Recently, I’ve seen a bunch of people talking about LSTs and re-staking again. Basically, the main sources of yield are twofold: one is the original staking interest, and the other is the extra subsidy gained from lending out the “security/credit” (fees, incentives, tokens from project teams). It sounds pretty attractive, but the risks also stack up: if the underlying validators/nodes get penalized, or if the contracts and intermediaries involved in re-staking have issues, it could lead to a chain reaction. The most annoying part is that once correlations increase, what looks diversified normally crashes together during a downturn.

These days, hardware wallets are sold out everywhere, and phishing links are flying around… I actually think this is the same logic as re-staking: the “extra” you get essentially comes from taking on more unseen complexity. Anyway, I’d first ask myself: who is actually paying for these yields, how long do I have to pay, and who will cover the losses if something goes wrong… Whether it’s worth it or not depends on whether you can sleep peacefully. What about you guys?