osETH Redemption Size to Repeg

Overview

This indicator helps users understand the notional value needed to bring the LST back to its expected value. In the mechanics for Stakewise, users can burn osETH in the vaults when below peg or mint new osETH when above the peg.

How can I use it?

The redemption size to repeg chart can help users understand how other actors in the Stakewise protocol are behaving when depegs either direction occur. In the chart above osETH is shown to be overvalued, meaning that minting osETH and selling it on the market would be a profitable strategy. However, this has not occurred yet because the arbitrage opportunity is too small compared to the costs of performing the arbitrage on ethereum mainnet.

If this redemption size to repeg started to grow much larger without any potential correction back to 0, this could indicate liquidity issues in the market or a lack of awareness from allocators in the vaults. Both of which could be risks to osETH holds if extreme volatility occurred in the future.