๐ก On LSTfi, LRTfi, and scaling DeFi with yield-bearing assets:
An observation that Poolside makes is the importance of AMMs to greater DeFi. AMMs facilitate permissionless trading and are integral for truly permissionless markets.
Issuers of yield-bearing tokens like LST protocols rely on liquidity inside AMMs to facilitate financial activity. Without the liquidity inside AMMs, it would be difficult for auctions, liquidations, and flash loans to occur.
Without these things, issuers of yield-bearing tokens wonโt be able to see their assets used in DeFi as collateral for lending or stablecoins.
The current problem is that most AMMs aren't designed for yield-bearing tokens. That is why you see so many wrapped versions of LSTs. Poolside is built to handle these assets, protect yield that belongs to LPs, and ultimately scale DeFi.
It's good to be early to this pool party ๐