Recently, I’ve been looking into LST/re-staking again. To put it plainly, there are only two sources of yield: one is the “normal interest” from underlying staking, and the other is the “sweetener” from various new L1/L2 incentives that pull TVL. The latter looks tasty, but it’s also the easiest to turn into the kind of “mine, stake, and sell” loop that old users love to complain about—when the incentives stop, TVL runs away faster than anyone.

The risks are pretty much two layers too: problems with the underlying chain itself, or the LST issuer/custody/redemption mechanisms getting stuck. The re-staking layer is more realistic—too much complexity in strategies plus too many permissions. If a contract has a loophole, it’s not just a case of earning a bit less; it’s a direct wipeout to zero. Anyway, I’m following a checklist right now: only touch it if I can understand the redemption path, approve the minimum permissions whenever possible, and if the returns are high to the point of being ridiculous, treat it as an ad… We’ll talk about it again next time.