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X Space Review丨Can KelpDAO’s new protocol revitalize the LRT track?

X Space Review丨Can KelpDAO’s new protocol revitalize the LRT track?

BlockBeatsBlockBeats2024/09/03 05:51
By:BlockBeats

KelpDAO recently launched "Gain Powered by Kelp" to increase users' earning potential through simplified access to multiple reward strategies, airdrops and points mechanisms.

As one of the leading projects in the liquidity staking track, KelpDAO continues to update and build. Recently, the protocol launched "Gain Powered by Kelp" to enhance users' profit potential through simplified access to multiple reward strategies, airdrops and points mechanisms.


On August 29, Rhythm invited KelpDAO's BD Lead to be a guest at Space to talk about whether KelpDAO's new protocol can re-drive the revival of the LRT track? What are the innovations of the new product "Gain Powered by Kelp". The following is a summary of the text of this Space.


X Space Review丨Can KelpDAO’s new protocol revitalize the LRT track? image 0


BlockBeats: Please give a brief introduction of yourself, your experience in the Crypto industry, and a brief introduction to the Kelp project?


TD:Hi everyone, I am TD, responsible for business development in the Asian market for KelpDAO. KelpDAO is a re-staking platform that supports Ethereum and various LSTs, such as Lido's stETH. The founders of KelpDAO, Amitej Gajjala and Dheeraj Borra, are also the founders of Stader Labs. After seeing the innovation of EigenLayer, they believed that the market not only needed a liquidity staking platform, but also a re-staking platform (LRT), so they created KelpDAO, the first liquidity re-staking platform.


In March this year, we raised a lot of funds, attracting many well-known Crypto VCs and angel investors, with a financing amount of about 10 million US dollars. At present, our TVL has also exceeded 9 billion US dollars, but because the price of Ethereum has fallen a lot, the TVL may not be so high now. We have about 5.05 million users, and our services are integrated on almost 100 platforms, including about 10 Layer 2 solutions. Overall, we are a very complete protocol. Through our platform, users can pledge assets and use these assets in other projects, such as loans or liquidity mining.


About my personal background, my first Crypto job was at an exchange in Southeast Asia. I was a product manager at the time. At that time, I was wondering what users could do with their tokens in addition to trading Bitcoin and Ethereum? After FTX’s incident, our exchange launched an on-chain staking service in Southeast Asia. I was optimistic about the liquidity staking market at the time, so I joined KelpDAO later.


BlockBeats: The overall Crypto market is not very ideal at present, and Bitcoin is fluctuating widely. How do you view the current market and what impact does it have on the restaking track?


TD: This will have a certain impact on the staking track. Once users buy Ethereum, they usually think about how to get returns, so liquidity restaking is very important. Through liquidity restaking, you can not only get returns on Ethereum, but also get more returns on other restaking platforms. If users want to pursue higher returns, they may choose a liquidity restaking platform.


If they are not optimistic about Ethereum, users do not want to keep ETH and may turn to buy other tokens such as Sui or Solana, which are indeed much more "friendly" than Ethereum. Generally speaking, we need to understand why the market sentiment towards Ethereum is particularly negative recently. On the one hand, it is the macroeconomic environment, and on the other hand, it is Ethereum itself. From a macro perspective, the most important thing is that the political and economic conditions in the United States have a significant impact on the market. Recently, the results of the US presidential election are still uncertain, leading to market instability. Some time ago, everyone was more certain about who the winner was, but now it is not clear. The market needs certainty to perform well. So I guess the market may not perform well until the results of the presidential election in November come out. Secondly, after the Bank of Japan raised interest rates, the price of the yen soared. It can be seen that many large funds like to borrow yen because the interest rate is very low. After the appreciation of the yen, the funds need to sell assets to cope with it, which puts pressure on the crypto market. At the same time, the German government is also constantly selling Bitcoin, so the market may not be stable. So now many people are selling Ethereum and holding cash.


On the positive side, recent US inflation data and employment reports show a slowdown in the economy, prompting the Federal Reserve to cut interest rates, which is good for the market and for the US and other countries' stock markets. BTC prices will also rise after the September rate cut. Recently, the trading volume of Bitcoin ETFs in the United States has hit a new high, which also shows that more and more people are beginning to be interested in encryption. There are many factors that make me think that the entire Crypto market will develop in a good direction in the future, including Ethereum.


Recently, Vitalik, the founder of the Square, also said that the foundation of Ethereum is very strong. If more large companies and institutions enter Crypto in the future, they will all develop projects such as RWA on Ethereum, so Ethereum's long-term performance will still be good.


BlockBeats: Can you briefly introduce the Gain powered by Kelp project? Who are the partners?


TD:9 months ago we launched rsETH, a product for Ethereum re-staking. Once users stake, they can get points from Eigenlayer and our platform. But at that time we were thinking about how to provide users with higher returns and how to give users higher points. We noticed that many popular L2s have recently started to launch their own points systems. So we thought that if users can bring their assets (such as rsETH) to different L2s, such as Scroll, Mode or Linea, they may get higher returns. Users can participate in different DeFi projects on Layer2, such as loan projects or liquidity mining, etc., to double their returns.


