Recently, I’ve been asked again about LST and re-staking—where exactly the “yield” comes from. My own understanding is pretty crude: part of it is that straightforward money from validation rewards, and the rest is basically taking the same security and splitting it up to sell it to more places for use—while also collecting service fees/incentives. Plainly speaking, it’s not something that grows out of thin air; it’s more like moving risk around and layering it.

The risk is pretty straightforward too: the biggest fear is that those on-chain “promises” all go wrong at the same time—contracts, oracles, slashing/penalty (seizure) mechanisms, liquidity—if any one of them gets stuck, it can trigger a chain reaction. It looks stable in normal times, but once you hit extreme market conditions, it turns into a scramble to see who can run fastest. Last week, funding rates were extremely stretched again, and in the group people were arguing whether it was a reversal or just continuing to squeeze bubble profits. I’m actually even more alert to these moments when “one squeeze” ends up squeezing everything together.

My approach right now is: I’d rather take a smaller bite than take all the LST and re-stake them—keeping a buffer that can be exited at any time… No rush through bull or bear markets; I just want to live longer.