According to Goldman Sachs (GS), one little-noticed repercussion of the terraUSD (UST) crash is Lido, a liquid stacking protocol, which demonstrates how the links between decentralized finance (DeFi) applications exacerbate systemic risk.

Lido is a DeFi tool that allows ETH holders to set aside tokens to confirm transactions while also receiving income. Investors will receive a staked ether token (stETH) in a 1:1 ratio, which they can use as collateral or trade across supported trading pools, according to the bank.

The UST drop impacted stETH, which now trades at a 4.5 percent discount to ETH, according to Goldman. Because holders of stETH were able to transform their tokens into bonded ether (bETH) and gain incentives on Terra’s Anchor Protocol, they were able to win awards.

This is significant because Lido holds a third of all staked ether, demonstrating how “DeFi’s compostability can theoretically enhance systemic risk,” according to the bank.

DeFi refers to lending, trading, and other financial operations conducted on a blockchain without the use of traditional middlemen.