Delving into the LSP Protocol An Optimal Strategy for Establishing a Secure Barrier for PoS Networks

Staking serves as the primary method to uphold the security of a Proof of Stake (PoS) network. The more dispersed assets participate in validator staking within the network, the stronger the network’s security becomes. Typically, PoS networks offer incentives to validators to encourage their participation in staking and verification, both as a reward for their contributions and to attract more validators.


In reality, it is impractical for token holders to independently engage in network validator staking in any PoS network. This is due to the high costs involved. For instance, the minimum threshold for Ethereum’s PoS validator is 32 ETH, amounting to approximately $121,600 at ETH’s price of $3,800. With an Annual Percentage Rate (APR) of only 2.21%, the capital utilization rate is minimal. Additionally, stakers must possess the ability to run the client independently to avoid penalties. Consequently, it is unfeasible for non-professional token holders to partake directly in network staking as validators.
The emergence of the Liquidity Derivative Pledge (LSD) track addresses these challenges. Through the LSD protocol, token holders can pledge assets without the need for a large capital scale. The protocol then undertakes the PoS network pledge on behalf of the pledger, returning a portion of the income to them. Additionally, the protocol issues an LST token to the pledger, equivalent to the value of the pledged assets, allowing for additional income in LSTFi to enhance fund utilization. This mechanism boosts the pledge rate of PoS networks significantly.
While Ethereum dominates the LSD sector, other ecosystems have limited involvement. Networks like Cosmos and BNB Chain exhibit smaller scales in LSD, with low liquidity staking sources. Leading LSD protocols, including Lido, Rocket, and Binance Staked, possess a substantial market share in the ETH LSD market, raising concerns about centralization and reduced income for the sector. The concentration of funds in a few protocols also poses security risks to PoS ecosystems.
In addition to LSD, the Liquidity Re-Staking Track (LRT) centered around EigenLayer, known as the LRT track, is primarily focused on the Ethereum ecosystem. LRT protocols, such as Kyper DAO and Renzo, provide staking services using LST and ETH assets, lacking support for native tokens of other chains. EigenLayer’s incentive mechanism may conflict with existing PoS incentives, potentially compromising network security by centralizing control.
Overall, LSD and LRT may not be the most effective solutions for enhancing PoS ecosystem security:
● The monopolization and centralization of the LSD sector hinder the growth of pledged income, jeopardizing PoS network security.
● The multi-layer nesting model of LSD and LRT poses risks, especially with leading LSD protocols dominating in scale. A security breach could have catastrophic consequences for the Ethereum ecosystem, as seen in the Terra ecosystem.
● Limited infrastructure in non-Ethereum ecosystems impedes the expansion of staking scales, inhibiting capital utilization.
● The lack of support for other PoS ecosystems restricts the adoption of liquidity pledge and re-staking, exacerbating the issue of low fund utilization.
However, the recently introduced LSP protocol offers a promising solution. Leveraging Node Slicing and OmniVerify Chain solutions, the LSP protocol enhances asset rights and node income rights liquidity, improving PoS network security and promoting system balance.


The LSP protocol introduces a new PoS liquidity derivative pledge solution, utilizing Node Slicing as a core processing method. PoS asset holders can pledge assets directly through the LSP protocol, which then pledges funds to various PoS networks via OmniVerify Chain, slicing and distributing the assets to include user asset rights and node income rights.
Unlike LSD, the LSP protocol returns sliced assets as assets representing equity rights and node income rights, enhancing user participation in PoS network verification and income generation. The sliced assets can be traded on the LSP trading platform and integrated into various protocols, offering enhanced flexibility and income potential.
Enhancing PoS staking scale and decentralization is crucial for network security. The LSP protocol facilitates fund management for large users, node verifiers, and mining pools, ensuring secure and reliable network operations. By enabling easy asset exchanges and reducing asset transfer pressures, the LSP protocol streamlines participation in node staking, fostering network security.
Moreover, the LSP protocol’s sharding scheme mitigates security threats posed by large stakers, attracting decentralized users to engage in staking activities. By offering a user-friendly approach to node staking, the LSP protocol lowers entry barriers for new users, bolstering public chain ecosystem participation and security.
Adaptable to multiple PoS networks, the LSP protocol caters to various ecosystems, ensuring broad compatibility and support for different networks. By collaborating with OmniVerify Chain, the LSP protocol guarantees asset security and data consistency, offering a secure and efficient platform for node assets.


Composable and programmable, the LSP protocol enhances PoS network verification capabilities while supporting the development of complex protocols and applications. By integrating various networks and offering programmable assets, the LSP protocol expands the ecosystem’s composability and asset utilization, ensuring efficient and secure operations.
The LSP protocol’s comprehensive approach offers significant potential for the development of the PoS ecosystem, surpassing the limitations of existing solutions like LSD and LRT. With its adaptability, programmability, and market potential, the LSP protocol is poised to revolutionize PoS network security and promote system balance, returning PoS to its original intent.
Official Website:
https://lsp-2.gitbook.io/lsp
Disclaimer: The information provided in this press release is not an investment solicitation or advice. It is recommended to conduct thorough due diligence and consult with a professional financial advisor before investing in cryptocurrencies and securities.