Lido on Solana - Proposed Transition from Chorus One to P2P

Hi all,

This is a draft for a proposed update to the Lido on Solana arrangement between the Lido DAO and Chorus One that was accepted via a Snapshot governance vote on May 10, 2021. It concerns the transition of the Lido for Solana project and codebase from Chorus One to the P2P team, an associated transfer of the revenue share agreement, and an update to the milestone-based payment structure.

After a round of feedback, Chorus One and P2P plan to bring this proposal jointly forward as a Snapshot vote the week of Monday April 4th.

Background

Chorus One is terminating its existing software development engagements that are unrelated to node operation to fully focus on its staking infrastructure business. This also includes Lido for Solana, a project that came into existence based on the above linked Snapshot vote. In the course of leading the Lido for Solana project over the last year we, the Chorus One team, came to realize that the initially devised incentive structure does not allow us to adequately resource and take ownership of the Lido for Solana project. In our opinion, the initial proposal was malformed provided the scope of the project and the challenges involved in a novel DAO-governed cross-chain liquid staking protocol and product. These factors combined are among the ones that led us to the decision to transition the Lido for Solana project to another team within the Lido DAO. Following the completion of the transition which this proposal elaborates on, Chorus One will continue to be an active participant and supporter of the Lido DAO and all its liquid staking products in the form of a node operation and governance.

Since our decision, we have been in close collaboration with a team within P2P that decided to take on the challenge to begin transitioning key elements of the project and enabling a smooth handover without compromising the security or operation of the Lido for Solana protocol in any form. This process will continue over the coming quarters (more details below).

In addition, Chorus One is also committed to continue to support Lido for Solana by delivering a key integration through the bSOL integration into Terra’s Anchor Protocol.

The proposed updated arrangement seeks to formalize the transition of the Lido for Solana project from Chorus One to P2P by updating the incentive structure enabling P2P to align with the goals of the Lido DAO for the Lido for Solana project at large, and enabling Chorus One to adequately support the transition, as well as to be compensated for the work and value delivered to the Lido DAO.

Why P2P?

P2P has been an active participant in the Solana ecosystem since day one. The team is one of Solana’s leading validators, with over $400m under management, and supports the infrastructure for significant ecosystem projects such as Wormhole Bridge, Pyth, and Neon EVM.

P2P has pioneered the PoS space since 2018, and leverages its experience and gained expertise to continuously improve the quality of validation while focusing on the decentralization of the networks they work with. Their proficiency is proven through their research papers on Downtime and Skip Rate (more to come), created to improve Solana’s validators performances.

P2P has a dedicated, highly skilled team entirely focused on achieving results to advance stSOL inside and outside the ecosystem. The team is determined to build a sustainable, high-performance pool of validators, educate the community, and increase DeFi TVL.

Proposed Structure Changes

If accepted in a Snapshot vote planned to be issued in the week of April 4th, the following structure changes will replace the revenue share and milestone-based incentive payment to Chorus One accepted by the Lido DAO in the initial Snapshot vote.

Situation

As it stands (Mar 25), Lido for Solana has accrued 3.25m SOL (~$340m) in TVL corresponding to 0.8% of the value staked in Solana. Based on the initially accepted proposal, Chorus One has so far only received roughly $25,000 through the revenue share, and has accrued cost in excess of $1m to facilitate the development of the Lido for Solana program, front-end components, initial GTM, work on various integrations including integration into Terra’s Anchor Protocol, audits, marketing, as well as other operational elements such as multisig and validator management.

Milestone Payment

This proposal seeks to introduce a one-off payment of 650,000 LDO payable to Chorus One upon the passing of this proposal to compensate for the development efforts, the value provided to the Lido DAO (as measured by the TVL achieved), and the support work related to transitioning Lido for Solana operations to the P2P team. The suggested LDO in question will be subject to a 2 year linear vesting structure to further guarantee that Chorus One stays aligned with the Lido DAO and supports the transition to the P2P team.

Proposed Updated Revenue Share Agreement and Milestone Incentive Structure
Furthermore, we propose to update the proposal structure in the following ways:

During the transitioning phase from P2P to Lido, 20% of the fee portion going to the Lido DAO treasury goes 80% to P2P and 20% to Chorus. After ownership transferring is complete 100% of the fee revenue share will go to P2P.

Finally, we propose to update the milestone-based incentive structure. In the table below, staking market share milestones are defined as the relation between total SOL value deposited in Lido for Solana ($stSOL market capitalization) versus total SOL actively staked on the Solana network overall and milestones need to hold true for at must be held on average across at least 30 days, to account for variability in the data.

Market share LDO Distribution Vesting terms
1% 300,000 150,000 to C1, 150,000 to P2P 2 years
2% 200,000 50,000 to C1, 150,000 to P2P 2 years
3% 200,000 50,000 to C1, 150,000 to P2P 2 years
4% 200,000 50,000 to C1, 150,000 to P2P 2 years
5% 200,000 50,000 to C1, 150,000 to P2P 2 years
10% 500,000 500,000 to P2P 2 years
15% 500,000 500,000 to P2P 2 years
Total LDO 2,100,000 350,000 to C1, 1,750,000 to P2P

Ownership Transfer Items and Hypothesized Timeline

The following breakdown contains ownership transfer items and associated timelines and agreed upon deliverables.

