This proposal is a little early since the protocol just released staking and also that there are no current ETH rewards (deposit queue which new validators will be confirmed by around January).
The motto of Lido is a liquid staking solution to Ethereum that does not require the 32 ETH deposit minimum nor does it require a lock-up period in which a user cannot unstake their ETH.
To guarantee that a user can unstake their ETH, a stETH/ETH pool should be maintained at a 1:1 basis.
- With official Ethereum 2.0 staking, participants cant unstake their claim until Ethereum moves onto Phase 1.
- Users who want to stake in Lido (advertised as a liquid solution) will want to be able to unstake their ETH. How is this possible? They will use the stETH/ETH pool which is maintained at a 1:1 basis. As an alternative, you can ‘unstake’ your ETH by swapping your stETH back to ETH.
- A stETH/ETH pool is necessary for the mechanism to work. If there is no liquidity then nobody can unstake. Lido is the liquid solution to Ethereum 2.0.
I propose to distribute a portion of the 36% of the LDO token supply–which is currently held in the treasury–to people who staked their ETH for stETH in the recent launch, supplying their ETH to the stETH/ETH pool. Since there was a mention of no airdrops, no sales, ICO, IEO, etc, I think the simplest solution is to also designate a portion of the supply to farm the LDO token via LP strategies, in that way, people will be incentivized to keep Lido liquid, where participants can unstake their ETH at any time.
I have also mentioned before that it would be interesting for users to farm the LDO token using other DeFi respective protocol tokens Lido intends to integrate with. Farm LDO with CRV, BOND, AAVE, SNX, YFI etc… Every DeFi protocol that intends to use an ETH liquid solution.