I see your points but I respectfully disagree, yes we should probably spend a lot of time and effort scaling horizontally but we should also think about ecosystem expansion and vertical scaling. I am of the belief that verticalization will ultimately be how you actually extract fees because at any point in time, whoever captures the end user will be able to create their own versions of lending, dexes, staking, etc. - just look at exchanges and how much money they are making. They don’t just offer trading, they started with that but now it’s pretty much go to them and get whatever you want - trading, staking, yield strategies, launchpads, wallets, they even have their own chains now.
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Ecosystem expansion: Yes there is more competition and yes other protocols can use tokens as a way to attract TVL. However, if Lido becomes profitable we can use real profit to attract TVL and compete with other ecosystem competitors. This is a win win because a) users generally prefer real yield and more importantly b) real yield is significantly more sustainable than emitting tokens. If competitors are forced to emit tokens as a way to maintain TVL then they risk flooding the market with too many tokens and thus crashing their token price, which optically would be bad and could also destroy moral of their community. So if Lido can use profits to subsidize growth in other areas, I’m actually not worried about competition at all, similar to how Amazon uses their profits from cloud to subsidize their marketplace product to outcompete their competitors.
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stETH product: I also disagree, there may not seem like a big demand today but there’s evidence that for a product like Pendle there are literally billions of dollars worth of these types of products in traditional finance that are based off of treasuries, and I don’t see why if Ethereum succeeds, the same won’t happen with staked ETH and why lido should preclude itself from being a part of creating those products. Also since lido owns the smart contracts to stETH there are likely ways to create the product that make it safer for users vs. another protocol building on top of stETH. Plus, a lot of the code is already out there and open sourced for building this so it’s not like you need to invest the same amount of money/effort to do it, you just need to be a follower and wait for the leaders to pave the way - e.g. most dexes and uniswap strategy, with the main difference here being that lido and stETH are actually the market leader and own most of the stETH liquid market