- The DeFi project, Index Coop, will launch a new index token on the market, which will be made up of three different liquid participation derivatives (LSD) of Ether.
- The Diversified Staked ETH Index (dsETH) token provides exposure to Rocket Pool’s rETH, Lido’s stETH and Stakewise’s sETH2 tokens .
- These tokens are return-producing assets for investors who previously staked their ETH holdings and have the ability to be used elsewhere for additional returns in DeFi.
As a phrase of biblical origin clearly points out, “in the Lord’s vineyard there is everything”, it also happens in the digital assets market, since since they appeared on the public scene, little by little they have earned a place in the confidence of enthusiasts, which has generated that its options and services are expanding more and more.
In the same way, as the market changes, so do the institutions that work within it, since it is necessary to “renew or die” in this increasingly competitive world.
Thus, as the liquid betting industry heats up over possible ETH withdrawals that could be triggered in March with the arrival of the Shanghai update, new and varied solutions are emerging that aim to provide exposure to the diverse range of ETH tokens that are staked.
It is because of that Index Coop, a DeFi project that among the range of services it offers include a leveraged ETH token and a metaverse index, it decided to adapt to the new times and launch a new one on the market index Token, which will be composed of three liquid participation derivatives (LSD) different from Ether.
Index Coop Introduces Index for Diversified Liquid Ethereum Staking
Called 𝐃𝐢𝐯𝐞𝐫𝐬𝐢𝐟𝐢𝐝𝐝 𝐒𝐭𝐚𝐤𝐞𝐝 𝐄𝐓𝐇 𝐈𝐧𝐝𝐞𝐱 (dsETH), this product provides exposure to Rocket Pool rETH tokens, that will have the largest initial allocation with 43.9 percent, as well as with stETH of Lido (29.7 percent) and Stakewise’s sETH2 (26.4 percent). It’s three tokens in one, literally like an index.
It should be noted that these tokens are assets that produce returns for investors who previously staked their holdings of ETh, Besides that they have the facility of being used in other sites with the aim of obtaining additional returns in DeFi.
In addition, dsETH is designed to make it easy for users to spread their stake across a variety of protocols, which have the qualities of providing aggregate performance to mitigate volatility risk, announced Index.
In fact, they have an interesting popularity, since they have the facility to allow investors to stake less than the 32 ETH necessary to participate, if they wanted to stake directly on Ethereum.
Three tokens to balance the risk
The goal of having three versions of what could be said to be essentially the same thing is to balance risk, Index Coop growth and product leader Crews Enochs said.
“You want to be able to diversify your risk across the asset and protocol layers. My entire portfolio is subject to the same smart contract risk if I am only using the Lido protocol or the Rocket protocol“, he indicated.
In other words, maintaining the index is highly relevant as it would prevent someone from losing everything if one of those participation platforms were hacked.
“After that, exposure to all three LSD tokens would ensure that the overall return your staked ETH gets is much more consistent.”said Enochs.
Also, it is important to note that new LSD may be added to the index, giving more decentralized options more weight. According to Index Coop governance forumdecentralization can be measured by the number of node operators a specific solution has, as well as the distribution of ETH staked among those operators.
Interest grows in liquid participation protocols
It is striking that interest in liquid participation protocols such as these has grown in the crypto asset environment, above all, which has happened before the Ethereum Shanghai update is presented, next March.
This update will provide the possibility for ETH participants to extract their tokens, which are currently blocked in the network, thus attracting more users looking to stake their assets.
Therefore, the purpose of dsETH is to provide users with a way to obtain performance in the most prominent participation services, without the need to be fully exposed to a particular protocol.
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