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Can deep liquidity in LST markets buffer restaking shocks? Deep liquidity is the single most important buffer against restaking shocks. A deep market for stETH means that large volumes can be sold during a crisis without the price collapsing. This prevents a death spiral: liquidations can occur at prices close to fair value, protecting the solvency of lending protocols and allowing leveraged operators to exit without catastrophic losses. However, "deep liquidity" is often a fair-weather phenomenon. In a true panic, liquidity can vanish instantly as market makers withdraw to limit their risk. Therefore, while deep liquidity is a critical buffer, it cannot be relied upon as a permanent solution; it merely raises the threshold of shock required to trigger a cascade.

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