Recently, we've been talking about LSTs and re-staking again. To put it simply, the returns are not just falling from the sky: some come from the staking rewards themselves, and a lot are from "people willing to pay for security/liquidity," such as protocol subsidies, project token issuance, or you taking on more complex layered risks.

The risks are pretty straightforward: contract risk, penalty mechanisms (slash) affecting everything, liquidity discounts, plus a bunch of bridges and middleware. When something goes wrong, no one can really explain it clearly. I get tempted when I see others posting high APRs, but then I think about possibly having to queue, refresh, and retry for half a day just to redeem, and I calm down again...

Recently, RWA and US Treasury yields are often compared to on-chain yield products. My feeling is: that little "interest-like" stuff on-chain is actually mostly risk premium plus incentive sugar coating. Anyway, whenever the market heats up, I reduce my positions—losing a bit less and still sleeping well.