Recently, someone asked me again where the returns from LST and re-staking come from.

Honestly, the main part of LST is staking rewards plus a little liquidity play; re-staking is more like lending out the "security endorsement," with project teams offering incentives to buy your tokens, and the returns aren't just made out of thin air.
The risks are pretty straightforward: contract vulnerabilities, penalty mechanisms, exit queueing, liquidity discounts, plus a bunch of protocols layered together, creating a chain reaction when things go wrong.
This airdrop season makes it even more obvious—point systems plus task platforms countering anti-witching, making people look like they're clocking in at work.
Now I’d rather do fewer tasks and see clearly who the money is really going to, who’s backing it…
Anyway, I’m still slowly simmering my positions; only the positions I can sleep soundly with are the ones I dare to scale up.