[Lido Labs] GOOSE-3: Lido’s Next Chapter

[Lanski]

First of all, thanks for putting this proposal together.

Topic of the year: How do we navigate the tension between maintaining the current setup, continue making it safe and helping Ethereum (which have been largely achieved, but need to be upheld or we lose all competitive advantage) and finding new exciting avenues for revenue and relevance.

We get it, infra is boring and It’s cool to do hot shit in DeFi, but DeFi at large is a huge animal that needs to be scoped better.

Going step by step:

On the part of leading with staking I have no major problem with.

• stVaults have come so far we are not about to abandon them now, but the real meat is the ETP/Fs.
• My view is that we should really lean with all we have to ETPs.
  1. And I get it, it’s more of a BD effort instead of a titanic engineering feat, which is what Lido is used to, but it’s time to really take all that credibility we have built by being so safe and so established and leverage it beyond the boundaries of the crypto native ecosystem into TradFi.
• Note that this seems to be reflected in the corresponding EGG also submitted with the GOOSE

Also, let me be annoying with the stVaults as B2B2X: It’s great for distribution but encourages “private operator cluster + my compliance stack” rather than broad, permissionless operator diversity. We have spent so much time building CSM and diversifying the node operator set, just to push on the other side for big guns to create their products? How can we plug in the CSM set into “white label vaults”. And yes, I know it’s not white label but the point I’m trying to make is that we need a connection between making distribution easier for partners and connecting them with a decentralized node operator set.

Another way of raising this point would be: 1M ETH staked in stVaults sounds good but: What percentage of total protocol stake do we want in stVaults vs CSM / SDVT / Core, and how do we prevent the B2B side from eating all the oxygen and regressing back to a more centralized Lido?

Regarding the New Products section, I am afraid I agree with BCV’s analysis:

@BCV

Trying to expand into the broader DeFi space where large, established protocols with strong network effects and liquidity already exist(such as Morpho and Aave) would be inefficient. It would add unnecessary costs, complexity, and risks to the Lido brand. I think Lido Labs is overly optimistic about this mission.

I’m not trying to be a naysayer, we have to try new things, but I would be wary of trying to go head on with existing established protocols and find where we can be valuable.

For this, I half-disagree with Anthony though:

@Leuts

Small Bets: Fast, Focused, and Scalable
This is great, but unlikely to work within the current Lido operational setup. You can’t have your cake and eat it to. Every approval, every review that would be required from a Lido Foundation Labs executive would slow down and constrict the process. You need to externalise this. It adds risk but increases the reward. You simply have to ensure that Lido and LDO have upside in these small bets.

Half disagree because I actually think externalizing these bets is a good idea. Nevertheless, Lido has excellent track record on finding this ONE thing that is hard to do safely at scale and executing, and at least some resources should be invested in finding this ONE thing in DeFi (maybe RWA?) that Lido can execute better than anyone and building on the experience of the first product, stETH.

Overall, I would encourage to lean ETP/Fs, think careful about the Node Operator set and how to keep it decentralized, be careful on spending resources wildly on DeFi but experimenting, (maybe externalizing?) and waiting until that opportunity to replicate success in the proven Lido formula.