Recently, someone asked me again where the returns from LST/re-staking come from... To put it simply, it's not just money falling from the sky, mainly: the basic yield from underlying staking + subsidies/fees obtained from being used to "borrow security/liquidity." It sounds pretty attractive, but the risks aren't something that can be wiped out with a simple "diversification": after multiple layers of wrapping, the real risk lies in correlation. When extreme market conditions hit, liquidation lines bunch together on the same path, and if the fee rate/OI fluctuates wildly, everything can get squeezed out, and on-chain it looks like a flatline on an ECG.

Recently, Layer2 is still arguing about TPS, fees, and ecosystem subsidies. I only care about who pays the subsidies, how long they can last, and not ending up with "using subsidies to buy TVL," because when the wind stops, everything retracts.
My biggest fear isn't losing money, but losing control: once the pace of positions, redemptions, and liquidations is no longer in my hands, no matter how good the data looks, I can't sleep. For now, I'd rather earn less.