Establishing the Network Expansion Committee

Proposals
1

TL;DR

This proposal aims to establish a Network Expansion Committee that will be assigned to formally recognize (w)stETH token bridging endpoints and denominations on new networks as canonical, acting on behalf of Lido DAO.

Key suggestions:

  • Transition from the informal Network Expansion Workgroup (NEW) to the Network Expansion Committee (NEC)
  • Streamline the process for expanding (w)stETH to new networks without sacrificing the security aspect or transparency
  • Inheriting the principles presented in the unofficial bridging guide and corresponding previously recognized bridging endpoints and token denominations
  • Reuse already used codebase wherever possible + automate deployments

Motivation

In the past 3 quarters, wstETH got expanded and formally recognized with bridging endpoints by the DAO to 10 networks (Arbitrum and Optimism, Base, zkSync Era, Linea, Mantle, Scroll, BNB, Mode, Zircuit). Lido Multichain was launched as a place where the community can see an updated list of supported networks, statistics, guides and available integrations.
Most of them are Ethereum L2 rollups. These expansions provided significant value for the current and future Lido stakers which is visible by taking a look at Lido Multichain Dune dashboard.

All of these expansions were made possible through work between community members who did the technical lift and the NEW who provided guidance, best practices and assisted with the governance process after evaluating the deployment. The NEW has an advisory role, but not decision making.

Through these 10 expansions, the NEW and other contributors gained a lot of knowledge and made a few observations that lead to this proposal:

  • The process for expanding Lido staked tokens is a repetitive operational burden both for technical teams and governance voters
  • All of the NEW recommended proposals got voted in by the DAO
  • Community members recognize the NEW and ask for guidance which is respected
  • Arranging network expansion proposals inside regular voting slots results in slow GTM, potentially lowering the short term value of the expansion itself by missing opportunities

NEC expansion guide per network type

The intent is to do minimal changes to the proven process by following “if it ain’t broken, don’t fix it” approach.

This means that most of the changes in the process will happen only on the governance aspect, moving the target of the proposal from Lido DAO to the NEC to increase reactivity towards market conditions, user demand and increase competitiveness of (w)stETH over LST/LRTs.

The NEW has already designed and is currently working on fully automating (w)stETH deployments on the popular OP stack and Arbitrum stack networks. Note: This should not be confused with the default non-upgradeable tokens created by default token bridge instances having no governance rails.

These automated deployments will be encouraged by the NEC as they simplify the deployment and review processes, reduce the potential for human error, while still following the unofficial bridging guide (i.e., dedicated bridge endpoints, upgradeable token, governance forwarder, etc).

For other networks it is recommended to follow the reference deployments to reduce the workload and avoid the need to do an audit (assuming 0 code changes are needed for the deployment)

  • OP stack → automated deployment (reference networks with recognized wstETH: OP Mainnet, Base, Mode, Zircuit)
  • Arbitrum stack → automated deployment
  • ZKsync stack → follow reference
  • Scroll stack → follow reference
  • Linea stack → follow reference
  • Custom L2 → NEW guide
    • Newly developed or customized code, therefore, requires an audit by a reputable 3rd-party

No matter which flow is taken, the team that worked on the deployment needs to arrange a reputable third party to check and vouch for the deployment matching the audited codebase (example).

For networks that do not have a native bridge with Ethereum, the NEC will propose the temporary use of ecosystem-proclaimed native bridges like:

  • Wormhole on Solana
  • Axelar on Cosmos ecosystem

This does not mean that these deployments are automatically recognized by the NEC. Coordinating these deployments with the NEC in advance is required to ensure flexibility for future changes to multi-bridge solutions and to avoid liquidity fragmentation and technical debt. The NEC will have a right to choose or abstain of choosing the bridge solution for other networks. There will be a NEC specific form for requesting help with expansions. Later on, NEC may develop a more formalized approach towards non-L2s and networks with ecosystem-proclaimed bridges for further streamlining contingent on demand.

Committee members and vote process

The committee will consist of four members, Lido contributors who can provide expertise on key components for expanding Lido staked tokens to new networks.

