Lack of Leverage Options for Exotic Assets

Many DeFi assets like Liquid Staking Tokens, LP tokens, and tokenized real-world assets can earn rewards over time, but users often can't borrow against them or use them for other opportunities in DeFi. Even though new platforms offer some ways to make use of these tokens, most lending platforms still don't support them for borrowing or leverage.

As a result, over $11 billion worth of these assets remain locked and unused. This has further limited what users can do with their investments (Source: Binance Square). While some emerging platforms and protocols are experimenting with unlocking value from these tokens, the majority of DeFi users still face barriers to borrowing against LSTs, LP tokens, or tokenized RWAs.