Unchained Post-Merge, If Lido Becomes Dominant, What Does That Mean for Ethereum? - Ep. 372
Jul 12, 2022
Ryan Berckmans, an Ethereum investor and community member, joins Bitcoin investor Alex Bergeron to dissect Lido's impressive hold on liquid staking derivatives. They explore the implications of Lido's potential monopoly on Ethereum's decentralization, uncovering the mechanics of stETH and its uses. The conversation touches on the challenges posed by miner extractable value, dual governance proposals for Lido, and the ethical dilemmas of a centralized staking ecosystem. Can other competitors challenge Lido’s dominance? Tune in to find out!
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Lido's Dominance
- Lido’s dominance is driven by its first-mover advantage and network effects.
- A single staking derivative benefits users by maximizing liquidity, as seen with stETH.
Lido's Network Effect
- Lido's substantial lead, combined with network effects, makes it a "winner-take-all" scenario.
- An oligopoly with multiple staking derivatives is the best-case scenario for a diverse market.
MEV Advantage
- Post-merge, MEV becomes crucial, and Lido’s size gives it an outsized MEV advantage.
- This allows Lido to offer higher staking yields, attracting more users.