Ryan Berckmans, Ethereum investor and community member, and Alexandre Bergeron, Bitcoin investor, discuss Lido’s dominance as a liquid staking provider, whether that issue can be resolved, and how it could be a centralizing force for Ethereum. Show highlights:
- what stETH is, what the uses cases are for stETH, and why it is important
- how Lido had a first-mover advantage and how that kicked off network effects
- whether the liquid staking derivatives system is one of a “winner-take-all”
- how much of the staked ETH will be turned into a liquid staking derivative
- how Lido might have a huge MEV opportunity after the Merge
- what the proposer-builder separation is
- whether Lido's dominance will increase over time
- whether other competitors have been competitive with Lido
- why Lido is a natural monopoly because of the incentives and MEV opportunities
- what the implication of Lido’s monopoly is for Ethereum’s censorship resistance
- whether Lido is effectively a single entity despite having multiple node operators
- whether there could be a long waiting period for becoming a validator after the Merge
- how Lido is moving its staking derivatives to other chains
- how Lido’s new dual-governance proposal works, why it might be useful to decentralize Lido and whether it reduces the power of LDO token holders
- how Lido’s centralization is the biggest threat to Ethereum in the long term and what are the possible solutions
- why Ryan believes the value of ETH comes from its credible neutrality and whether Lido's centralization may jeopardize that
- whether finding solutions around MEV opportunities is a good way to reduce Lido’s monopoly
- whether Lido’s competitors could form an alliance and build a tokenized basket of their staking derivatives to compete with Lido
- whether Lido could airdrop the LDO token to all ETH holders to decentralize its governance token
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Lido’s Centralization:
Lido’s Governance Proposals
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