygon, Solana, Polkadot, Avalanche, Cosmos, and Aptos.

BNB Chain

The current staking status of BNB is similar to that of Ethereum, with a staking rate of 15.44%, and the average annualized yield for staking is currently about 2.84%, which is relatively low. Among them, the largest decentralized staking platform on the BNB Chain accounts for approximately 0.56% of the circulating supply.

The reasons for the slow development of LSD on the BNB Chain are as follows:

The native DeFi protocol of BNB has high yield.
BNB Utility:

BNB is the platform token of the exchange, holding it can earn you fee discounts and other services.
Binance has dedicated services like Launchpad to attract users to hold BNB in their wallets or exchanges.

For trading holders, whether placing it on Binance for fee discounts or participating in various DeFi products on DEX, the yield and stability are higher. On the BNB Chain, the demand for LSD is much lower than that on the ETH chain.

Cosmos

The staking rate of Cosmos Hub is approximately 61.96%, with an average staking yield of about 25.92%, and there is a 21-day waiting period to un-stake after staking. The staking status of Cosmos is technically distinctive compared to ETH and BNB chains, as ATOM is merely the token of Cosmos Hub, and any application chain launched within the Cosmos ecosystem can operate without using the ATOM token.

The Cosmos ecosystem is now singled out, and the scale of LSD is very small, with not many LSD application cases. Stride, as the current leader of Cosmos LSD, has a total TVL of only $15M.

Reasons for the small scale of LSD:

The Cosmos ecosystem has many similar L1 chains, but these ecosystems are currently unable to break out of Cosmos.
Opportunity Cost: High yield rates bring about opportunity costs. Taking ATOM as an example, if the holder does not stake ATOM, the opportunity cost is approximately 26%.
Airdrop: It seems that staking in LSD cannot receive airdrops.
Liquidity Risk: ATOM staking for LSD requires a 21-day unlocking period.

But Cosmos LSD still has great prospects:

Cosmos 2.0 will increase the value of ATOM and have a direct impact on the prosperity of DeFi within the ecosystem.
The DeFi developments of Osmosis and Kava have built more infrastructure for LSD.
The new LSD protocol like Quicksilver provides governance features such as proxy voting.
LSD can improve capital efficiency.
External factors: The Ethereum LSD War will indirectly promote the development of Cosmos LSD.
Cosmos is preparing to launch a liquidity staking model (LSM).

Polygon

The staking rate for Polygon is 39.92%, with an average annualized return of 8.82%. Lido's APY on Polygon is the highest, and stMATIC is widely used in DeFi. This may lead to Lido being the dominant player in the Polygon LSD space now and in the future.

Solana

The staking rate of Solana's network is 70.75%, and the average annualized yield for staking is 70.75%. During the statistical process, some LSD projects have seen their TVL decline since May 2022, and now they can no longer be found. New entrants led by Stader may bring new developments to Solana LSD.

Cardano

The current staking rate of Cardano is 68.73%, with an average annualized return of 3.26%. Cardano's unique technical architecture makes it difficult for LSD to develop within its ecosystem, and ADA will not be locked for a certain period or need to be transferred to a mining pool during the staking period.

Avalanche

The network staking rate of Avalanche is 62.05%, with an average annualized return of 8.48%. Currently, only two LSD projects have been found, among which Benqi's sAVAX is dominant. The DeFi development of Avalanche is relatively good, but there are few LSD projects, possibly due to technical reasons and the influence of the DeFi landscape.

Polkadot

The staking rate of Polkadot is 47.05%, with an annualized staking yield of 15.29%, and a staking lock-up period of 28 days. Due to the existence of crowdloan (, the yield attractiveness of LSD is somewhat insufficient, leading to many DeFi projects being built around PLO. Lido officially suspended Polkadot and KSM staking deposits on March 15, citing reasons including the relatively underdeveloped DeFi ecosystem, which restricts the potential applications and benefits of LSD.

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Aptos

The node staking volume of Aptos accounts for 82.5% of the APT supply, and the average annualized return for miners is around 7%. Many Aptos-related LSD projects have been discovered, but most stopped updating after October 2022. However, the number of holders of tAPT and stAPT is much higher than that of other LSDs of similar scale in the ecosystem.

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Summary

The multi-chain nature of LSD business is an inevitable trend, but most projects start from a certain chain or ecosystem before branching out to other public chains.
Many LSD projects have poor UI experience and also very poor UX experience.
CEX is a factor that cannot be ignored and may influence speculators' attention towards the LSD track.
Pay attention to the continuous operational capability of LSD protocols in the new L1s/L2s ecosystem.
LSD has become an essential DeFi protocol for public chains.
LSD business may become a new growth point for the income of old DeFi.
LSDFi project can consider collaborating with wallet providers.

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Discussion

The correctness of staking, participation in governance, and maintenance of network security should not be overlooked.
The LSD market has great imagination space, which can promote network staking and DeFi development.
The biggest influencers in the battle of LSD may be node operators and CEX.
Non-PoS network native assets may also design LSD, such as through governance rights and other means.

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