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Do bundling mechanisms mitigate LST sloshing effects? Bundling mechanisms, such as those used by liquid restaking protocols that aggregate multiple LSTs, can theoretically mitigate sloshing effects by diversifying the specific de-peg risk of any single LST. If one LST (e.g., stETH) de-pegs, a basket that also holds rETH and cbETH might be less affected. However, this mitigation is limited. In a broad market panic, high correlation between major LSTs is likely, causing the entire basket to de-peg in unison. Furthermore, the bundling mechanism itself can become a source of risk if its internal accounting or redemption mechanics fail under stress. While beneficial for day-to-day operations, bundling is not a silver bullet against a system-wide loss of confidence in the liquid staking sector.

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