Seamless Protocol is set to launch an Integrated Liquidity Market (ILM) on Lido for wrapped staked Ethereum (wstETH), offering an alternative borrowing strategy for tokenholders who want to explore options beyond traditional restaking.
The ILM will allow stakers on Lido to automatically utilize a borrowing strategy and compound positions on wstETH. This means that the returns from staked Ether (ETH) will be reinvested automatically, potentially increasing the rewards for users.
The key difference between this approach and restaking lies in the sophistication of the investment strategy. Seamless’s ILM continuously manages users’ funds, enabling low-collateral borrowing as the funds are maintained within the ILMs. Restaking, on the other hand, involves reinvesting staked ETH to earn additional rewards without relying on advanced automated strategies.
On-chain lending serves various purposes, catering to traders seeking leverage or liquidity, as well as long-term investors. Seamless’s process targets single-purpose loans, ensuring that the liquidity is used for the intended purpose and cannot be diverted elsewhere by the borrower.
Seamless emphasizes the transparency of its on-chain borrowing strategies, as smart contracts allow liquidity suppliers to have full visibility into how the funds are utilized.
The protocol was developed on the Base network and went live in mid-2023, created by developers from Seashell, RNG Labs, Loreum Labs, and previous contributors from Uniswap, Aave, Ampleforth, and CertiK.
As of now, Seamless has a total value locked (TVL) of $41.91 million, with over $20 million borrowed on-chain since January, according to DefiLlama.
Tokenholders who engage in staking or participate in decentralized finance protocols are typically exposed to risks such as security vulnerabilities in smart contracts, market volatility, and regulatory uncertainty.