  Staking has emerged as a crucial concept following Ethereum's transition to
Proof-of-Stake consensus. The introduction of Liquid Staking Derivatives (LSDs)
has effectively addressed the illiquidity issue associated with solo staking,
gaining significant market attention. This paper analyzes the LSD market
dynamics from the perspectives of both liquidity takers (LTs) and liquidity
providers (LPs). We first quantify the price discrepancy between the LSD
primary and secondary markets. Then we investigate and empirically measure how
LTs can leverage such discrepancy to exploit arbitrage opportunities, unveiling
the potential barriers to LSD arbitrages. In addition, we evaluate the
financial profit and losses experienced by LPs who supply LSDs for liquidity
provision. Our results show that 66% of LSD liquidity positions generate
returns lower than those from simply holding the corresponding LSDs.
