The collapse of TerraUSD (UST) caused the “contamination” of the stETH token issued by the Lido Finance service, increasing systemic risks. CoinDesk writes that this is the conclusion reached by Goldman Sachs analysts.

Lido allows you to deposit an arbitrary amount of ETH to profit from staking on the Ethereum 2.0 network. In return, users receive stETH tokens that provide liquidity for invested assets. Coins can be used in other DeFi protocols.

stETH holders can exchange tokens and receive rewards for beTH on the Anchor Protocol in the Terra ecosystem.

Terra’s issues resulted in a 4.5% discount for stETH over ETH. At the time of writing, it has dropped to 2%, according to CoinGecko. According to DeFi Llama, the TVL of the project was $8.85 billion. Shortly before Terra’s collapse, the indicator was $19.35 billion.

“This event is hard to overstate. One-third of all staked Ethereum is invested in Lido. The case clearly shows how DeFi composability can increase systemic risk.” experts stressed.

Recall that the nonprofit Avalanche Foundation lost $60 million due to the collapse of the Terra ecosystem.

Luna Foundation Guard and Terraform Labs have invested $200 million in AVAX as part of their joint effort. The first received tokens for UST in an over-the-counter transaction, the second exchanged them for the LUNA cryptocurrency. The assets were supposed to be used to stabilize the TerraUSD rate.

Previously, Forbes described the collapse of LUNA and UST as the “fifth reboot” of the crypto market.