(Get Us Some Humble Pie) We Got Ethereum Re-Staking All Wrong!

TL;DR

• Ethereum re-staking platforms have accrued more than $8B in locked value (and the risk we perceived when first learning about it all was misunderstood).

Full Story

A few weeks ago we did a piece on liquid re-staking on Ethereum.

The basic premise goes like this: 

• You can risk a portion of your ETH holdings (via staking) to earn ~5% interest per year.

• Some providers give you ‘staked ETH’ tokens (aka stETH) when you stake with them — this way, you still have liquid (spendable) crypto in your wallet.

• Re-staking allows you to take that stETH and stake it (risk it) again, in order to earn even higher returns.

Which sounded like a wild concept when we first heard it (you want users to double down on risk?).

So wild, that we finished that original article by saying this:

On one hand, it’s super exciting!

On the other, the promise of returns with no money down does feel a little “2008-ish.”

(We definitely need to do more research on it).

Well, we did more research — and…

Turns out we hit the panic button prematurely!

Cause if you lose your stETH, you can’t redeem your original ETH, which means you aren’t actually risking twice what you own…

Confused? Same. Think of it like this:

If you lock up your bike (ETH) and lose the key (stETH) — it’s not like you’ve lost two bikes all of a sudden — it’s still just the one (difference is, you can’t access it any more).

And so far, Ethereum re-staking platforms have absolutely boomed, accruing more than $8B in locked value!

Get us some humble pie — we stand corrected, and ready to eat!