Isolated
Isolated Liquid Restaking (iLRTs) empowers users to take control of their assets by offering a tailored, asset-specific approach to restaking. This feature allows users to deposit individual assets into dedicated vaults, where each asset is managed independently. By isolating risks and optimizing yield opportunities, iLRTs provide a transparent, secure, and high-performance solution for those seeking precision in DeFi.
Functionality
Isolated Liquid Restaking operates on a foundational principle of risk isolation and targeted management:
Dedicated Vault Instances:
Every supported asset is paired with its own unique vault, enabling a specialized management approach tailored to the token's individual market dynamics and restaking potential. In practice, this means that every asset restaked is reflected in a 1:1 pairing to the corresponding LRT. This ensures that assets remain insulated from risks associated with other tokens.
2. Restaking with Individual Risk:
When users deposit an asset into a vault, it is restaked through a specific protocol, earning rewards and participating in DeFi opportunities without cross-asset risk. This approach maintains a direct link between performance and reward.
Issuance of Isolated LRTs (iLRTs):
Upon depositing an asset into a vault, users receive an Isolated Liquid Restaking Token (iLRT) in return. This iLRT serves as a liquid representation of the restaked position, enabling further participation in protocols across DeFi.
iLRTs vs Basket-Based Approaches
The two primary methods of restaking—Isolated Liquid Restaking (iLRTs) and Basket-Based Restaking (bLRTs)—present distinct approaches to asset management:
Basket-Based Restaking (bLRTs)
Basket-based solutions are the most common approach to collateral management in the Restaking space. In this framework, multiple assets are pooled together into a single token (LRT), offering diversified exposure. While this might sound appealing, it introduces complexities:
Risk Interdependence: Poor performance of one asset affects the entire pool.
Lack of Transparency: Users lose clear visibility into individual asset performance.
Operational Complexity: Balancing and managing pooled assets requires significant oversight.
Why Isolated Liquid Restaking?
In contrast, iLRTs focus on individual asset management:
Risk Isolation: Each asset’s performance is independent, preventing cross-contamination of risks.
Transparent Performance Tracking: Users gain detailed insights into the yield and performance of each underlying asset.
Yield Optimization: By focusing on individual assets, users can implement strategies tailored to each token’s characteristics, unlocking higher reward potential.
Supported Assets and Corresponding iLRTs
InceptionLRT supports a wide variety of assets, each linked to a unique iLRT. These include but are not limited to:
ankrETH -> inankrETH
cbETH -> incbETH
ETHx -> inETHx
lsETH -> inlsETH
mETH -> inmETH
oETH -> inoETH
osETH -> inosETH
rETH -> inrETH
sfrxETH -> insfrxETH
stETH -> instETH
swETH -> inswETH
wBETH -> inwbETH
sFRAX -> insFRAX
tBTC -> intBTC
slisBNB -> inslisBNB
EIGEN -> inEIGEN
Each pairing is rigorously designed to guarantee that the iLRT retains the original assets' economic and functional characteristics, allowing customers to keep tailored risk profiles and investment strategies while benefiting from increased liquidity and potential yields.
Rewards for iLRTs Holders
iLRTs are reward-bearing tokens, offering a dual avenue for earning:
Staking Rewards: In the case of having a reward-bearing as collateral, users continue to benefit from rewards tied to the underlying asset’s staking mechanisms.
Restaking Rewards: Additional yield opportunities are unlocked through participation in Active Validated Services (AVSs).
These rewards are distributed in forms such as ETH, stablecoins, or tokens specific to AVSs. The cumulative rewards are reflected in the growing value of the iLRT over time.
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