What is LST-fi?
LST-fi refers to strategies that use liquid staking tokens (stETH, rETH, cbETH) in DeFi to compound staking yields with additional returns. Since LSTs already earn staking rewards, using them in DeFi allows you to stack multiple yield sources.
Strategy Types
1. LST Lending
Supply stETH to Aave, earn lending yield on top of staking yield.
2. LST/ETH LP
Provide liquidity in stETH/ETH pools for trading fees with minimal IL.
3. LST Looping
Deposit stETH, borrow ETH, stake for more stETH, repeat.
4. Pendle PT/YT
Lock in fixed yields or speculate on staking rate changes.
Example Stack
- Base: 3.5% ETH staking (via stETH)
- Lending: +1% from Aave supply
- Total: ~4.5% APY with liquidity
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