@DeFiYaco - Protocol Relations
@TheDZhon - Tech
@EvgeniyEmelyanov - Product
@nikita.p - DAO Ops

NEC decisions require the unanimous support of committee members. Once the decision has been made, it must be announced on the forum by a committee member, along with the reasons for the decision and any supporting material (audits, deployment reviews, and so on).

The prerequisite for committee voting is having a reputable third party to evaluate the onchain deployment matching the audited codebase along with QA tests for the entire user flow.

All NEC decisions will be put on hold for at least 5 days from the time the forum post is published. If no objection is received during this period, the decision will stand. If an objection is received within this period, the NEC decision will be disregarded, and a regular snapshot vote will be held.

To object, anyone can sign an objection message on Etherscan and post the signing address, message, and signature hash as a reply to the forum post. The objection will be considered received if and only if the sum of LDO tokens held at the unique addresses used to sign the objection messages is greater than 100k LDO.

DAO vote weight > NEC vote weight: The DAO vote can override any NEC decision, including the complete dismantling of the NEC, even if it has already been implemented and released.

Committee members can be rotated if the contributor guilds or a committee member chooses to do so. Protocol relations member will then be rotated for another protocol relations contributor for example.

Motivation for assembling the NEC sooner rather than later

If the NEC gets assembled timely (the target is November voting slot, after Devcon), it will be able to work on approving Unichain deployment which will be the first deployment executed using automation for OP stack networks. Along with Unichain, the NEW is currently advising on deployments for a few other networks including Metis.

Likewise, if the NEC is not assembled, (w)stETH on Unichain will have to wait until the regular Snapshot voting slot in December at least.

11 Likes
2

As a Lido contributor I support this proposal. Moving to a committee approach will significantly improve operational efficiency, allowing the committee (and Lido DAO) to act swiftly while maintaining a consistent, security focused approach to network expansion.

7 Likes
3

Hey there, I would be honored to be part of NEC and am fully committed to facilitating transparency, providing tech facts and consideration lists concerning anticipated deployments, ultimately striving for streamlined process execution.

9 Likes
4

As a Defi Protocol Relations contributor at Lido DAO, I am highly supportive of the proposal.

The establishment of an NEC would allow for a more flexible and nimble approach that at the same time prioritizes security for expanding the usage of wstETH onto other chains.

The NEC also consists of subject matter experts that are highly experienced in their respective fields and should therefore be able to make decisions that are best aligned with the DAO’s goals.

Am all for streamlining the process of getting wstETH everywhere!

7 Likes
5

I am happy that this is being presented to the token holders and the wider community. I hope for a positive response, given that the NEC would greatly improve (w)stETH multichain expansion capabilities.

5 Likes
6

This proposal is a promising step, and DAO Ops stands ready to support the NEC’s launch and to work closely with the NEC to ensure that the initiatives are aligned and meet the standards expected by the DAO.

4 Likes
7

As Lido DAO tech contributor I support this proposal. Transitioning from the informal NEW group to a dedicated NEC provides with more transparency and clear operations.

The outlined process improvements—such as automating deployments for OP and Arbitrum stacks and creating a standardized NEC guide — promise to significantly reduce operational burdens and make the process of integration of Lido tokens to L2 chains and non-Ethereum chains more straightforward. The resources freed would allow to move quicker while maintaining the security and quality level.

5 Likes
8

I support this proposal and will vote for it on Snapshot soon. I believe creating NEC will help Lido scale faster, streamline processes, and reduce human error.

4 Likes
9

Fully support the proposal. I do feel like the process and infra the Network Expansion Workgroup had built up would allow to scale faster, and setting up a dedicated committee will allow for faster growth of cross-chain use-cases for StETH

3 Likes
10

General Thoughts

Since its first mention in October 2023, the Network Expansion Workgroup (NEW) has provided instrumental thought leadership in bridge guidelines/integrations, governance decision forwarding, proposal verification, and wstETH stETH expansion initiatives. The longstanding dedicated participation of the team’s two spokespersons @TheDZhon and @DeFiYaco from 2021 and 2022 indicates reliability and trustworthiness. Over the last year, the NEW team has consistently added value to the Lido community, evident in the non-exhaustive list of proposals and participation the NEW team mentioned here:

We believe NEC’s objective of operationalizing network expansion will decrease go-to-market times, resulting in faster expansion for wstETH stETH. The NEC also benefits from aligning itself with the core three-year goal outlined in GOOSE 1 to “increase stETH’s user value by increasing its utility as money” (GOOSE 1).

