Table of Links Abstract and 1. Introduction Abstract and 1. Introduction 2. Related Work 2. Related Work 3 Background 3.1 Blockchain and DeFi 3.1 Blockchain and DeFi 3.2 Ethereum PoS 3.2 Ethereum PoS 3.3 Staking Options 3.3 Staking Options 3.4 LSD 3.4 LSD 3.5 DeFi Lending Protocols 3.5 DeFi Lending Protocols 4 System Model and 4.1 System Participants 4 System Model and 4.1 System Participants 4.2 Leverage Staking with LSDs 4.2 Leverage Staking with LSDs 5 Analytical Study 5 Analytical Study 6 Empirical Study 6 Empirical Study 7 Cascading Liquidation 7 Cascading Liquidation 7.1 stETH Price Deviation and Terra Crash 7.1 stETH Price Deviation and Terra Crash 7.2 Cascading Liquidation and User Behaviors 7.2 Cascading Liquidation and User Behaviors 8 Stress Testing 8.1 Motivation and 8.2 Simulation 8.1 Motivation and 8.2 Simulation 9 Discussion and Future Research Directions 9 Discussion and Future Research Directions 10 Conclusion and References 10 Conclusion and References A. Aave Parameter Configuration A. Aave Parameter Configuration B. Generalized Formalization For Leverage Staking B. Generalized Formalization For Leverage Staking C. Leverage Staking Detection Algorithm C. Leverage Staking Detection Algorithm A Aave Parameter Configuration Table 3 depicts the historical changes of Aave parameter configurations. We crawl the collateralConfigurationChanged events for Aave V2 lending pool. B Generalized Formalization For Leverage Staking B.1 Generalized Formalization In addition to the standardized cases discussed in Section 5, real-world leverage lending situations can exhibit substantial variation among users. Specifically, we delineate the following variations using the direct leverage staking strategy as an example. C Leverage Staking Detection Algorithm Algorithms 1 and 2 depict the heuristics used to detect addresses that have performed direct and indirect leverage staking respectively. Authors: (1) Xihan Xiong, Imperial College London, UK; (2) Zhipeng Wang, Imperial College London, UK; (3) Xi Chen, University of Sussex, UK; (4) William Knottenbelt, Imperial College London, UK; (5) Michael Huth, Imperial College London, UK. Authors: Authors: (1) Xihan Xiong, Imperial College London, UK; (2) Zhipeng Wang, Imperial College London, UK; (3) Xi Chen, University of Sussex, UK; (4) William Knottenbelt, Imperial College London, UK; (5) Michael Huth, Imperial College London, UK. This paper is available on arxiv under CC BY 4.0 DEED license. This paper is available on arxiv under CC BY 4.0 DEED license. available on arxiv
