These days, someone asked me again where the "profits" from LST/re-staking actually come from. To be honest, don’t be fooled by the annualized returns: part of it is the consensus rewards for underlying staking, and the rest is often project subsidies, point airdrops, or new L1/L2 incentives to boost TVL through “buy volume.” What you receive isn’t interest out of thin air; it’s others willing to pay to lock in your tokens and bear the risk upfront.

But conversely, the risks are pretty straightforward: adding an extra layer means more points of failure—contracts, oracles, custody/agents, liquidation rules, liquidity discounts—any of these pitfalls could turn “redeemable” into “let’s wait and see.” Recently, veteran users complaining about mining and selling, I also understand. When incentives retreat, the selling pressure + unlocking + deleveraging stack up, and the on-chain liquidation echoes can get especially loud. Anyway, I just treat it as a high-volatility instrument, keep my position small, and don’t rely on others handing out tokens to stay afloat.