JPMorgan: Ethereum re-staking could lead to a “cascade of liquidations”

金色财经 · 2023-10-08T15:03:05.000Z

[JPMorgan Chase: Ethereum’s re-hypothecation may lead to “a series of liquidations”] Golden Finance reported that analysts at investment bank JPMorgan Chase said that Ethereum’s blockchain is constantly developing, but its latest features may bring stability risks. According to a report released by JPMorgan analysts on Thursday, the previous The Merge and Shanghai upgrades led to "an overall increase in staking activity on the Ethereum network," and one of the main contributors to the increase in staking were liquidity staking providers. With the emergence of these protocols, these protocols "bypassed obstacles such as the high pledge requirement of 32 ETH, technical complexity, and lack of liquidity of pledged Ethereum, allowing ordinary investors to pledge", and later launched a restaking function to allow Users double-collateralize their ETH on different protocols and even chains. But if the value of the pledged assets drops sharply, or if the pledged assets are "hacked or slashed due to malicious attacks or protocol errors," re-staking could result in "a cascade of liquidations."

[JP Morgan: Ethereum re-staking may lead to "a series of liquidations"] Golden Finance reported that analysts at investment bank JPMorgan Chase said that Ethereum's blockchain is constantly evolving, but its latest features may bring stability risks. According to a report released by JPMorgan analysts on Thursday, the previous The Merge and Shanghai upgrades led to "an overall increase in staking activity on the Ethereum network", and one of the main contributors to the increase in staking was the emergence of liquidity staking providers, which "bypassed obstacles such as the high staking requirements of 32 ETH, technical complexity, and insufficient liquidity of staking ether, enabling ordinary investors to stake", and then launched a restaking function that allows users to double their ETH on different protocols or even chains. However, if the value of the pledged assets drops sharply, or the pledged assets are "hacked or cut due to malicious attacks or protocol errors", re-staking may lead to "a series of liquidations."