With all due respect, avoiding difficult problems is not what we’re about, nor what Hasu is getting at. Quite the opposite in fact. The path he’s suggesting is a much longer and gruelling one. One that does not buy us any friends in the short term.
Nor is neutrality simply an honourable goal. It is essential to a world in which agreements can be enforced without violence, the pursuit of which is a core part of Lido’s purpose.
For me, this is about staying true to the DAO’s core ethos and guiding principles, which is arguably the much harder thing to do in the face of public pressure to compromise on them.
The guiding principle that is perhaps most relevant to this request is the following:
Self-regulate through technology and incentives, not laws and promises.
Even if it is by far the more gruelling path, I believe that Lido DAO should favor self-regulating through cryptography and incentives (market-forces), rather than laws and promises.
To paraphrase Nikolai Mushegian, we should respect incentives as natural law. For in a system that is open for the whole world to interact with, incentives are not just a suggestion; they are more akin to physical laws, like gravity or entropy. If there is even one part of the system that is not incentive-compatible, it is only a matter of time until it is exploited. In this sense, fixes that don’t serve to align the relevant incentives that led to the issue in the first place are a strategic error.
With respect to your speculative claims:
If Lido takes a policy of neutrality… I would expect some other liquid staking providers may use this as a differentiator to gain market share
My perspective here is that credibly neutral protocols are so incredibly difficult to get right that those that do make it will always have a competitive advantage vs the rest, and so will always be in demand. This is especially true in this current geopolitical climate, where increasing political polarization and instrumentalization of the rule of law has resulted in a scarcity of neutrality across all countries and the systems they depend on.
In Nikolai’s words again:
Credible neutrality is a competitive advantage. Even if it takes longer to scale, a sound and credibly neutral system will ultimately win out… Teams that try fiddling with incentives and see short-term results fail to realize just how much capital is waiting on the sidelines, unwilling to commit to a mechanism where the developers still have so much control.