stETH is experiencing a sustained depeg - let's dig into the mechanisms driving it and how the great stETH looping unwind is playing out . stETH is a liquid staking token by Lido, which dominates it's category and is considered an exceptionally safe token. So why is it depegging?

The current sUSDe yield is over 1b$ annualized . Ethena is absolutely cooking

Validator exit queue is at an ATH 👀. Meanwhile ETH Borrow rates have not spiked, so why are we seeing such a large queue?. A few reasons:.1. stETH is at a 30bps depeg - this creates consistent peg arbitrage pushing validator exits.2. There is still overhang from the exits during

A deepdive into duration risk: the fundamental cause to the current stETH looping unwind and a major obstacle to the scaling of looping trades including RWA adoption in DeFi. What is duration risk?.Duration risk is the risk that the market value of a fixed‑income‑like position

RT @DefiMoon: UPDATE: Ethereum validator exit queue has started to grow again: +217k $ETH in just two days 📊📈🚀. Pretty obvious this increas….

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RT @Corkprotocol: The Ethena → Pendle → Aave PT-USDe looping trade accounts for over $3B in TVL. Is this $3B a ticking time bomb waiting t….

But it's not how institutions manage their risk. They need risk management infrastructure. The missing part of the DeFi stack.

RT @wintonARK: The winning answer. H/t @ec265.

RT @leopoldbiget: it now takes 21 days to unstake your stETH on Lido. but why in the first place is unstaking designed with waiting time? -….

RT @talkintokens: Tweets like the below from @eth_everstake make it clear how misunderstood DeFi debt markets are. No, validators are not e….

Significant media about the ETH validator exit queue being negative for the ETH price. They completely miss the point that this is driven by the unwinding of the stETH looping trade which is neutral in ETH/USD terms. Everyone loves a fabricated bearish story on a down day.

RT @Corkprotocol: Last night, a chain of events unfolded that illustrates a critical DeFi risk vector most overlook:. Even the most "liquid….

It is use cases like this which highlights even in very low risk assets like stETH, there are still time to liquidity risks which can meaningfully impact the peg . This is why we built @Corkprotocol to serve as a liquidity buffer for periods of extreme outflows.

This subtly impacts the pegs of staking/restaking assets, if the queue grows it could have meaningful impacts in a liquidation event. Depegs will happen.

Crypto volatility is a result of it's recursive nature. Regulatory clarity means the recursive loops will now enter institutional scales. Trillions instead of millions. Onchain finance is on the verge of explosive expansion.

Lfg.

Here's how @TheRealStone, @Philfog, and I look at other historical depegs from @Corkprotocol:

Stablecoins based on structured products are on the rise. They're also pretty complex. Breaking down the USD0++ depeg is a good way to understand the new kind of risks they create.

Great conversation w Jack on building in crypto.