Recently, someone has been touting LST/re-staking as “on-chain U.S. bonds” again, and I can’t help but find it a little funny… Where does the yield come from? Plainly put, it’s someone else paying for your risk: either rewards driven by inflation, new projects paying “wages” in the form of points/airdrops, or using this layer of “security” to do more things. The risks are also very straightforward: once the underlying little bit of returns isn’t enough to cover the extra promises, during a bank run it’s whoever moves slow who ends up as the charity; and the more middle layers there are, the more places there are where things can go wrong. Anyway, when I see stuff like this, I don’t care about the story—I look at liquidation hotspots and the funding rate; if it starts heating up, stay away—discipline is more valuable than faith.