What Is ‘DeFi Composability’ and How Do LSDs Leverage It?

DeFi composability, often called 'money legos,' is the ability of different decentralized finance protocols and assets to interact and build upon each other seamlessly. LSDs leverage this by turning an illiquid, staked asset into a liquid, yield-bearing token.

This token can then be used as collateral for loans, traded on decentralized exchanges, or used in other DeFi protocols, creating a new layer of utility and yield stacking.