Compared with other re-staking platforms, we were the first to launch native integration. Users do not need to use a cross-chain bridge, and can directly stake Ethereum on L2, which is very popular, especially after staking on Scroll or Base or Mode, they can get more points on different protocols. So we were thinking, if users like these Layer2s so much, we should launch a simple product, so we launched Gain by Kelp, which is actually a smart contract, or a vault. Users only need to stake ETH, and there will be a strategy manager who is good at managing large amounts of money. These strategy managers help users allocate assets on different L2s, some assets on high-risk protocols, and some on low-risk protocols to achieve higher returns.


After staking through Gain powered by Kelp, users can get points for more than 6 different projects. You can complete the pledge with just one click and one gas fee, without going through a cross-chain bridge, and without operating funds in different protocols.


Our product exceeded $100 million in TVL within six or seven days of its launch. Recently, we also integrated with Pendle, and users will get a token called agETH after staking. Users can use agETH for leveraged transactions in Pendle, such as YT trading. If you want to be conservative and just get annualized returns, you can use PT. If you want to get points on LP, you can also put agETH into the liquidity pool. At present, our L2 partners are Scroll and Linear, and our staking partners are EigenLayer and Karak. We will also work with Layer Zero and Cross to develop a cross-chain bridge.


BlockBeats: How do ordinary users need to participate in the Gain protocol?


TD:We have designed a very simple process. Go to the official website and press the "Restake" button to stake directly on it. Staking is mainly done on the mainnet, whether it is Ethereum or Lido's stETH can be staked. After completing the pledge, you will receive a liquidity token called agETH. The agETH token can be used on Pendle or other DeFi protocols. You can also choose to keep agETH in your wallet without doing anything else. In fact, our product simplifies the operation process. Gas Fee only needs to be paid once, and our points score is higher than that of general platforms. Therefore, users have many advantages in staking with us, and other protocols may not give such high points.


Our product goal is mainly to simplify, so that new users can easily get more benefits and more airdrops. If you follow us on Twitter or Discord, we will continue to support more DeFi protocols. Currently, there are only three or four protocols that can use agETH, but we will continue to expand our partners to give agETH more usage scenarios.


BlockBeats: Compared with other DeFi aggregation protocols, what are the advantages and characteristics of Gain powered by Kelp?


TD:Some different aggregation protocols may give you a good APY, which may be an annualized return that can be obtained in real time. Our team believes that there will be a bull market in November or December, and we hope to make a good product in the bull market. Generally speaking, Layer2 or Layer1 has lower risks but high returns. We think that if you only use an ordinary aggregation protocol, they can only give you a relatively good APY, which is not ideal. On the contrary, we recommend collecting more L2 points, and the return rate may be very high.


Especially for users who are not good at using cross-chain bridges and managing different wallets, our platform can simplify the entire operation process. This is one of the advantages of KelpDAO in the market. We have been integrating L2 before. If users want a higher rate of return, they can consider our product. Of course, if you only want a fixed 8% or 10% APY, this product may not be suitable for you. So everyone think about your return expectations. Our internal budget estimates the return rate to be about 50%-60%, and if the bull market is strong, the return rate may be higher.


Our advantages are high return rate, gas saving and low risk. You only need to make one transaction on the mainnet, and we also provide professional strategy managers to manage your portfolio, so the risk is reduced a lot. We believe that agETH can bring more income opportunities, such as participating in loan projects such as Pendle and liquidity mining, which will bring higher APY to users. Overall, our returns are higher, risks are lower, and user experience is simpler.


BlockBeats: What factors will be considered in the calculation of KelpDAO's internal rate of return?


TD: Our calculation mechanism is relatively simple, and there is no complicated setting. For example, Scroll and Linear are more like zkSync, and they have only recently launched TGE, so we will also refer to zkSync's FDV in the algorithm for predicting the rate of return. At the time of TGE, zkSync's FDV was about $300 million. When the user data and TVL are similar, the return rates of Linea and Scroll can also refer to zkSync, but Linea and Scroll are more popular in the market than zkSync. According to the return rate of zkSync, the combined return rate of these two Layer2s has exceeded 30%.


Karak Network and EigenLayer are a bit difficult to predict. For a while, the community was highly optimistic about EigenLayer FDV and predicted a very high FDV, but now the market may think that too many people have Eigenlayer tokens. Let's take the Pendle model as an example. For LRTs such as Renzo and Ether.fi, according to their PT, the highest return rate is 9%, so 9%+30% is already 39%. If we include the points income from other infrastructure providers, the return rate is about 10%, and the total return rate is about 50%. So we make a budget based on existing market data and information.


BlockBeats: "Strategy manager" is quite interesting. Will the management strategy be made public later?


