Market Dynamics and Risks of Liquid Staking Derivatives
Powered by @unfolded- Staking on the Ethereum network has seen significant growth, with over 31M ETH staked, representing around 26% of the supply and $120B in value.
- Liquid Staking Tokens (LSTs) like Lido’s stETH & wstETH represent 33% of deposits on Aave V2 & $9.5B in collateral across DeFi lending markets.
- The article highlights potential market risks associated with liquid staking tokens, including price dislocations, governance and control mechanisms, and liquidity on primary and secondary markets.
- The article emphasizes the need to monitor associated market risks as the deep integration of LSTs within the on-chain ecosystem comes with crucial trade-offs.
https://coinmetrics.substack.com/p/state-of-the-network-issue-250