TL;DR
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A number of weeks in the past we did a chunk on liquid re-staking on Ethereum.
The essential premise goes like this:
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You possibly can danger a portion of your ETH holdings (through staking) to earn ~5% curiosity per yr.
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Some suppliers provide you with ‘staked ETH’ tokens (aka stETH) while you stake with them — this manner, you continue to have liquid (spendable) crypto in your pockets.
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Re-staking permits you to take that stETH and stake it (danger it) once more, with a view to earn even increased returns.
Which appeared like a wild idea once we first heard it (you need customers to double down on danger?).
So wild, that we completed that unique article by saying this:
On one hand, it’s tremendous thrilling!
On the opposite, the promise of returns with no cash down does really feel just a little “2008-ish.”
(We undoubtedly have to do extra analysis on it).
Nicely, we did extra analysis — and…
Seems we hit the panic button prematurely!
Trigger if you happen to lose your stETH, you possibly can’t redeem your unique ETH, which implies you aren’t really risking twice what you personal…
Confused? Identical. Consider it like this:
For those who lock up your bike (ETH) and lose the important thing (stETH) — it’s not such as you’ve misplaced two bikes swiftly — it’s nonetheless simply the one (distinction is, you possibly can’t entry it any extra).
And to this point, Ethereum re-staking platforms have completely boomed, accruing greater than $8B in locked worth!
Get us some humble pie — we stand corrected, and able to eat!