Your Loss is My Gain: Low Stake Attacks on Liquid Staking Pools
Fan Zhang
Permissionless Proof-of-Stake (PoS) economic security is predicated on the high cost of violating consensus safety or liveness.
We show that liquid staking introduces additional risks that are not captured by standard PoS economic security arguments.
Through an empirical study of Ethereum data, we find that the operational performance of liquid staking pools is positively associated with subsequent normalized liquid staking token (LST) returns.
Motivated by this, we present a cross-layer attack: