6. Protocol Synopsis

6.1. The Players

6.1.1. Staking

Staking pools are initially funded and backed via the lsdtreasury.eth wallet. This initial liquidity is used to ensure stable early implementation while the treasury builds up revenue from the 3% buy and sell tax as well as staking rewards.

6.1.2. LS-ETH

$LS-ETH is the liquid token rewarded to investors providing ETH to the protocol to be staked. This $LS-ETH can then be used in any other DEFI application the investor wishes, increasing the leverage they have over their ETH.

6.1.3. veLSD

$veLSD is a reward token for providing $LSD to the staking pool. $veLSD is needed for governance purposes to vote on protocol changes and implementation. For example: rebalancing staking providers or adding new providers.

6.1.4. Governance and DAO

Decentralized decision making via $veLSD gives the power to the community and the investors of the protocol. Adaptation and growth of the $LSD protocol will be governed through this decentralized mechanism to prevent any malicious characters from obtaining too much power. $LSD tokens must be locked to receive $veLSD and multiply APR rewards reducing circulating supply of $LSD and returning power to the community who voluntarily lock and stake their $LSD.

6.2. The Use Case

1. Users deposit $ETH and are given $lsETH in return.

2. The $LSD aggregator protocol stakes this ETH among the existing protocols available (LIDO, RPL, Manifold, SWISE etc.)

3. $LSD protocol pays out yield from these protocols via a proprietary smart contract mechanism. In addition, the $LSD also pays out veLSD tokens which are not sellable for a lockup period.

4. Users can add a multiplier on their APR yield by locking their $LSD to $veLSD.

5. $veLSD is utilized in governance decisions by the community and those that voluntarily lock their $LSD tokens for a higher APR.

6. Eventually derivative tokens obtained from staking by the $LSD protocol are distributed into other DeFi protocols. The selected distribution and allocation are to be determined via the DAO and profits are then distributed only back to users who have staked their $LSD.

Figure 1: ETH staking through the LSD Protocol. Deposit ETH through our DAPP and receive lsETH. The deposited ETH is then dispersed through our protocol into liquid staking pools, earning the user passive income while their lsETH retains the liquidity of their ETH deposit.

Figure 2: LSD staking through the LSD protocol. Deposit LSD and receive veLSD. veLSD provides governance rights for locking LSD and providing liquidity to our staking pools while still earning passive income on your staked LSD.

Figure 3: Stake with the $LSD protocol and we distribute into existing liquid staking protocols on your behalf. Taking the portfolio managing from you and providing you with the best potential return on your investment.