I’ve been looking at the LST + re-staking “extra-ingredient” setup again—where does the yield really come from? Put simply, it’s really two pots: one is the on-chain staking rewards that were originally there, slowly simmering; the other is re-staking, selling your “security endorsement” again, with the project team giving subsidies/points/incentives as seasoning. The seasoning is definitely fragrant, but the biggest danger is that you think you’re eating interest—you’re actually just eating the tail gas of subsidies…

The risks are also pretty straightforward: the underlying staking can be volatile, LSTs can trade at a discount / redemption can get clogged, and stacking re-staking adds possibilities like slashing, contract vulnerabilities, and liquidity squeeze—like “when the pot lid explodes.” Recently, people have often used RWA and US bonds to compare the yields against on-chain products, but my feeling is: US bonds are like boiled chicken breast in plain water—no surprises, but less likely to blow up; this on-chain pot is more like spicy hotpot—the moment the heat is turned up too high, it stings.

Anyway, whenever I see the two words “extra ingredients,” I’m going to hold back on my position size for now—don’t gulp it down too aggressively. If it really blows up, in the end you can only blame yourself for being greedy.