The $45 billion liquid staking sector is prompting worries about the price stability of cryptocurrencies linked to these protocols. Liquid staking tokens (LSTs), which provide investors with the ability to access capital by offering an equivalent of the initially staked token, could depeg from Ether during volatile periods, according to Carlos Mercado from Flipside Crypto. He noted that when a significant percentage of Ethereum is staked, LSTs lack instant redemption, leading to potential price discrepancies in high volatility conditions. Although these depeggings can occur, arbitrage bots may quickly restore price alignment. Alon Askal from SVV Network emphasized that these bots can rapidly adjust prices back to equilibrium, especially after the Shanghai upgrade allows easier ETH retrieval from staked positions. A past incident saw the Renzo ETH (ezETH) token temporarily lose its peg due to a wider sell-off. Liquid staking is also expanding across other blockchain ecosystems, with significant potential seen in Solana.

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