Someone asked me again recently where the “profits” in LST/re-staking actually come from. While I’m making tea, I can’t help but want to laugh… To put it simply, most of what LST earns still mainly comes from staking rewards plus liquidity premiums. When market sentiment is good, people are willing to pay a little more.

Re-staking is more like taking the same sense of security and sending it to work several more shifts—then the protocol “hands you some money and points as overtime pay.” It sounds pretty great, but the risks are also pretty real: once a smart contract goes wrong, the whole bundle can blow up together; once the penalty mechanism kicks in, it’s not as gentle as a “drawdown”; and during a liquidity squeeze, even if you want to, you may not be able to get out.

Now Layer2 is arguing about TPS and subsidies every day, and I’m actually even more afraid of the day “subsidies stop” and everyone collectively sobers up… Anyway, I’ll just test it with a small position. I don’t dare add too much at night—keep the tea hot, and keep your mindset warm too.