Hi everyone,
Nemo here, Lido alliance contributor.
Twyne is expected to go live in the next few months and would still need to pass all the standard security checks and necessary market tests before being publicly endorsed by Lido Alliance.
A few words on bets:
I’m sure many of you either know or sympathize with founder pains and the innate entropy of being an upstart. Protocol success is never formulaic - so many moving pieces and conflicting factors need to align and come together at just the right time, as they have for Lido itself. It’s really hard to predict or bet on future outcomes.
Instead what made me propose Twyne as the next Alliance member is a combination of their ethos, technical expertise, risk management, math and industry prowess. While their future is unknowable, the foundation is rock solid. Also, being an Alliance member has never meant nor will mean that Lido is unable to nurture protocol relations or explore mutual interests with any other ecosystem project.
Regarding Twyne,
Back in 2023 I personally met Twyne’s technical contributors as core members of yAcademy, a security-oriented team spun out of the Yearn ecosystem. I also had several long chats with Twyne’s econ/math brains around ethcc Brussels last year. What first drew my attention is their focus on aggregation and capital efficiency in the greater context of lending. With n+1 new chains and flavors of lending protocols, I see bottlenecks start to compound, so Twyne’s elevator pitch checked out for me. That plus my confidence in their team’s technical ability made me begin to explore synergies between Twyne and Lido Alliance.
So with that, let me add few more details from workgroup review
Twyne - Alliance Workgroup Review
Key Terms
Ethereum-alignment and commitment to decentralize validation
If stETH gains wide adoption as a base asset within Twyne, the growth of credit delegation will directly contribute to expanding stETH’s role as collateral across DeFi. This not only enhances capital efficiency but also strengthens Ethereum’s decentralization by supporting a more diverse set of node operators through increased stETH demand.
Use-cases for stETH adoption and integration
stETH currently lacks native lending yield and is primarily utilized in lending markets to leverage staking returns. While these strategies serve as effective token sinks and provide viable opportunities for stETH holders, their scope remains narrow. Credit delegation unlocks a broader range of yield opportunities, allowing stETH to support a wider set of use cases within lending protocols.
Tailored integrations—like Aave’s e-mode, which enables more efficient leveraged staking—have already demonstrated the value of specialized integrations. Through our incubation efforts, we aim to continue this trajectory by designing new, protocol-specific solutions that further extend stETH’s utility.
Use-case for other lido alliance members
Credit delegation enables leverage to be extended to virtually any asset. Within the Lido Alliance, this includes liquid restaking tokens (LRTs), yield strategies from protocols like Mellow, and governance tokens of member projects. By simply holding stETH and delegating borrowing power, the Alliance can catalyze ecosystem growth without selling assets—bootstrapping liquidity and market activity in a capital-efficient way.
Alternatives such as submitting governance proposals to protocols like Aave to list new assets—are time-consuming and rarely successful. Alternatively, using permissionless markets like Morpho or Euler provides more flexibility but requires seeding all necessary tokens and bootstrapping liquidity from scratch. Credit delegation offers a more streamlined path: it allows stETH holders to extend their lending terms to new assets, enabling LRTs to access similar interest rates and borrowable token sets without needing to go through the usual processes.
Security Review
Please see “Security Culture” section here for further detail. We will also ask GRAPPA for their opinion now and after audit reports once again.
What are the processes for putting code into production?
What is the release flow from the security perspective?
- Freeze feature changes; enter “bug fix only” mode. Code simplification allowed, but no increase in code complexity beyond this point
- Achieve >95% code coverage, including branch coverage
- Update fuzzing suite (originally created during a prior engagement with Enigma Dark). Ensure fuzzing coverage matches the original benchmark.
- Perform internal security review
- Conduct external security audit(s)
- Address all security findings and complete mitigation review with the same auditor(s)
How does the team decide the code is ready for mainnet?
- The above security process is complete.
- Front-end end-to-end testing confirms all user flows are working with the latest contract code, using (unverified) contracts deployed to the same chain intended for production. This deployment also tests the deploy scripts in a production-like environment, including correct setup of governance addresses. This marks their internal testing period; they also test their monitoring infrastructure on this deployment.
- The internal risk modeling team verifies that the governance parameters chosen for launch meet expectations given current market conditions.
- They deploy the code and test full user flows themselves before announcing deployment publicly. Spot checks are performed to ensure all governance-set variables meet expectations.
Does the protocol have public audits? What parties conducted the audits?
- They are in the process of finalizing audit partners—Enigma for fuzzing and automated testing, and yAudit (now Electisec) for a comprehensive code review.
- The core development team brings years of experience as auditors themselves and maintains a strong focus on security throughout the development process.
What’s the issue summary (total issues / total fixed / crits and highs / crits and highs fixed)
- NA
How is the deployment verified against the audit?
- NA
What are the processes for managing security through TVL growth?
Is there a bug bounty? if yes — which and where
- Not yet announced, but Twyne plans to implement a bug-bounty on Immunefi for Twyne’s mainnet.
Are there limits / thresholds on the project / TVL? Who controls those?
- TVL will ramp up gradually, initially hard-coded to a ~$3M cap, and will be adjusted over time alongside increased bug bounty incentives.
- The team will whitelist underlying lending pools to optimize integrations and manage risk.
- While technically feasible today, risk curators will be introduced at a later stage.
- Control over upgradeable parameters is still TBD. If applicable, a multisig—potentially with Lido Alliance representation or other respectable market participants—will act as the initial governing entity.
Are there any user funds on a multisig?
- No
Is the code upgradable? How and who controls upgradability?
- TBD (as Twyne is in testing)
- If there are any upgradeable contracts, a multi-sig, which Lido Alliance can have seats on, will be the initial controlling party.
What is the likelihood that the project will endure?
Is the project incorporated? How the legal structure looks like?
- Twyne DevCo OÜ is the development entity responsible for building the software.
- Twyne Association will be responsible for issuing the token and overseeing DAO governance.
What’s the funding situation?
- Summer 2024 - initial pre-seed round investors are Euler Finance and Daedalus, with participation from additional angel investors.
- Early 2025 - They are currently finalising legal work for their Pre-Seed & Seed Round (so can’t disclose publicly), which is being led by a top-tier VC, with a second VC joining to complete the raise. Team will publicly disclose names after legal process is being done.
What is the team size?
- Team of 6 and expanding soon
Is the code open source? What’s the license?
- Not yet, but the audits reports and protocol launch are expected within the next 60 days
Executive Summary
| Dimension | Conclusion |
|---|---|
| Security Evaluation | Commitment to run testnet launch, as well as having the public audit report and bug bounty upon any launch |
| Ethereum Decentralization | Indirect, with growth of stETH positive |
| stETH Adoption | Direct, very positive |
| Benefits to Node Operators | Indirect, neutral |
Recommendation: Accept
The Alliance Workgroup recommends accepting Twyne and endorsing it for the Lido Alliance.