Goldman DeFi Crypto News

DeFi interconnection increases Systematic Risk says Goldman Sachs

Goldman Sachs highlighted an issue that interconnections between DeFi (Decentralised Finance) protocols could amplify the systemic risk. Goldman took the example of Lido Finance, a Liquid Staking protocol. A user can stake ETH tokens on Lido Finance and gets stETH (in 1:1 ratio) as a derivative token. Further, stETH can be used across DeFi platforms as collateral. The value of stETH was also affected by the UST collapse.