Match Finance⚖️

LSD narratives continue to gain momentum as @LybraFinance's yield aggregator @MatchFinance launches along with its TGE. A short thread on what pain points Match is resolving and why we should care🧵 1️⃣ Why care about Match if I'm a Lybra user? A bit of background of Lybra: In Lybra V1, $LBR was released to channel liquidity, which makes the token inflationary. V2 makes LPs less mercenary by requiring users to deposit 2.5% stake into dLP ( $LBR - $ETH pool) to earn esLBR tokens. Speaking of governance power, $esLBR determines the type of LST collateral to be accepted, the capacity of the vault and the $esLBR emissions to each vault. In terms of yield, $esLBR holders benefit from the circulation of $eUSD + minting of $peUSD, in particular the APY of non-rebase LST-backed $peUSD + the arbitrage of $eUSD <> $USDC. But (i) minting of $eUSD with LST + (ii) LP-ing of dLP could be too complex for smolbrain users like ShinChan. Another struggle for users is that the unlock period for $esLBR is extended from 1 month to 3 months. Plus - early redemption incurs penalties up to 90%. Very heavy time cost for holders. And this is where Match comes in with its introduction of a wrapped version of $esLBR known as $mesLBR + the segregation of dLP + $eUSD vaults. To put it in perspective, think of Match Finance as akin to the relationship between @CurveFinance <> @ConvexFinance, or @pendle_fi <> @Penpiexyz_io / @Equilibriafi. 2️⃣How exactly do I benefit? If you are LSD degens, you can farm $esLBR on Match w/o dLP. Match also employs a dynamic adjustment mechanism where liquidation rsisk are minimized. If you are dLP holders, you can stake on Match for boosted $esLBR yield + $MATCH token incentives. APRs stem from: - 100% of $eUSD emissions - 100% from $MATCH treasury emission - 70% from dLP emissions $stETH yield on Lybra at 19.55% whilst Match's $ETH vault gets slightly better at 22%. 3️⃣ How should I value Match? Convex or Penpie/Equilibria? The Game of Thrones in Lybra wars pretty much depends on the $esLBR distribution across diff. LST collateral. LST protocols with less capacities in Lybra’s vault might seek to accumulate $esLBR for greater voting power, which is akin to the case of Pendle. Here's a yield aggregator TVL versus Pendle/Curve TVL comparison. It's more pragmatic to reference from Pendle that these "second layer protocols" scale between 20-30% of the base protocol. With Lybra's TVL now at $300M+, then we might expect TVL of Match to pump prob. to $60M - $90M (Currently at ~$9M). The progressive accrual of $esLBR from Match will lead to the token empowerment of $MATCH where ultimately protocols would seek to incentivize $MATCH for boosted $esLBR influence. 4️⃣Closing thoughts Lybra War with Match in the picture is still in its early stages. But when we break down the yield into a 20% APR for depositing ETH that’s a decent move. If you are not tolerant of altcoin volatility then depositing $ETH into the vault is the most straightforward approach. For LST protocols, the key lies in increasing ETH deposits plus deepening LP depth on DEXes to incentivize liquidity. The integration of a LST-backed stablecoin is more of a secondary expansion, but it’s still a gud arena for whales.