(Get Us Some Humble Pie) We Got Ethereum Re-Staking All Wrong!
TL;DR
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Just a few weeks in the past we did a bit on liquid re-staking on Ethereum.
The fundamental premise goes like this:
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You may danger a portion of your ETH holdings (by way of staking) to earn ~5% curiosity per 12 months.
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Some suppliers offer you ‘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 means that you can take that stETH and stake it (danger it) once more, with the intention to earn even increased returns.
Which gave the impression of a wild idea after we first heard it (you need customers to double down on danger?).
So wild, that we completed that authentic 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 slightly “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 authentic ETH, which implies you aren’t really risking twice what you personal…
Confused? Similar. Consider it like this:
If you happen to lock up your bike (ETH) and lose the important thing (stETH) — it’s not such as you’ve misplaced two bikes abruptly — it’s nonetheless simply the one (distinction is, you possibly can’t entry it any extra).
And to date, 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!
