Liquid staking and restaking tokens like wstETH, weETH, and ezETH are meant to track ETH closely, but they trade on their own supply and demand. That peg can slip.

One of the main risks comes from the redemption process. A liquid staked or restaked token represents actual staked ETH, but unstaking runs through an exit queue. If many holders want out at once, the only quick exit is selling on the open market, which pushes the token below the value of its backing. The other main risk is from a loss in the underlying backing assets due to a slashing event. Restaking tokens stack another layer of risk on top, since the staked ETH is committed to other protocols, each with its own slashing and failure conditions.