The top liquid staking derivative (LSD) tokens on the market will be made available to investors through Index Coop's new structured product, which is being launched On January 24.

The DeFi Pulse Index (DPI), which offers weighted exposure across numerous tokens in the decentralised finance (DeFi) ecosystem, is Index's most well-known index. Index has been churning out products like this for a long time. The project also provides a levered-ETH token as well as the MVI metaverse index.

It is now focusing on the booming market for staked Ethereum.

The most recent offering lets people buy Lido Finance, Rocketpool, and Stakewise's stETH, rETH, and sETH2 tokens. It is known as the Diversified Staked ETH Index (dsETH). Like an index, it has three tokens in one.

For investors who have staked their ETH holdings, these tokens are yield-bearing assets that may be utilised elsewhere to generate extra yield in DeFi. They are particularly well-liked since they permit investors to stake less than the necessary 32 ETH required to participate if they stake straight to Ethereum.

According to Crews Enochs, product and growth lead at Index Coop, the rationale for purchasing all three versions of a thing that is essentially the same is to balance risk.

“You want to be able to diversify your risk at the asset and protocol layers,” he stated. “All of my portfolio is subject to the same smart contract risk if I'm only using Lido protocol or Rocket protocol.” Holding the index essentially ensures that, should one of these staking sites become compromised, one won't lose everything.

The exposure to all three LSD tokens after that would guarantee “that the overall yield that your staked ETH is getting is much more consistent,” according to Enochs.