I used to think LSTs were just "an extra interest," but now the more I look at it, the more it seems like splitting the returns into several parts: the underlying staking rewards are like the foundation, and staking/various strategies on top are more like taking that foundation and doing secondary or tertiary pledges. Where does the yield come from? Honestly, it's because someone is willing to pay for "safety/liquidity/narrative," or subsidize the initial push, making it seem very attractive.

But the risks are pretty straightforward: the underlying is a consensus risk, and adding more layers of protocols on top introduces more points of failure, de-pegging, or liquidation chains. In extreme cases, when everyone wants to exit at the same time, liquidity becomes like a fire escape door that's too narrow... I used to be afraid of losing money, now I'm more afraid of "not being able to get back."

By the way, seeing Layer 2s constantly arguing about TPS, fees, and ecosystem subsidies, I automatically translate it in my mind as: subsidies are just another source of yield, or maybe a countdown to the yield disappearing. Anyway, when I look at APR now, I first ask: who is paying, and for how long?