This will likely be my last comment on the subject of Sushi since there’s only so many ways to beat a dead horse. First off, your proposal didn’t fail because of me, it failed to reach quorum by 80% in spite of my vote. Even though my vote made no difference I’m still happy to explain why I believe it is the correct choice.
You saying that LidoDAO’s ownership of the funds in question is illicit is a gross misrepresentation of the facts, which you make at your own risk. Sushi says if a bankrobber takes the subway to escape, the subway has stolen funds because the bank robber paid the price to ride the subway - we all know that this is never the case. The subway rendered a service, and was paid a service fee for it. If everyone had to know the last five transactions of each dollar bill and whether they were “legitimate”, there would be no commerce at all.
You even agree with that in principle. You admitted yourself, in a public LobsterDAO chat, that if an equivalent situation occured in Sushi (receiving a service fee for handling a big exploit trade), you would not vote to return it. This is understandable and correct, but please be consistent.
Finally, the entire situation is orthogonal to staking ETH from Lido’s treasury into the protocol. Service fees, like the above, are automatically sweeped and restaked, and were never part of the treasury to start.
If I were you, I would focus on my own misbehavior and liability in this situation for launching an unaudited smart contract which – to round out the analogy from above – left the trezor door wide open.