Recently I’ve been looking at LSTs and re-staking again. Put simply, the returns don’t just drop from the sky: part of it is the base rewards from the original staking, and the rest mostly comes from the premium of “selling the same sense of security again,” plus various subsidies/points and other incentives. The subsidy period looks pretty enticing, but in my head I automatically apply a discount, because this thing is somewhat similar to inflation-driven chain games: when more people come in and studios join, sell pressure ramps up, and the narrative can easily shift from “growth” to a “spiral.”

The risks are also quite straightforward. You add one more layer of contracts and one more layer of dependency. If something goes wrong, it’s not that you’re just slower to withdraw—it's that the redemption queue and the mechanism directly trap you. Re-staking also adds the tail risk of “other people using your collateral to do things,” which you don’t usually feel in normal times, but in extreme situations it can be fatal.

The simple step I’m willing to take for extra safety right now is this: I’d rather make a bit less, and I split my positions. I only choose a few LSTs with deep liquidity and transparent redemption mechanisms, then periodically clear my authorizations… it’s more troublesome, but I sleep better.