In-depth study of Lista DAO: Unleashing the potential of LSDFi and CDP protocols

Original | Odaily Planet Daily ( @OdailyChina )

Author: Golem ( @web3_golem )

From the emergence of Uniswap, which played the melody of DeFi, to the crazy mining wave of Compound in DeFi Summer in 2020, to Pendle borrowing the discount mechanism of traditional finance, introducing the early realization of future income into the DeFi world, and further releasing asset liquidity. The DeFi world will have innovative mechanisms that are combined with the market stage from time to time, attracting a number of products to follow suit (or copycat).

The development of Pendle is due to the explosive growth of LSD. Based on the improvement of fund utilization efficiency alone, the market demand for lending protocols with LST as collateral will inevitably continue to expand, especially in the field of stablecoins.

Lista DAO, which Odaily Planet Daily has recently paid attention to, was born based on such a demand. Following Binance Megadrop, Lista DAO has also entered a new stage. This article will explore from the perspective of CDP protocol how Lista DAO can release asset liquidity and make the income higher and more stable from stablecoins to liquidity mining and then to compound income products.

CDP Protocol Overview

CDP stands for Collateralized Debt Position, which is a lending mechanism in DeFi that allows users to borrow stablecoins or other cryptocurrencies by pledging crypto assets.

In 2023, with the development of liquidity pledge and re-pledge tracks, the LSDFi protocol has become a hot spot in the market. This has made the CDP system richer, and protocols have begun to allow users to use LST assets as collateral to generate stablecoins, further improving the capital utilization efficiency of the CDP system. Lista DAO is one of them.

What are the common problems with mainstream CDP protocols?

Although DeFi and stablecoins have gone through decades of development, the stablecoin impossible trinity problem is still a dark cloud hanging over the DeFi industry, that is, price stability, decentralization and capital efficiency cannot be achieved at the same time.

For example, MakerDAO (now renamed Sky) is the pioneer of CDP and has an absolute leading position in CDP. However, in order to ensure the stability of DAI, the protocol allows the use of centralized stablecoins such as USDC to generate DAI, which sacrifices the decentralization of the token to a certain extent.

LUSD, issued by Liquity, is a stablecoin with ETH as the only collateral, ranking third in the CDP protocol. Although LUSD guarantees decentralization and the minimum collateral ratio is 110%, users usually take the initiative to increase the collateral ratio to avoid redemption. According to Dune data, the collateral ratio of LUSD has remained above 250% for a long time and has recently risen to 460%, which means that for every LUSD in circulation, there must be ETH collateral worth $4.6. Such a high collateral ratio seriously reduces the capital efficiency of LUSD.

USDe, launched by Ethena Labs, is a popular stablecoin this year and has become the fifth largest stablecoin by market value. Although USDe has achieved 100% capital efficiency and good decentralization through innovative yield strategies, its over-reliance on the upward market has made its price stability worrying. USDe has undergone several stress tests this year, and the supply of USDe has continued to decrease since July and has now fallen below 2.5 billion.

CDP protocol combined with LSDFi has become a trend

In order to solve the above problems, the CDP protocol combined with LSDFi to issue stablecoins has become a new solution. For example, Sky increased the share of stETH collateral to replace USDC; Liquity v2 will support LST as collateral in order to release liquidity potential; Ethena Labs chose stETH as its main position from the beginning... But their solutions are either still in their infancy (such as Sky and Liquity v2), or, like USDe, have not completely solved the problem.

So, is there a perfect CDP protocol in the market that combines the advantages of liquidity pledge? The answer is Lista DAO, which will be introduced next.

Lista DAO Overview and Advantages

Below we will briefly introduce Lista DAOs business, and then analyze its development advantages compared to the current mainstream CDP protocol.

Protocol Introduction

Lista DAO, formerly known as Helio Protocol, was created in 2022, when the project issued the overcollateralized stablecoin HAY. In July 2023, Helio merged with liquidity staking provider Synclub to form the new LSDFi Foundation, which was renamed Lista DAO.

Lista DAO is an LSDFi project that combines liquidity pledge and CDP system, running on the BNB chain. Users can pledge BNB to obtain liquidity pledge certificate slisBNB and earn POS income, and can also borrow stablecoin lisUSD by over-collateralizing classic decentralized collateral such as ETH, BNB and collateral such as slisBNB, wstETH and solvBTC.

