Uncommon Core 2.0
The Merge (Part 2) - with Stephane Gosselin, Danny Ryan, Tim Beiko, and Hasu
Podcast summary created with Snipd AI
Quick takeaways
- MEV evolution post-Merge involves mev-boost and PBS
- Liquid staking with Lido raises concerns about market dominance
- Decentralization efforts in staking pools aim to avoid centralization risks
Deep dives
The Complexity of Proof of Stake Transition
Transitioning to proof of stake is a complex upgrade involving various aspects of the protocol. It touches on consensus mechanisms, client modularity, and diversity. The long road to proof of stake has implications for the Ethereum network in terms of consensus efficiency and client team testing.
Liquid Staking and Lido's Market Leadership
Liquid staking and Lido's emergence as a major market leader in providing staking services are discussed. Lido's role in allowing users to delegate staking responsibilities, turning non-productive ether into a productive asset, and its impact on reducing the cost of capital in staking is highlighted.
Concerns and Criticisms of Lido's Dominance
There are concerns raised regarding Lido's dominance in the staking market, with discussions on the risks associated with centralized control of staked assets. Criticisms about the need for better competition, the potential for cartels, and the implications of concentrated governance control within the Lido ecosystem are brought to light.
Addressing Centralization Risks and Governance Challenges
Exploring the risks of centralization and governance challenges within the Lido ecosystem leads to discussions on the need for improved governance models and mechanisms to enhance decentralization and prevent cartelization. The intricate balance between trust minimization, off-chain relationships with operators, and on-chain governance decisions are crucial considerations for the future development of staking pools like Lido.
Decentralization and Risk Management in Staking Pools
Efforts are made to decentralize stake in order to mitigate risks associated with centralization in Ethereum staking pools. The discussion highlights the importance of genuinely decentralized staking pools while acknowledging the risks involved. Concerns about self-capping solutions are raised, and the need for legitimate decentralized staking pools is emphasized.
Collaboration and Risk Assessment within the Ethereum Ecosystem
The Ethereum Foundation focuses on collaborating with external projects like Flashbots to enhance protocol stability and security. The conversation delves into aligning project goals with Ethereum's ethos, emphasizing open dialogue and technical cooperation. The discussion also touches on the challenges of navigating a decentralized ecosystem with independent teams and varied viewpoints.
Listen to conversations between two veterans of the crypto industry: Su Zhu, CEO and CIO of Three Arrows Capital, and Hasu, Strategy lead at Flashbots. Exploring the big ideas in crypto from first principles.
In this episode, Hasu continues the conversation with Danny Ryan and Tim Beiko, two researchers from the Ethereum Foundation. The three are joined by Stephane Gosselin, co-founder of Flashbots, who makes his podcast debut and stands in as Hasu's co-host.
Together, they discuss:
- MEV before and after the Merge
- mev-boost and proposer-builder-separation (PBS)
- The rise of liquid staking pools
- Whether Lido should cap its own growth
- How the Ethereum Foundation sees its role in interacting with very "protocol-adjacent" projects like Flashbots + Lido
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