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https://warpcast.com/~/channel/eigenlayer
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Dogan
@doganeth
What’s your most bearish scenario for EigenLayer?
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ArtDemocrat
@artdemocrat.eth
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.
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kydo
@kydo
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
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ArtDemocrat
@artdemocrat.eth
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.
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ArtDemocrat
@artdemocrat.eth
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.
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