Episode Details

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

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://www.avax.network/

Oasis: https://oasisprotocol.org/grant-programs?utm_source=unchained&utm_medium=partnership&utm_campaign=podcast-oasis-grants-program

• Twitter: https://twitter.com/bergealex4

• Twitter: https://twitter.com/ryanberckmans

• Lido’s explanation of what stETH is: https://twitter.com/LidoFinance/status/1535184472546889735?s=20&t=oQeB1uj7HG7Y4he-0gbcLg
• Previous Unchained Coverage: In the Recent Crypto Market Meltdown, What Role Did Lido’s stETH Play?: https://unchainedpodcast.com/in-the-recent-crypto-market-meltdown-what-role-did-lidos-steth-play-ep-370/

• Alex’s thread on why ETH is broken: https://twitter.com/bergealex4/status/1410761639226318852?s=20&t=JLyNokP7Kxj7tIiDzHIHTQ
• Ryan on a liquid staking monopoly: https://twitter.com/ryanberckmans/status/1521179049548300291?s=20&t=JLyNokP7Kxj7tIiDzHIHTQ