How Does the Issuance of an LSD Token Affect the Total Circulating Supply of the Underlying Cryptocurrency? ▴ Learn

How Does the Issuance of an LSD Token Affect the Total Circulating Supply of the Underlying Cryptocurrency?

The issuance of an LSD token does not change the total circulating supply of the underlying cryptocurrency. The underlying coins are simply moved from a user's wallet into the LSD protocol's smart contract and locked for staking.

The LSD token is a separate, derivative asset that represents a claim on the staked coins plus accrued rewards. It is an accounting representation, not a new issuance of the base asset.

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