Mendi Finance Dominates with Smart Leveraged Resttaking Strategies

• Mendi Finance uses advanced strategies to maximize staking rewards.
• Key risk indicators include liquidity management and whale impact analysis.

Leveraged retaking has become a popular cryptocurrency method, allowing users to receive airdrops of Liquid Retaken Tokens (LRT) in addition to leveraged staking payouts.

Layer 2 (L2) solutions and associated protocols have been rapidly integrating LRT into their ecosystems, capitalizing on this emerging trend. Mendi Finance and Zero Lend are two leading players using this method and have significant total value locked (TVL).

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Understanding Liquidity and Position Sizing in Leveraged Resttaking

When manipulating leverage re-staking For positions, especially with Wrapped Ether (WETH), key economic risk indicators should be looked at. Available liquidity is one of the key indicators clients use to determine the position size they can enter.

Available liquidity is the amount of liquidity provided that is still available for borrowing in the WETH market. Users can better decide the size of their entry by understanding the total liquidity available and the fraction previously borrowed without significantly affecting interest rates.

Source IntoTheBlock on X

Another important tool is the whale exit simulation, which describes the possible impact of a large lender, or “whale,” exiting the market. Knowing the size and number of whales on the lending side allows borrowers to anticipate changes in position and interest rates.

Mendi and Zero Lend have significantly more liquidity than whales, suggesting that a whale’s exit would have limited impact on leveraged borrowing rates.

Source: IntoTheBlock on X

The collateral distribution indicator is essential for assessing exposure to other assets in the ecosystem. This indicator provides insight into how lenders may react to a leveraged retaking, particularly if a collateral asset depreciates.

Open liquidations, another general indicator of a protocol’s health, should be at or near zero unless there is a transient increase in volatility. A persistent increase in open liquidations indicates the prevalence of bad debt, which forces lenders to exit and discourages new creditors.

Currently, both Zero Lend and Mendi have a similar number of open liquidations on their respective WETH markets. While no open liquidations are the ideal condition, both protocols are showing a steady downward trend, indicating active liquidations or debt repayment by users.

MENDI, the native token of Mendi Finance, is currently trading at $0.1257down 6.72% over the past 24 hours. Despite this, its weekly performance remains solid, with an increase of 1.82%At the same time, other players in the resttaking sector are also making significant progress.

Based on our track record reportChainlink has partnered with Eigenpie, a subDAO founded by Magpie, to improve cross-chain liquid staking, allowing users to smoothly move LRT across networks.

Additionally, Binance Labs investment in Puffer Finance In January, he contributed to the development of Layer 2 networks as well as the promotion of the pufETH token, an important step for resttaking on the Ethereum network.

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