Just now, my phone popped up a red dot, saying someone’s LST+ is staking again with a “more attractive annualized return.” I clicked in for a quick look and then closed it… Where does the yield really come from? Basically, there are three sources: the on-chain basic staking, the incentives issued by protocols/new chains, and the “leverage feeling” you get from repeatedly bundling the same collateral. The first two can still be accounted for clearly, but the third easily turns into a string of mutually guaranteeing promises.

The risks are roughly three layers: technical pitfalls like smart contracts and cross-chain bridges; stacking penalties (slash) and liquidity squeezes together in re-staking, so when something goes wrong, everyone rushes to redeem; and finally, regulatory standards—some “yield promises” are very sensitive in different regions, and a quick look at the on-chain graph reveals how the funds are being routed around.

Recently, new L1/L2 projects have been pulling TVL to offer incentives. Veteran users complain about “mining and selling,” which I actually understand—these incentives are not sustainable cash flows; they just create a buzz and then fade away. Anyway, when I look at these kinds of products now, I first ask: if the subsidies stop, what’s left?