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What is the propagation speed of LST‑driven load cascades during slashes?
The propagation speed of an LST-driven cascade is nearly instantaneous, limited only by blockchain block time and oracle update frequency. The process is automated by smart contracts:
Block N: Slashing event is recorded on-chain.
Block N+1: Price oracles update, reflecting a drop in LRT value.
Block N+2: Lending protocols identify undercollateralized positions and make them available for liquidation.
Block N+3: Liquidators execute trades on AMMs, crashing the LST price.
This entire feedback loop can occur in less than a minute. This digital, automated speed is what makes DeFi crises so violent and difficult to manage compared to their traditional finance counterparts, where human deliberation and regulatory halts can slow the process.
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