Liquid staking firms could default on their Ether obligations if The Merge does not happen.
The next big crypto crash could be around the corner due to Lido Staked Ether (stETH), a liquid token from the Lido protocol that is supposed to be 100% pegged by Ethereum’s native token, Ether (ETH).Notably, the stETH peg could drop against ETH by 50% in the coming weeks, raising the risk of a “DeFi contagion” as Ethereum moves toward proof-of-stake (PoS), argues popular Bitcoin investor and independent analyst Brad Mills.Over 1M Ether liability risks defaultIn detail, investors deposit ETH in Lido’s smart contracts to participate in The Merge, a network upgrade aiming to make Ethereum a proof-of-stake blockchain, also called the Beacon Chain.