ethan lippman
@ethanl
Re: LRT Wars I think LRT is a winner-take-most market structure that will take 1yr+ to solidify. 🧵 There will be multiple winners because:
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ethan lippman
@ethanl
The risk profile between LRTs will vary depending on the LRT's Operator set & which AVSs are being secured. To start, the incremental slashing risk from restaking will be low given @eigenlayer's slashing veto committee & screening of AVSs.
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ethan lippman
@ethanl
But, in a future world with infinite AVSs, there are 2^n -1 permutations of AVSs that can be secured by an Operator, with n being # of AVSs secured. So, there can be lower-yielding, conservative LRTs and higher-yielding, risky ones - analogous to why there are bond credit ratings.
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ethan lippman
@ethanl
And, given low switching cost between LRTs, off-chain LP agreements, and low risk of AVS slashings in the short run, first mover advantages may not be too strong. Furthermore, the design space for LRTs is bigger than LSTs given AVS rewards dynamics.
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