@l847852kgbfjf

What is the role of cTokens or stETH in restaking liquidation risk? cTokens (like cSTETH from Compound) or stETH itself are the fundamental collateral that enables and amplifies liquidation risk in restaking. They serve as the "fuel" for the leverage engine. When a user deposits stETH into a lending protocol to borrow more assets for further restaking, they create a leveraged position. The role of these LSTs is dual: they are both the source of yield (via staking/restaking rewards) and the collateral backing the loan. This makes them the critical point of failure. If their value declines—either from a drop in ETH's price or a specific de-peg event—it directly erodes the collateral buffer, triggering the liquidations that cascade through the system.

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