As of now, Lista DAOs total TVL is as high as 420 million US dollars, ranking fourth in the BSC chain. Among them, the value of collateral exceeds 187 million US dollars, and the value of liquid pledged assets is about 233 million US dollars.

Advantage 1: Multiple measures to improve BNB asset efficiency and returns

• DeFi BNB: Gaining both on-chain staking and new issuance income

As a protocol that issues stablecoins through the CDP system, Lista DAO naturally faces the impossible trinity problem of stablecoins. ListaDAOs innovative solution is that it not only allows users to fully increase their capital utilization through CDP, but also combines liquidity pledge and additional liquidity of liquidity providers (LP) on DEX through DeFi BNB to improve the overall capital efficiency of the system.

slisBNB is the liquidity staking certificate of the Lista DAO platform, which naturally contains the income of node staking. Users can participate in new issuance while enjoying the income of slisBNB. It is far more liquid and profitable than putting BNB in regular financial management of CEX.

This method allows users to obtain on-chain liquidity while enjoying the benefits of centralized new issuance. There is no need to perform cumbersome BNB deposit/withdrawal operations to achieve multiple income goals. This not only improves capital efficiency, reduces processes and saves time, but also reduces costs by reducing losses.

In order to motivate users, Lista DAO also provides high point rewards for DeFi BNB, which can receive airdrops in the future, forming a three-mining system and accelerating the popularization of the product.

• BNB.xyz: Optimizing BNB Utility for CeFi and DeFi

At the same time, in order to further improve the capital utility and returns of users BNB, Lista DAO participated in the construction of BNB.xyz, a one-stop on-chain staking platform designed specifically for CeFi BNB and DeFi BNB users. The core contributors of the platform also include PancakeSwap and BNB Chain.

BNB.xyz was launched on September 3. As a one-stop staking center, it not only simplifies the path and operation process for users to search and compare the best staking solutions in the BNB ecosystem, but also provides innovative staking solutions to optimize the utility of CeFi BNB and DeFi BNB, bringing the most direct and valuable income to all BNB users.

BNB.xyz is still in its early stages of development. In the future, BNB.xyz will also cooperate with broader ecosystem platforms (such as binance.com or Binance Web 3 wallet) to explore more staking solutions and options for BNB users to maximize asset efficiency and profits.

• clisBNB: Taking into account BNB lending and new issuance rights

In order to further improve the efficiency of BNB assets and expand user benefits, Lista DAO recently launched a product that allows users to simultaneously conduct mortgage lending and new on-chain issuance - clisBNB. When users use BNB to over-collateralize and borrow stablecoin lisUSD, they will also receive a loan quota from clisBNB.

Although clisBNB and Lista DAO platforms liquidity pledge certificate slisBNB are only one letter apart, there are also major differences. clisBNB and BNB are 1:1 equal in value, but can only be used to participate in new issuances, and cannot be traded or transferred. When lisUSD is repaid and BNB is withdrawn, clisBNB will also be automatically destroyed.

Therefore, clisBNB is actually an affiliate product generated by lending lisUSD, with the aim of further releasing the liquidity of BNB for users, so that they can obtain new issuance income while participating in lending.

However, in addition to Launchpool income, clisBNBs income also includes lisUSD income (LP pool 10% ~ 15%; you can also do chain loans, with income exceeding 30%), Lista airdrop rewards, Lista token emission rewards, etc.

Advantage 2: LSDFi + CDP integrated development

slisBNB is the native income and liquid staking token of BNB built by ListaDAO. It is also the key asset of LSDFi in ListaDAO. Currently, the number of BNB staked in slisBNB has exceeded 413,000. slisBNB has the following three benefits:

• The appreciation of slisBNB against BNB is consistent with BNB’s APY. Users can passively obtain BNB staking rewards by staking BNB liquidity into slisBNB;

• Earn extra LP income on DeFi platforms. Users can provide liquidity for slisBNB in liquidity pools such as PancakeSwap and Thena Finance to earn transaction and LP fees;

• Get Binance Launchpool rewards. On August 13, Lista DAO officially announced that slisBNB will support the reward calculation in Binance Launchpool. Users only need to hold slisBNB in their Web3 MPC wallet to qualify. slisBNB is currently the only LST that can be used to buy new LST in Binance Launchpool.

