DeFi

Anyone worried about liquid restaking having unforeseen risks like Terra/Luna?

Investing in AI & Web3 via Generative Ventures
https://www.genventures.xyz/

Ex Chief Economist & CMO @Consensys

Unforeseen risks, yes most likely. 

Like Terra/Luna, no not all.

We're creating an algorithmic connection between the core currency of the network, ETH, and the validation of the projects on top via EigenLayer.

I agree that it's not the same math, but similar things are being tied together.

Terra created a stablecoin with backed by an endogenous asset and then promoted a highly unsustainable yield. I'm not sure how they are really in the same ballpark.

What do you think is the actual risk here?

My primary concern is smart contract risk of rehypothecation.

My secondary concern -- Eigenglayer is creating multiple new applications backed by the endogenous asset of Ethereum. If those applications fail, what will be the effect on the stETH used to validate them? I can't tell clearly.

Users are opting into rehypothecation though. They may blow up but I don’t see how it is systemic. 

Again, users will opt in to that. Even if all that ETH gets slashed to zero it shouldn’t impact the Ethereum network itself.