Respect the Pump

Lido is an amazing protocol.

Due to its first mover advantage and solid execution, Lido has a monopoly over liquid staking, and has a clear shot at controlling over 50% of all staked ether post merge.

I propose that the team needs to be more aligned with the LDO holders at large.

In traditional companies, the employees are tasked with driving shareholder value via either a rising share price, or dividends, or both. Successful CEOs make a majority of their money from stock packages. I think that LDO should operate similarly.

I propose increasing the total compensation of the entire Lido team by 20%, but changing the USD to LDO weighting. This percentage should decrease with higher salaried employees.

An employee that believes in the strength of LDO should have no problem with this. It’s a pay increase, after all.

Having more of the compensation tied to LDO should help the current employees think like LDO holders, always thinking of how we can drive value to LDO.

I realize that bills still need to be paid, so I’m not sure what the weighting should be per level. If anyone thinks this is a good idea, they can give input below.



I understand the appeal of aligning incentives, but the impact on LDO price of any given employee is small. You are putting a significant portion of their pay to the whims of the market and performance of their coworkers. For an employee, it generally makes more sense to diversify as if their employer hits hard times then they get laid off and their savings are going to be down significantly. Which means that you will end up having to pay a good bit more to compensate employees for this risk.

Now some vesting can still be useful, particularly as a way to defer costs when the company is a cash-strapped startup, but it should not be a major factor in pay unless the employee is high up.