@sherrypullman
The growth of liquid staking tokens (LSTs) tends to have a positive influence on ETH’s market price, but the impact is indirect. By allowing stakers to maintain liquidity while earning staking rewards, LSTs encourage more ETH to be locked into staking contracts. This reduces the circulating supply available for trading, creating a scarcity effect that can support higher prices. Additionally, LSTs often serve as collateral in DeFi, deepening ETH’s role in the broader ecosystem. However, excessive reliance on LSTs can introduce risks, such as liquidity crunches during volatile market conditions, so the long-term effect depends on adoption stability.
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