Ethereum LSTs → News → Incrypthos News

Ethereum LSTs

Definition ∞ Ethereum LSTs, or Liquid Staking Tokens on Ethereum, are derivative assets that represent staked Ether (ETH) in a liquid form. These tokens allow users to maintain liquidity and participate in other decentralized finance (DeFi) activities while their underlying ETH remains locked in staking protocols. LSTs accrue staking rewards and can be traded or used as collateral across various DeFi platforms.
Context ∞ Ethereum LSTs are a prominent topic in crypto news, particularly with the rise of ETH staking following the network’s transition to Proof-of-Stake. Their proliferation introduces new dynamics to DeFi, including considerations for protocol stability, potential centralization risks among LST providers, and their growing influence on the broader Ethereum ecosystem’s economic structure.

A large, textured sphere, resembling a celestial body, partially submerges in dark blue liquid, generating dynamic splashes. Smaller white spheres interact with the fluid. This visual metaphorically depicts a decentralized exchange's DEX liquidity pool, where tokenomics drive asset interactions. The main sphere represents a governance token or wrapped asset undergoing smart contract execution, influencing market volatility. The liquid signifies available liquidity, while smaller spheres are other digital assets or stablecoins within the DeFi ecosystem.

→Liquid Staking Derivatives

→Gas Optimization

→Legacy Contract Risk

Yearn Finance yETH Pool Drained Exploiting Cached Storage Arithmetic Flaw

A critical failure in state transition logic allowed a minimal 16 wei deposit to mint infinite tokens, leading to a $9 million loss via arithmetic overvaluation.