Danny Ryan, Ethereum Foundation's representative, discusses the risks of Lido to the Ethereum network, including declining popularity of isogenes, challenges of implementing VDFs, finding the ideal number for consensus, centralization issues in Lido, risks of staking with Lido, bottleneck analysis, and reluctance to speak up against centralization concerns.
Relying on Lido as a staking solution poses systemic risks to Ethereum's decentralization, credible neutrality, and smart contract security.
There is a need for coordinated discussions and increased visibility among developers and researchers to address concerns related to Lido and Ethereum's decentralization.
Staking with Lido is not necessarily the least risky option and individuals should carefully assess the potential impact on Ethereum's systemic security and value.
Deep dives
Implications of the merge and the delay in implementing code
The speaker discusses the merge, which happened a year ago, and the delay between coming up with ideas and implementing them. They highlight that working on proof of stake is more dynamic and involves addressing emergent behavior and understanding. They emphasize the importance of being aware of the potential problems and challenges in advance.
The danger of Lido and its impact on Ethereum's decentralization
The speaker expresses concerns about Lido, a protocol that centralizes the Ethereum ecosystem and poses a systemic threat. They argue that relying on Lido increases risks, including smart contract risk, governance risk, and potential regulatory challenges. They caution against staking with Lido as it compromises Ethereum's decentralization and credible neutrality, which are crucial for the system's value.
The need for a unified voice and more open conversation
The speaker acknowledges the lack of a unified voice and open conversation regarding the risks and implications associated with Lido and Ethereum's decentralization. They suggest the importance of coordinating and increasing the visibility of discussions among developers and researchers, expressing the need for collective action to address these concerns.
Addressing the scalability challenge and proposing an EIP
The speaker introduces EIP 7514, which aims to address scalability challenges in Ethereum's consensus layer and the distribution of blob data. They explain that the proposed EIP sets a maximum limit on the number of blobs, providing breathing room for engineers and researchers to optimize the system while maintaining economic stability. They also mention ongoing discussions to explore further improvements in scalability and smart contract risk mitigation.
Addressing misconceptions and risks associated with Lido
The speaker debunks the perception that staking with Lido is the least risky option, highlighting the risks of increased centralization, governance control, and smart contract vulnerability. They emphasize the need for individuals to carefully assess the risks before choosing a staking solution, pointing out the potential impact on Ethereum's systemic security and value.
The importance of speaking up and challenging the narrative
The speaker calls for more individuals, especially core developers and researchers, to speak up and challenge the narrative surrounding the risks and implications of Lido. They stress the importance of unity and collective action in addressing the concerns and safeguarding Ethereum's decentralization and security.
Welcome back to the show! We’re joined today by the Ethereum Foundation’s Danny Ryan to discuss the rise and rise of Liquid Staking Token DAO Lido. Danny has some strong opinions on the risk Lido poses to the Ethereum network.
Thanks for listening! If you’d like to get in touch, drop feedback or chat with Evan and Will, send us an email at web3builders@protonmail.com.
Produced by @ssailsbury.
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