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Bifrost, a liquid staking middleware, received a 500,000 DOT treasury loan from Polkadot (DOT) on February 23, as per the information shared with Finbold.  Following a successful treasury proposal by the Bifrost Foundation in January, the one-year loan is set to accelerate the expansion of vDOT, Bifrost’s liquid-staked version of DOT.  What can Bifrost do with the DOT loan? Built on the successful model established by the protocol’s previous 50,000 KSM treasury liquidity loans from Kusama, the initiative is set to reinforce the adoption and utilization of the asset throughout the Polkadot ecosystem, spanning Substrate and EVM parachains. Picked for you Sell-off alert: Cardano chart hints toward imminent ADA price drop 36 mins ago All eyes on $125 as Solana prepares for takeoff 45 mins ago Short squeeze alert for next week: Two cryptocurrencies with pump potential 1 hour ago ‘Face-ripping rally’ coming for XRP, say experts 3 hours ago ...

HashKey Capital highlighted risks such as reduced competition, increased risk of censorship, decreased security and collusion by big players. As it continues to grow, liquid staking brings considerable risks to the space and needs better decentralization, according to a report published by digital asset firm HashKey Capital.  According to the report , the overall liquid staking derivatives (LSD) market has surged to more than $22 billion in total value locked in 2023. In addition, the market capitalization of LSD projects has reached $18 billion. Overview of the liquid staking derivatives market in 2023. Source: HaskKey Capital While the growth of LSD protocols may be good for their respective communities and tokenholders, it also could be a double-edged sword. According to the report, it could harm the Ethereum ecosystem in various ways. As the table above shows, many LSD protocols rely on a small number of node operators that centralize a large number of validator nodes. Accord...