Flywheel effect on DeFI on IC

Liquid staking unlocks liquidity; Adding Borrowing + Lending amplifies the liquidity flywheel

ICP Staking

1 ICP staked, TVL = 1 ICP

ICP liquid Staking

1 ICP staked into Waterneuron, 1 ICP + 1 nICP

TVL = 2 ICP equivalent

ICP liquuid staking + lending

Using the same 1 ICP example:

0.6 ICP staked into Waterneuron = 0.6 nICP

0.4 ICP lent to 0.6 nICP as collateral; 0.4 d.ICP minted to receive interest

TVL = 2.4 ICP equivalent