DefiPlaza exploit -- request for comment

I would defer to my comments here and here. Even though no official policy on how to handle mev exploits has been ratified by the DAO to date–mostly from a lack of motivated individual to push for it–all of the arguments from previous discussions still apply:

  1. 95% of these funds are not the DAO’s to command but belong to stakers and node operators.
  2. The other 5% the DAO has received as a service fee for processing the block and is no more obligated to return the fee than a subway operator is obligated to return a train ticket bought by a bank robber.
  3. In order for Ethereum to be neutral infrastructure, it is important that validators and node operators act as close to “dumb pipes” as possibles. They more discretion they exert today, the more discretion they will be asked to exert in the future.
  4. If Lido DAO agreed to arbitrate any MEV transactions, it would open it up to demands to arbitrate all MEV transactions, down to a single DEX user getting sandwiched. This violates not only the previous principle, but also goes against the DAO’s singular focus on security and governance minimization.

So while I am very sorry about your loss and sympathize with the proposal from a personal perspective, actually acting on it would set a negative precedent and lead to a bad outcome for Lido and Ethereum on a systemic level.

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