Q1/2 2022

  • Transferring front-end development to P2P
  • Transferring validators management tasks to P2P
  • Transferring analytics (pool, validators) to P2P
  • Transferring operations task to P2P (partly)
  • Chorus One is finalizing work on Anchor integration
  • Chorus One frontend/smart-contract dev part-time;
  • Smart-contract support from Chorus One (no new features)

Q2 2022

  • Release of the Anchor integration and transfer of knowledge to P2P
  • Transferring initial onboarding of validators to P2P
  • Transferring multisig operation management to P2P
  • Transferring rewards distribution operations to P2P
  • Up to 5 hours of week of smart contract development and assisting/advising from Chorus One
  • Support on the tasks that were in Q1 from Chorus One

Q3 2022

  • Fully transfer smart-contracts development to P2P;
  • Transferring DAO governance management (making and implementing proposal) to P2P
  • Up to 5 hours of week of smart contract development and assisting/advising/audit from Chorus One;
  • Support on the tasks that were in Q2 from Chorus One

This proposal was written in collaboration with the P2P team.

Felix in the name of the Chorus One team

4 Likes

any person who comes to u asking for 1 year vesting to “stay aligned with the … DAO” is not trying to stay aligned w the DAO. they are looking to dump asap … why not 4 year vesting ← this makes u aligned long term.

you are asking for 650k LDO tokens, which is over $2 mm usd at current price …

why does this require $2 mm usd? can you outline that?

This proposal contains some retroactive reimbursement portion, as in the initial proposal (which we are replacing here to allow for the described transition to take place) the first compensation milestone was set at a 2.5% market share. The future work items contained are highlighted at the bottom of the draft. Hope this helps

3 Likes

as a non technical person in the dao who holds a lot of LDO, idk how to quantify this work … $2 mm usd strikes me as a lot but maybe its not … but 1 year vesting is absurd.

u are not “aligned” with the dao w/ 1 year vesting.

1 Like

Reminder that we will put this up for vote on Monday, for anyone that is still planning to give feedback please do so over the weekend.

@LIDO - will take into account your feedback. We are long-term supporters of LDO since genesis and surely don’t want that detail to hold back the success of this transition.

1 Like

What amount of stSOL would represent 1% market share based off current state? Appears the amount of active staked SOL is around 393M, but I would imagine much of this is locked supply and thus is not factored into the market share calculation? I agree that 2.5% was far too high of a hurdle in the original proposal and glad to see the improvements made here. Just curious to understand how much stSOL supply would need to grow in order to trigger the first milestone payment. Thanks!

3 Likes

if ur long term supporters, have a longer lock up

words are not real

Thanks for the feedback.

393.3m SOL is currently staked. Lido has 3.28m as of now (https://solana.lido.fi/). So we’re at 0.83% as of now. Meaning roughly 650k SOL (currently $88m worth) will need to be staked through Lido on Solana for hitting that milestone. I’d say it could be reasonable to assume that with the Anchor integration going live soon this would likely be hit then.

1 Like

Thanks so much that’s really helpful and totally agree that milestone will likely be triggered shortly after the bSOL integration. One more question if you wouldn’t mind. I’m glad to see that this milestone structure more or less aligns to the more recent proposals such as Lido for Polygon and AVAX, but could you speak to the logic behind having milestone payments of 300K LDO per 1% mrkshare instead of 200K (AVAX proposal) or 100K (Polygon)? Do the differences roughly align to the USD value of all staked assets across the respective networks? e.g. Solana staking TAM is $50B vs AVAX at $21B therefore 1% of marketshare captured on Solana is worth >2x in USD terms vs 1% of AVAX marketshare?

2 Likes

Totally right, Solana currently is one of the biggest markets for Lido and 1% market share corresponds to a much higher TVL in $ terms (and in turn also value for the Lido DAO) vs the other integrations. It should also be noted that during the transition phase two teams are working on this, which lead us to the devised structure.

We have now published the proposal on Snapshot (updated to 2yr vesting for all LDO payments). Voting will run until the end of this week:

https://snapshot.org/#/lido-snapshot.eth/proposal/0x2a75340e4bd00afd2600bf47e4219ddea8fc83b6af4086365a7842ae5443c343

Thanks everyone for the feedback!

1 Like

This proposal has reached quorum and passed today. Thanks everyone for their feedback and support!

3 Likes

Hi!
We are planning a transfer and need a signed message with an address where to transfer 650,000 LDO
And what is a start date for the vesting?

Hey Ekaterina, we’re going to share the address+proof by Monday morning, so it’s in time for the next omnibus

2 Likes

Following the approval of this proposal, we would like to share the Chorus One address we want to use to receive associated milestone payments on this thread.

The address is:

0x3983083d7fa05f66b175f282ffd83e0d861c777a

We sent transactions to and from this address from our Lido operator address to confirm that it’s ours (check memo field to confirm):

Best,
Felix

@zuzu_eeka

1 Like

Thank you, Felix!
We are planning this payment for the next omnibus.

upd. Start date of the next omnibus will be announced later

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Hi, @FelixLts!
Omnibus will start tomorrow at 2PM UTC. The vote will last 72 hours.

We are going to set the following vesting parameters:
start: Apr 10, 2022, 11:00 PM UTC (it’s the end of Snapshot voting)
end: Apr 10, 2024, 11:00 PM UTC
cliff: Apr 10, 2022, 11:00 PM UTC (the same as start date)

2 Likes

The Aragon voting has started

2 Likes