Recently, I was asked again where the "extra profits" from LST/re-staking actually come from... Let me be straightforward: it's not printed out of thin air. The main part of LST is still staking rewards (plus possible MEV/tips). If you turn it into a "voucher" and use it elsewhere, it's like layering multiple uses on the same underlying asset; re-staking is more like renting out your security endorsement to another protocol, and they pay you rent/incentives.

The risks are also quite simple: penalties and confiscations on the underlying chain, the LST contract itself/oracles/liquidity, and if the "new service" on the re-staking side encounters issues, it could also affect you. The profits seem to stack up, but so do the tail risks... I usually first figure out who is putting up the money and who pays if something goes wrong. If I can't figure it out, I tend to avoid it.

By the way, regarding the modular/DA narratives, I’m still a bit behind; developers are talking excitedly, but users just want to ask, "Will I lose money?"... Anyway, I’ll sketch out some ideas and digest it first.