I've been staying up until now watching LST/re-staking, and I feel like many people are only focused on "an extra layer of yield," but honestly, the returns won't just disappear: part of it is the validator income from underlying staking + MEV sharing, and another part is the protocol giving subsidies/points stacking buffs to attract TVL. When it's hot, it looks pretty attractive; when things cool down, reality hits hard. Recently, there's been a lot of complaints about validator income, MEV, and fair ordering... The more I hear, the more I feel that behind the yield, it's really about "who bears the uncertainty."

Where does the yield come from?
From others willing to pay for security/liquidity/attention, plus short-term incentives.

Where does the risk come from?
It's when you repeatedly stake the same security, extending the chain: contract vulnerabilities, operator mischief, penalty linkages, liquidity discounts, and even bridges/cross-chain steps can send people away. Anyway, my current approach is: if I don't understand where the yield comes from, I just pretend it doesn't exist, and I'd rather earn less and sleep well.