Questions:

  1. While true that the checks and balances on NEC are substantial and adhere to committees’ standardized operating procedures, we wonder why the forum is utilized as the medium to object when it appears like this process may be offloaded to easy track so the barrier for opponents is lower and visibility is increased?

  2. Does the NEC envision a standard reporting period where it dispels all of its accomplishments and challenges?

4 Likes
11

Hey-hey, thank you for the detailed comments and for raising these questions!

I would like to address the first one being the tech contributor to the Lido protocol and one of the Network Expansion Workgroup spokespersons, as you’ve rightfully noticed :slight_smile:

I see your point here, but delivering an on-chain solution tightened to the Easy Track that could work to ‘recognize’ bridge deployments utilizing quite different architectures and, sometimes, flavors under the hood is quite complex (considering research, development, reviews, audits, maintenance, alerting, etc.). This would push time-to-market even further while barely improving transparency in a broad sense, which feels quite the opposite of the proposal’s intent.

3 Likes
12

Thank you @BlockworksResearch for your reply!

There will be an aggregated report on the NEC’s work as a part of a yearly GOOSE retro community call.

6 Likes
13

Thank you for the quick response @TheDZhon!!

We understand and agree with your thoughts that time to market matters most! From a perspective of due diligence we felt like the question needed to be asked.

3 Likes
14

Snapshot vote started

The Establish the Network Expansion Committee (NEC) Snapshot has started! Please cast your votes before Thu, 28 Nov 2024 16:00:00 GMT :pray:

2 Likes
15

Hi @DeFiYaco, NEW → NEC members,

We are in strong favour of proposals that addresses automation, streamlining and efficiencies while not compromising on decentralised governance principles or security. We look forward to future integration including Unichain and Metis.

4 Likes
16

In general, the idea itself is good, but the decision on the dispute is very strange.

  1. Firstly, it is done in the most inconvenient way, which will contribute to the minimum number of votes against.
    I suggest making at least some kind of convenient interface for this.
  2. For some reason, delegations are not taken into account. It turns out that a delegate with millions of delegations will not be able to say anything against. I also suggest using not only personal LDOs, but also delegations.
  3. I understand the initial position on creating a committee without elections. But perhaps it is worth thinking about the period of authority of the committee and making a limitation, for example, for six months. Then a review of the members, and best of all elections to this committee.
  4. Nothing is said about payment for committee members. Is this work on a pro bono basis?
2 Likes
17

TokenLogic strongly supports proposals that prioritize automation and efficiency without forgetting about decentralized governance and security measures.
While the forum-based objection mechanism and annual reporting structure are adequate, there is room for improvement through more frequent updates (maybe quarterly ?). However, these considerations do not detract from the proposal’s value.

1 Like
18

While I support the proposal, and I trust and respect the NEW → NEC team :saluting_face: , I would push for this to become a thing. The DAO Ops team is doing a great effort to involve delegates onto the governance and I see ourselves (delegates) as kind of a “concerned citizen group” that has been given some legitimacy by the delegators. Hence, a delegate’s signature of that message should have the weight of the LDO delegated to that delegate to count towards the 100k LDO.

I understand that creating an interface might be overkill for something that I hope won’t be used at all, but I am also in favour of trying to unify the governance initiatives and I think just counting the delegations (even if it’s just manually) should be part of the dispute/appeal process.

5 Likes
19

Snapshot vote ended

The Establish the Network Expansion Committee (NEC) Snapshot vote concluded!
The results are:
Approve NEC: 58M LDO
Reject the proposal: 199K LDO

1 Like