In addition to the above three benefits, Lista DAO also supports over-collateralization of slisBNB to borrow stablecoin lisUSD, with a minimum collateral ratio of 150%, which enables users to retain liquidity pledge income exposure while minting stablecoins through CDP to achieve leverage and maximize BNBs capital efficiency. Of course, the liquidity of the stablecoin lisUSD is also crucial in this process. Lista DAO also supports the use of lisUSD for pledge mining.

By integrating LSDFi + CDP system, slisBNB can not only bring users multiple income models, but also increase the exposure to risky assets again and leverage user assets through the CDP system.

According to official documents, slisBNB will be integrated with the universal staking layer Karak in the future to enable it to gain the ability to re-stake. This feature will not only expand the practicality of slisBNB, but will also release slisBNB liquidity and more LSDFi gameplay.

Advantage 3: Unlocking token and governance potential using the veToken model

• Governance tokens are lucrative

The veToken model was originally launched by Curve Finance to promote token holders participation in protocol governance and development through incentives, so that their interests are always aligned with the long-term success of the protocol. In this model, users can lock their protocol tokens for a period of time and receive veTokens, during which they can use veTokens to obtain governance rights and various rewards. The longer the lock-up period, the more veTokens they receive, which means greater voting power and higher rewards.

LISTA is the protocol token of Lista DAO, which conducted TGE on June 20 this year. Users can currently lock it and mint veLISTA.

veLISTA can only be obtained through casting and cannot be transferred. The maximum lock-up period is 52 weeks. The lock-up reward is the same as the number of lock-up weeks. For example, if 1 LISTA is locked for 52 weeks, 52 veLISTA can be obtained. If the users lock-up period is less than 52 weeks, the period can be extended to 52 weeks. At the same time, the user can also retrieve LISTA before the end of the lock-up period, but an early unlocking fee must be paid. The formula is early unlocking fee = (total locked amount * unlocking weeks)/52.

To incentivize users to lock, veLISTA holders can also receive a portion of the LISTA protocol revenue, which mainly comes from veLISTA early unlocking fees, lisUSD lending fees, ETH withdrawal fees, LST rewards and operating commission fees. veLISTA holders will receive these rewards in the form of LISTA, WBETH, slisBNB, BNB and lisUSD tokens.

• DAO Governance Improvement

In terms of governance, since the concept of DAO was born in 2020, countless DAOs have emerged in the DeFi field (such as Uniswap and Aave), but most of them are imperfect and vague in terms of voting, dividends, token repurchases, etc.

Lista DAO also plans to transform into a decentralized autonomous organization, gradually handing over governance rights to veLISTA holders. However, unlike most previous DeFI DAO organizations, Lista DAO strives to make DAO governance perfect and transparent from the beginning:

• After the token is released, DAO governance will be started immediately. All core parameters need to be proposed and voted by the community, and power will be delegated as much as possible.

• The dividend mechanism was launched on the first day. Except for the necessary costs, all the profits were distributed to the community.

• The auto-compound function was launched, allowing users to increase their profits in a simple click.

veLISTA holders have voting rights in the Lista governance system, which includes modifying rates (withdrawal fees, veLISTA early unlocking fees), adding or removing collateral, increasing and decreasing collateral ratios and collateral debt ceilings, and veLISTA holders’ protocol fee dividend ratios. However, currently only the Lista DAO core team can submit proposals.

Locking LISTA not only binds the interests of token holders to Lista DAO, thereby reducing the selling pressure of LISTA in the secondary market, but also granting the community voting rights in governance can enable token holders to protect their own interests to a certain extent.

The circulating supply of LISTA tokens is 181 million, and the current number of locked LISTA tokens is 53.73 million, with a lock-up rate of 14%.

Advantage 4: Leading Token Model

In addition to the above innovations and advantages, Lista DAO is also very advanced in the circulation of tokens, with the characteristics of low market value and high circulation, and has good potential.

