Woke up earlier this week to my wstETH/ETH LP being completely wrecked. My first thought: 'what did I screw up now?'
Turns out the whole market is spasming, and the person who pulled the fire alarm is His Excellency @justinsuntron.
A thread on the great stETH depeg: 🧵
2/4 Here's the quick & dirty: For years, degens created leveraged yield by 'looping' stETH. This whole game works because stETH is supposed to be worth 1 ETH.
The hidden catch? Redeeming stETH for real ETH isn't instant; there's an "exit queue."
3/4 Justin Sun clogged that queue by cashing out his massive ~450k ETH position, blowing the wait time to 9+ days & causing the depeg.
Now, every other looper is royally screwed. Their money printer has become a cash furnace as ETH borrow rates have skyrocketed.
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