Selling liquid staking tokens

For LIDO (or any liquid staking) why should I bother to unstake when I can just swap my liquid staked token (such as stLuna or stEth) for the native token, avoiding the unstaking period? Aside from avoiding some slippage there seems to be no difference. The liquid staked token still appreciated relative to the native token (any difference should be arbitraged away). For coins like LUNA that have a super long unstaking period of 28 days, I would much rather take the slippage than wait for 28 days of waiting with no APY or access to my coins.


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2 thoughts on “Selling liquid staking tokens”

  1. Depends on the exchange rate. You usually get a better deal slow-burning the staked tokens (waiting), so I’d only swap when you have no other option. In Luna land, a common arbitrage play is to buy staked Luna at a discount and slow-burning it to unlock some % profit

  2. As you said if the exchange rate is good enough, you can just swap instead of having to wait.

    However, if many people want to exit at the same time, and start making the same swap, the exchange rate will become much worse than waiting. Right now it’s perceived as a low risk strategy so nobody is in a rush to get out of staked ETH.


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