We assess that WBETH is riskier in all categories except volatility compared with both stETH and cbETH.

There are potential advantages of a centralized LSD product within a diversified collateral basket, namely that the service provider can react more quickly during adverse circumstances, leading to less volatility and possibly greater user trust in the product.

Care should be taken to limit WBETH exposure for the primary reasons: 1) There is no reliable pricefeed for WBETH/BETH on Ethereum. It is possible that WBETH loses its peg to ETH which may result in the accrual of bad debt to a lending platform that lacks a reliable pricefeed. 2) WBETH is the least liquid LSD of the initial proposed Prisma basket (wstETH, cbETH, sfrxETH, rETH, and WBETH). It has poor DeFi integration and, as a result, the vast majority of BETH/WBETH liquidity is on Binance.

Compared with other LSDs being considered for onboarding, WBETH offers no real advantage from a risk perspective. Its most analogous competitor, Coinbase cbETH, scores higher in almost every category. Whereas the risk profile of cbETH may balance certain deficiencies observed in stETH, WBETH does not adequately balance the risk profile of a diversified basket.