#bedrock $BR
Day 12/16 📚 Newbie Docs Series
10/16 day promised : "What are the risks of Liquid Restaking?" But I couldn't talk about it on 11/16 day. Sorry for that.
Today we will talk about the same on day12/16. I'm new, and I'm scared too.
Liquid Restaking = ETH staked + staked again with a token like BR.
2 times yield = 2 times risk 😬
Risk 3 that I learned on Day 1-12:
1. Smart Contract Risk 🔓
BR, EigenLayer, Swell = Code. What if there is a bug in the code?
$60M was hacked in DeFi, right? Even if I lost $10, it's hard.
Survival: Small size only. "It doesn't matter if this is lost" count.
2. Depeg Risk 📉
The promise that 1 ETH = 1 BR.
But if the market panics, 1 BR = 0.95 ETH.
If you come to unstake, 5% loss. There is no SL for this.
Survival: Don't stake only BR when you don't have ETH.
3. Slashing Risk ⚔️
Stake ETH and validate AVS. What if the validator makes a mistake?
Both ETH + BR are cut = Slashing.
Survival: Don't run after "APY 20%". Check the validator reputation.
My Newbie Conclusion:
Higher Yield = Higher Risk. Simple math.
Day 1 I wanted "highest yield".
Day 12 I want "safest for beginners".
Crypto OG's, what risk did I miss?
Teach me in the comments 👇 I will post Day 13/16 "Position Sizing = Risk Control"
NFA DYOR. Just my learning notes 💎