LiquidLayer's LSD Bridge (Loading...)

Bridge and earn.

The LiquidLayer's LSD (Liquid Staking Derivative) Bridge is an innovative mechanism designed to seamlessly transition assets between Ethereum and the LiquidLayer blockchain. More than a mere bridge, the LSD integration transforms the concept of bridging assets into a yield-generating opportunity.

Bridging to LiquidLayer Chain

Supported Assets: Users can bridge a variety of assets from Ethereum to LiquidLayer, including but not limited to ETH, USDC, USDT, DAI, and FRAX.

Token Minting: Once assets are bridged, they are represented on the LiquidLayer chain by a corresponding amount of newly minted tokens, ensuring a seamless asset representation across both networks.

Contract and Allocation: 90% of the bridged assets get allocated to a dedicated smart contract on Ethereum. They are systematically allocated based on pre-defined parameters to various yield-generating protocols. The remaining 10% is kept within the bridge, acting as a buffer to facilitate immediate bridge-back requests.

Fees: A nominal fee of 0.02% is levied for bridging assets to the LiquidLayer chain. These fees flow into the yield distribution contract, ensuring the sustainability of the process by covering transaction costs.

Bridging Back to Ethereum

Standard Epoch Bridge-Back: Users wishing to revert their assets back to the Ethereum network but willing to wait until the next epoch are subject to a 0.05% fee.

Instant Bridge-Back: For those seeking immediate asset release, a fee of 0.1% is applicable.

Fee Distribution: The accumulated fees are judiciously allocated. 60% gets distributed among the holders of bridged assets and the $LILA tokens, while the remaining 40% funds protocol development, audits, and necessary updates.

Asset Release: Based on user preference, assets are either instantaneously released (incurs a higher fee) or scheduled for release at the beginning of a new epoch (for a reduced fee).

Yield Generation

Revenue Generation: The primary allure of the LSD Bridge is its ability to generate yield. Assets are staked in a diversified range of vaults and stable pools such as Lido, Frax, RocketPool, and Aave. They are then integrated into liquidity provision platforms aimed at optimizing yield while retaining asset liquidity.

Harvesting: At the end of each epoch, the yield accrued from the staked assets is harvested.

Distribution Method: Simplifying the process for users, yields are auto-transferred to users' Ethereum network wallets in the form of USDC.

Distribution Allocation: A substantial 90% of the yield is channeled back to the holders of bridged tokens and $LILA tokens on the LiquidLayer chain. The remaining 10% fortifies an insurance fund, acting as a protective layer against unforeseen financial setbacks.

Bridge-Back Fees as Revenue: The fees stemming from bridge-back activities, both the 0.05% from the post-epoch and 0.1% from instant bridge-backs, supplement the yield. The strategic split for these fees remains at 60% for holders and 40% for developmental endeavors.

Impermanent Loss Mitigation: In a bid to shield users from potential losses, assets are meticulously spread across multiple vaults and liquidity pools. This strategy not only amplifies returns but also ensures zero impermanent loss.

The Epoch System

10% Liquidity Reserve: An essential feature of the bridge contract is the 10% liquidity reserve. This reserve is pivotal in ensuring both the liquidity and the flexibility of the system.

Harvest Timing: The epoch system is inherently synchronized with the harvest timing of the yield-generating protocols LiquidLayer interacts with. This time-frame can vary, as both the vaults and yield protocols are susceptible to modifications through community governance.

Liquidity Adjustment: If, for some reason, the liquidity in the bridge contract dips below the requisite 10% reserve, the deficit is rectified by liberating funds from the vaults during the subsequent epoch.

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In essence, the LSD Bridge is a testament to LiquidLayer's commitment to innovation, offering users not just a bridge but an opportunity for growth and yield, underpinned by a system that prizes flexibility, security, and user interest.