TD: Gain powered by Kelp is essentially a Vault project. The task of the strategy manager at the beginning is relatively simple. He is mainly responsible for determining the income strategy contained in the smart contract and allocating Vault deposits among these strategies. In contrast, some strategies on the mobile terminal are much more complicated. Next, we will consider some more complex DeFi strategies, but the potential returns are also higher and come with different APYs. For these complex strategies, we will disclose how we manage these capital positions. At present, our strategy managers rebalance these different capital positions every day. In the future, when the product becomes more and more complex, if users are more interested, we can disclose these materials to make users trust us more.


BlockBeats: KelpDAO also launched agETH, a LRT. What benefits will users get from holding agETH?


TD: Our agETH was originally a very simple Vault. agETH is just the first step for us. Through agETH, you can get L2 points. After that, these L2 points can be used for leverage operations on Pendle or for different lending projects. In addition, we have also launched liquidity mining, where users can get higher returns. We are also considering launching products like Pendle, which allow users to leverage operations.


Our rsETH already has more than 100 DeFi integrations, and the team is very familiar with the entire ecosystem. We are thinking about how to bring more value to agETH. In the next few weeks, you can follow our official website or Twitter, and there will be many new updates. We are also considering putting agETH on L2, so you can get double points on L2. If you put agETH on Linea, you will get more Linea points.


BlockBeats: The market has not been very optimistic about Ethereum and the Ethereum ecosystem in recent times. Many people are criticizing ETH's value capture and the fact that the Ethereum ecosystem is far less innovative than a few years ago. What do you think?


TD:This is actually a very good question. If you participated in DeFi Summer in 2017 or 2022, or DeFi 2.0 or 3.0 projects, if you said that your project had a 100% APY at that time, others might still think that your income was too low. At that time, there were indeed many special projects that made you feel that 100% APY looked normal. However, if you think about traditional finance, such as banks or other financial products, 20% of the income is already very high, let alone 100%.


Now it seems that the mechanisms and innovations behind those products were not stable, so after a while, many DeFis have disappeared. Those projects that can really bring you stable and reliable returns are still alive after operating for several years, and users continue to use them. So everyone should have reasonable expectations for the rate of return, and a 100% rate of return may be unrealistic in the future. But airdrops are an exception. If you get an airdrop of a token, and the token rises three times, four times, or five times, then your return may reach 100%. I remember that after Ether.fi issued the token, if you sold the token in time, the return rate was about 30% to 40%, and Ether.fi did very well. At that time, the overall market environment was still optimistic, and everyone was generally optimistic about the future, so the rate of return was indeed good.


Now, if the yield on a DeFi project exceeds 20%, I would suggest that you consider where the yield behind it comes from. Understand the source of income before deciding whether to participate in the project. If you can take a long-term view and hold some during the L1 or L2 token TGE, the return may be good in the long run.


Regarding the lower yield of Ethereum, everyone will think that there is a problem with Ethereum and that Ethereum is not a good chain. In fact, it is quite the opposite. I think Ethereum itself has a very good foundation and stable and reliable performance. It has also experienced many major upgrades in the past, and there have been no major problems. The overall performance is very good. I think we need infrastructure like Ethereum to attract big users, big banks and big funds to enter the market. If you have been paying attention to some projects recently, such as Ondo Finance, their team is basically from BlackRock, so they are very optimistic about Ethereum. They choose to do projects on Ethereum very purely, rather than Solana or other chains, because they know that Ethereum's performance is very good. So I think there will be more reliable income opportunities in the future, and there will not be any big fluctuations.


Of course, we will not return to the high returns of 100% or 1000% in the previous DeFi Summer. In the long run, Ethereum has a lot of room for development. I am very optimistic about Ethereum's infrastructure and ecosystem. There will be more use cases and users in the future. As demand increases, the price will naturally rise.


BlockBeats: Is there anything on the roadmap of KelpDAO that deserves attention from users and the market in the future?


TD: Our new product "Gain powered by Kelp" is a very big breakthrough. I hope users can recognize the value of this product and the benefits behind it. This is just our first product, and we plan to launch more products next. We are considering strategies to build DeFi on Layer2, and these strategies are also being planned. Simplify the user operation process and obtain benefits efficiently. We have recently been working with the BNB Chain team and plan to make some innovations, such as launching a staking platform on BNB Chain, not just a liquidity staking platform. Our cooperation has already begun, and we are planning the specific route.


If you have BNB, remember to stake your BNB on our platform. Early users will get rich rewards. If you stake, the points and tokens you currently get are unified, there will not be two different tokens, and there may be a new name. We are also signing a contract with a well-known large investor. Once the news is announced, everyone can see the news on the BlockBeats official website. It is not convenient to disclose the specific news at present.


BlockBeats: Does the launch of the airdrop plan indicate that TGE is approaching? What does this mean for the future of Kelp DAO?


TD: TGE is indeed approaching. I just revealed that we have a new investor and the roadmap has been adjusted. We are also working with BNB to launch new products recently. Our goal is to let everyone feel the innovation and hard work behind us. If you don’t have enough points before, we will give you some time to accumulate points. Although the first season of activities will end soon, there will be a second and third season. I am very optimistic about the development of tokens after TGE. Our tokens are not only valuable, but more importantly, they can bring truly innovative products to users, so the value of the tokens will naturally increase.


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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