Skip to main content

Risks

Liquid staking carries inherent risks. This page covers them and how StakeWise addresses each.

Vault Performance Vault Performance​

Your staking rewards depend on how well your Vault performs. Ethereum rewards validators for performing their duties correctly and penalizes them ↗ for going offline, missing attestations, or acting maliciously. These penalties reduce the staked ETH in your Vault.

Each Vault is fully isolated — poor performance in one Vault has no effect on stakers in other Vaults. You can review every Vault's performance in the app before staking. If a Vault's performance starts declining, consider unstaking and moving to a better-performing Vault.

Smart Contract Smart Contract​

All DeFi protocols carry smart contract risk. StakeWise runs on battle-tested, regularly audited contracts securing hundreds of millions of US dollars' worth of stake. The protocol has been live since 2021 with no security incidents.

osETH Depeg osETH Depeg​

osETH could temporarily trade below its fair value on secondary markets. The protocol's redemption mechanism keeps the market price tightly tethered to the protocol exchange rate: anyone can buy discounted osETH and redeem it for ETH at the protocol exchange rate (or mint and sell fresh osETH when it trades at a premium), and that arbitrage pulls the price back.

Boost Boost​

As with any leveraged strategy, Boost carries liquidation and penalty risks. If Aave's borrow rate exceeds the staking rate for too long, your Boost APY turns negative and your position loses value every day it stays open, while your LTV drifts toward Aave's liquidation threshold. A 2% safety buffer between max borrow LTV and the liquidation threshold gives your position room to absorb this drift. Above 94.5% LTV anyone can unboost the position on your behalf, and the StakeWise team monitors positions to do so when needed — but this is a permissionless safeguard, not a protocol guarantee. The Vault page shows a borrow status (Healthy / Moderate / Risky) so you can see where your position sits. Stay updated via StakeWise Discord ↗.

Unstaking Unstaking​

Unstaking is not instant. Your request joins the Vault's exit queue, which is served first from assets already liquid in the Vault and then from validator exits. Two things set the pace:

  • A fixed claim delay. Assets cannot be claimed until 15 hours after you entered the queue, even if the Vault could cover the request immediately.
  • The network's validator exit queue. If validators have to exit to fund your request, you also wait for Ethereum to process them. This varies with network demand — the app shows a live estimate and the average over the past month.

Your assets keep earning rewards for the whole wait, and StakeWise Oracles force validator exits if a Vault's operator does not free up assets within 24 hours, so a request cannot be stalled indefinitely by an unresponsive operator. Vaults that hold most of their assets in active validators will still be slower to exit than Vaults holding a liquidity buffer.

Last updated on