eigenlayer

What’s your most bearish scenario for EigenLayer?

Researcher
Co-author of EIP-7212 
Ex- @getclave

1) ETH price dumps abruptly, liquidating a large amount of LST/LRT positions
2) one or more LSTs depeg (could also be due to a staking pool bug), massive DeFi liquidations affecting the peg even more
3) DeFi destabilizes, bad debt arises
4) EiL security collapses

LSTs/LRTs are safe. Leveraged LSTs/LRTs are dynamite.

Navigating between the fields of blockchain education, adoption, corporate finance, and compliance. Part time Ethereum node operator 🦇🔊

@doganeth I would sleep infinitely better if we could prove this scenario is not possible. Currently, it sort of does keep me awake.

You are just describing financial leverage in lending protocol here. I don’t see anything here that would impact EiL other than LST depegging. Also I don’t see the connection between 3&4. 

Checkout this:

views are my own, protocol @ eigen labs; prev working on decentralization @ gitcoin, llama, stanford medicine.

The reason for which the connection between 3) and 4) is blurry is because it has not been stated yet what role which LSTs will play in the EiL ecosystem. 

Assuming they work as some sort of borrowed collateral which hybrid Eigenpod operators use (similar-ish model to rocketpool), a depeg vanishes economic security.

Super happy to keep on this conversation going btw... I am fascinated by EiL's potential, but also between cautious and disenchanted about the financial leverage exponentiation vector it will introduce to Ethereum. 

We need to do it. We need to try out this great experiment. But I do see LSTs/LRTs becoming dynamite.

You are just describing financial leverage in lending protocol here. I don’t see anything here that would impact EiL other than LST depegging. Also I don’t see the connection between 3&4. 

Checkout this: https://docs.eigenlayer.xyz/eigenlayer/risk/risk-faq

came here to say this it's worrying me and nothing states it wont happen but diving into the eigen layer docks i believe it won't be a fast process it will be silo'd based on what project your stake is securing