Proposal: Introducing $LDO Staking

Proposals
35

Hello all! Thanks for this deeply informative discussion. This proposal is a good first attempt at adding more utility to the LDO token and aligning the interests of stakeholders. However, I agree with all who hold the sentiment that it’s still a bit too early to consider direct revenue sharing without giving adequate time for ongoing initiatives such as partnerships and integrations to begin impacting the protocol’s revenue and liquidity significantly thus increasing Lido’s competitive advantage, and for the DAO itself to mature by addressing current operational lapses.

Some points of particular interest to me:

  1. Node Operators and Insurance Buffer: The suggestion to increase the insurance buffer before distributing earnings is prudent given the very rapid TVL growth of Lido. It is equally important to consider the role of Node Operators in contributing to this insurance buffer considering their high-profit margins. However, requiring NOs to hold a significant amount of LDO or ETH as collateral might unintentionally create a high barrier to entry and lead to churn. A better approach might be to introduce a sliding scale system, where NOs contribute a fraction of their earnings to the insurance fund. This ensures they have skin in the game while still keeping the door open for smaller operators.
  2. Buybacks: I don’t think the model of LDO buybacks leads to any significant realized profit for holders so I agree with discarding this idea.
  3. Reputation Scoring System: The prospect of a reputation scoring system for NOs is pretty interesting. While I agree that reputation should not be bought, we could instead consider basing the scoring system on factors like performance history, uptime, and community engagement.
  4. Dual staking: I think the creation of an 80/20 LDO/WETH pool on Balancer as a second staking option is a great move for deepening liquidity
  5. Community Building around the Staking Router: The introduction of the staking router with Lido V2 is an exciting development, and building a diverse validator ecosystem around it is key. Looking forward to seeing the Lido Community Lifeguards initiative take flight to support this.

Keep the ideas and opinions coming! Excited to see the evolution of this discussion.

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