• Circulation Analysis

Lista DAOs native token LISTA is a BEP-20 token with a total supply of 1,000,000,000. The specific distribution is as follows:

• Binance Megadrop: 100,000,000 LISTA, 10% of the total supply;

• Airdrop: 100,000,000 LISTA, 10% of the total supply;

• Investors and Advisors: 190,000,000 LISTA, 19% of the total supply;

• Team: 35,000,000 LISTA, 3.5% of the total supply;

• Community: 400,000,000 LISTA, 40% of the total supply;

• DAO Treasury: 80,000,000 LISTA, 8% of total supply;

• Ecosystem: 95,000,000 LISTA, 9.5% of total supply.

On June 20, the day LISTA was released, the initial token circulation was 230,000,000 (23% of the total tokens). The unlocking status is as follows:

• All 10% of the LISTA token supply allocated for the Binance Megadrop has been unlocked;

• 8.5% of the total LISTA token supply allocated for the airdrop of 10% was unlocked;

• 3.5% of the total LISTA token supply of 9.5% allocated for ecosystem development was unlocked;

• 1% of the total LISTA token supply of 19% allocated to investors and advisors was unlocked.

Most of LISTA tokens are allocated to the community (40%) and ecological development (9.5%), while the proportion of tokens held by project owners and investors is relatively low, at 3.5% and 19% respectively. This allocation method shows the importance of the project owner to the community, helps avoid the risk of a single entity holding too many tokens, and reduces the possibility of market manipulation.

• Unlock Analysis

According to the official documentation, in addition to the initial unlock on the day of release, the unlocking schedule for LISTA is as follows:

• The remaining 15% of the airdrop, or 1.5% of the total LISTA token supply, was unlocked at the end of September;

• The remaining 18% for investors and advisors will be locked up for one year until June 2025. From June 2025, this portion will be unlocked linearly every quarter for the next two years until March 2027;

• The token supply allocated to the Lista DAO team (3.50%) will be locked for 1 year until June 2025, with the first unlock occurring in June 2025. From June 2025, the 3.50% token supply allocated to the Lista DAO team will vest and unlock linearly every quarter (3 months) for the next 5 years until March 2029;

• The community-incentivized LISTA token will be launched in July, and the unlocking will continue at a decreasing rate of 1/√2 per year for 20 years until June 2044. As Lista DAO is still in a transition phase, the current unlocking is set at 312,500 LISTA per week, which is lower than the expected unlocking of 9,772,651 LISTA per month;

• The token supply allocated to the Lista DAO Treasury (8.00%) will be locked for 3 months until September 2024, with the first unlock occurring in September 2024. From September 2024, the 8% token supply allocated to the Lista DAO Treasury will vest and unlock linearly every quarter (3 months) for the next 4 years (until June 2028);

• The remaining 6% of the token supply allocated to the ecosystem will be unlocked quarterly (3 months) over the next 5 years until June 2029.

LISTAs unlocking plan is designed to be relatively robust. Only 23% of the tokens will be unlocked on the day of launch, and most of the remaining tokens will be unlocked gradually over time. This long-term unlocking arrangement can prevent the risk of short-term large-scale sell-offs in the market and help maintain the stability of token prices.

At the same time, there are dedicated token allocations for the development of the Lista DAO treasury and ecosystem, and the unlocking of these tokens is relatively slow, ensuring that funds can be used for project development and community building in the long term.

In summary, Lista DAOs token model design is leading and reasonable. Through a strict unlocking plan and community-oriented distribution model, it reduces the risk of large-scale token sales by project parties and VCs, and enhances investors confidence in the long-term development of the project. Therefore, this makes LISTA an investment target with good potential.

Summarize

This article first briefly explains the concept of CDP protocol, and as the liquidity pledge and re-pledge track continues to expand, the market demand for lending protocols with LST as collateral is also expanding. In order to solve the impossible triangle problem of stablecoins, mainstream CDP protocols are making innovations to varying degrees, using LST as collateral CDP to generate stablecoins in order to improve capital efficiency, but the current solution is not perfect.

Then, we introduced Lista DAO, a relatively ideal CDP protocol that combines LSD and currently runs on BNB and Ethereum. Lista DAO not only improves the capital efficiency of stablecoins, but also provides a rich income model and leverage options for the LSD token slisBNB. Combined with the rewards and governance rights granted to users by LISTA and veLISTA tokens, as well as the leading token model, it is believed that it will have strong growth potential in the future.