Trade the Liquid Staking Index ($LSI) Market with Demex
You can now trade a basket of liquid staking derivative (LSD) protocol tokens as a liquid staking index (LSI) on Demex!
Demex introduced a new perpetual market to its list of markets called LSI-PERP. Now, you may likely not understand the concept of this market and this blog article is to help you understand just that!
What is Liquid Staking?
Liquid staking is a new and exciting way to participate in the crypto ecosystem, especially on Proof-of-Stake chains.
Proof-of-Stake chains are networks that use a consensus mechanism that rewards users for locking up their assets in a contract or a node. This helps secure the network and validate transactions. However, staking also means that users lose access to their assets until they decide to unstake them. This can be inconvenient and risky, especially in a volatile market.
Liquid staking solves this problem by creating a liquid token called Liquid Staking Derivatives (LSD) that represents the staked asset. This token can be freely traded, transferred, or used for other purposes without affecting the staking rewards of the original asset.
For example, if you stake 100 ETH, you will receive 100 LETH (Liquid ETH) that you can use as you wish. Meanwhile, your 100 ETH will continue to earn staking rewards.
Liquid staking is not only convenient and profitable for users, but also beneficial for the crypto space as a whole. It increases the liquidity and activity of the market, as well as the interoperability and innovation of different chains.
Liquid staking has been adopted by some of the most popular and promising chains in the industry, such as Ethereum, Arbitrum, Cosmos, and more.
Now that you have a basic idea of what liquid staking is and how it works, you might be wondering about LSI and how it comes into play.
What is Liquid Staking Index (LSI)?
Liquid Staking Index (LSI) is a basket of governance tokens by Demex from the top Liquid Staking (LSD) protocols in the crypto space.
Liquid staking governance tokens are tokens that represent the voting rights and decision-making power of the liquid staking protocols. These protocols are platforms that enable users to stake their assets and receive liquid tokens in return.
For example, Lido Finance is a protocol that allows users to stake their ETH and receive stETH (Staked ETH) as an LSD.
The liquid staking index currently comprises six of the most popular and reputable liquid staking governance tokens in the market:
- Lido Finance (LDO),
- Frax Finance (FXS),
- Rocket Pool (RPL),
- Ankr Network (ANKR),
- Stride Zone (STRD), and
- StaFi Protocol (FIS).
These tokens are weighted based on various factors, such as their market cap, trading volume, volatility, circulating supply, etc. The image below shows the current ratios as of May 2023.
The liquid staking index is designed to reflect the performance and trends of the liquid staking space as a whole. By trading the index, users can gain exposure to multiple liquid staking protocols with one transaction, saving time and fees. Users can also benefit from the diversification and risk reduction that the index provides.
The liquid staking index is not static, but dynamic. It may change over time to adapt to the changing market conditions and user preferences. The index composition may be re-evaluated periodically to ensure that it accurately represents the liquid staking space. Governance tokens may also be added or removed from the index based on their popularity, innovation, security, etc.
Note: Liquid Staking Index (LSI) is a special feature of Carbon and Demex offers one of the easiest and most convenient ways to engage with LSDs in a trading market.
The Potential of LSI
One of the most compelling reasons to trade the liquid staking index on Demex is the potential to outperform traditional cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
As the liquid staking space grows and evolves, so does the value and demand of the liquid staking governance tokens. These tokens do not only reflect the performance of their respective protocols but also capture the innovation and collaboration of the liquid staking ecosystem.
Based on a historical projection, LSI had the potential to outperform BTC and ETH price movement from the beginning of this year will continue. Check it out.
This prediction was based on several criteria, such as the market cap, trading volume, volatility, and innovation of the liquid staking governance tokens. These criteria reflect the popularity, liquidity, stability, and potential of the liquid staking protocols. As more users adopt liquid staking and more protocols join the ecosystem, these criteria are likely to improve over time.
Demex chose to introduce an LSI-PERP market to provide users with an easy and convenient way to access and trade this emerging asset class.
By offering a perpetual contract that tracks the price of LSI without expiry or settlement, Demex enables users to trade LSI-PERP with leverage and low fees. Users can also benefit from the high liquidity and security of Demex, as well as its cross-chain compatibility and user-friendly interface.
Why Trade LSI?
If you are interested in liquid staking and want to take advantage of its growth potential, Demex’s LSI-PERP market is a good place to start. Well, there are many benefits and reasons to do so, and here are some of them:
- LSI allows traders to gain exposure to the best liquid staking protocols simultaneously, reducing volatility and concentration risk.
By trading a basket of liquid staking governance tokens, traders can diversify their portfolios and hedge against the fluctuations of individual tokens. This way, traders can benefit from the overall performance and trends of the liquid staking space, rather than relying on a single protocol or token.
2. The composition of LSI is allocated based on the protocols’ key metrics, maximizing the risk-to-reward ratio.
The liquid staking governance tokens that are included in LSI are selected and weighted based on various factors, such as their market cap, trading volume, volatility, innovation, security, etc.
These factors ensure that LSI represents the most popular and reputable liquid staking protocols in the market, as well as the most promising and innovative ones. By trading LSI, traders can access the best opportunities and returns that liquid staking has to offer.
3. LSI-PERP offers a convenient and cost-effective way to trade LSI with leverage and low fees.
LSI-PERP is a perpetual contract that tracks the price of LSI without expiry or settlement. This means that traders can open and close positions at any time, without worrying about rollover costs or delivery dates.
LSI-PERP also allows traders to trade LSI with leverage up to 10x, amplifying their profits or losses. Moreover, LSI-PERP has low fees compared to other platforms or markets, making it more affordable and attractive for traders.
How To Begin Trading LSI!
If you are ready to trade the LSI-PERP market and enjoy the benefits of liquid staking, you might be wondering how to do so on Demex. Well, don’t worry, because trading on Demex is easier than ever.
Just follow these simple steps and you will be trading LSI-PERP in no time:
- Launch the Demex app on your browser.
This is the official website of Demex, where you can access all the markets and features that Demex offers.
2. Connect your wallet.
Demex provides a number of trustless wallet options for connection, such as Keplr, Leap, Metamask and Ledger. Choose the wallet that suits your preference and follow the instructions to connect it to Demex.
3. Deposit selected stablecoins such as $USDC, $BUSD and $axlUSDC that get auto-converted to $USD.
You can deposit them from any supported blockchain or network, such as Ethereum, Binance Smart Chain, Polygon, etc. Once you deposit them, they will be automatically converted to $USD, the base currency for trading LSI-PERP and other markets on Demex.
4. Start trading on the LSI-PERP market!
Once you have $USD in your wallet, you can start trading LSI-PERP with one click. You can choose to go long or short with up to 5x leverage, depending on your market view and risk appetite. You can also use various tools and features that Demex provides to enhance your trading experience, such as charts, indicators, order types, etc.
That’s it! You have successfully traded LSI-PERP on Demex. Congratulations!
Liquid staking is the future of crypto. It gives you the best of both worlds: staking rewards and liquidity. And now, you can trade it on Demex, the first and only platform that offers the Liquid Staking Index (LSI), a basket of liquid staking governance tokens that captures the performance and trends of the liquid staking space.
By trading LSI-PERP, you can diversify your portfolio, reduce your risk, and potentially outperform Bitcoin and Ethereum. Don’t miss this opportunity to join the liquid staking revolution.
Start trading LSI-PERP on Demex today!
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