Additionally, I think targeting a much higher capitalization/insurance buffer (0.2-1%, ~12,000-60,000 ETH based on current circulation) before distributing earnings makes sense. And this insurance backstop could theoretically be put to use providing liquidity in Curve or Balancer stable LP, which can reduce Lido’s operating costs linked with liquidity mining.
I agree with this. Think Lido needs more insurance as TVL grows at a fast rate but I don’t understand why Lido DAO (LDO holders) are the only ones who needs to pay for it from their 5% take. Imo to grow the insurance pool it’s important to introduce another parameter in terms of NOs stake rather than solely squeezing out DAO.
Its insane how social slashing still isn’t implemented here and why no one has brought it up. Just few weeks ago the RockLogic GmbH slashing incident occurred and I think its a great time for the DAO to realize that they are sharing 5% of the revenue with NOs and these NOs should contribute to more aspects of the protocol like insurance fund and posting some collateral to have skin in the game and show confidence in their own capabilities.
Running nodes isn’t a big favor when you’re making insane margin of profits at the expense of holders. There’s huge misalignment there imo