This content originally appeared on HackerNoon and was authored by DeLeverage
Table of Links
3 Background
4 System Model and 4.1 System Participants
4.2 Leverage Staking with LSDs
7.1 stETH Price Deviation and Terra Crash
7.2 Cascading Liquidation and User Behaviors
8 Stress Testing
8.1 Motivation and 8.2 Simulation
9 Discussion and Future Research Directions
A. Aave Parameter Configuration
B. Generalized Formalization For Leverage Staking
C. Leverage Staking Detection Algorithm
5 Analytical Study
This section conducts an analytical study on the leverage staking strategy. We also offer a generalized formalization encompassing other potential scenarios in Appendix B.
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\ In addition to the standardized scenario discussed above, real-world applications of leverage staking can vary significantly among users. For instance, a user might choose not to reinvest all of their received stETH on Aave. For a more detailed exploration of this variability, please see the generalized formalization in Appendix B.
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:::info Authors:
(1) Xihan Xiong, Imperial College London, UK;
(2) Zhipeng Wang, Imperial College London, UK;
(3) Xi Chen, University of Sussex, UK;
(4) William Knottenbelt, Imperial College London, UK;
(5) Michael Huth, Imperial College London, UK.
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:::info This paper is available on arxiv under CC BY 4.0 DEED license.
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[8] https://docs.aave.com/risk/liquidity-risk/borrow-interest-rate
This content originally appeared on HackerNoon and was authored by DeLeverage
DeLeverage | Sciencx (2025-07-08T05:18:50+00:00) The Risks and Realities of Leverage Staking. Retrieved from https://www.scien.cx/2025/07/08/the-risks-and-realities-of-leverage-staking/
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