Hello @LayerZeroLabs,
It’s truly invigorating to see community-driven initiatives fostering such rich dialogue.
I’m reaching out as a contributor to the Lido on Ethereum core protocol and a member of the network expansion workgroup (NEW), hoping to share some insights and perhaps broaden our discussion before moving towards a formal decision-making process.
The Case for Native Bridges
The integration of wstETH across various ecosystems is a natural progression in Ethereum’s scaling journey. It’s quite common assumption that assets minted on L2 rollups typically align with the rollup’s security model. This is particularly significant, given the considerable efforts by foundations and DAOs to ensure a canonical representation of wstETH via native rollup bridges (as seen in the previously ratified proposals for Optimism, Abitrum, Polygon, and more recent, unapproved yet proposals for Base and zkSync).
While acknowledging that token bridging is inherently permissionless and open, there’s a concern that multiple token representations could fragment liquidity and degrade the user experience for token holders and rollup users. In this context, I lean towards supporting a native bridge solution specifically for Scroll.
Security Assessment and Risk Management
A thorough security assessment of the proposed solution, including architecture analysis, impact evaluation on the core protocol, and a review of deployment artifacts and governance mechanisms, has been conducted or scheduled neither by Lido DAO contributors nor independent security experts on the particular request. Highlighting this is crucial, especially when considering the potential for an endorsement proposal.
The mentioned native L2 bridge solutions for wstETH employ a ‘lock-and-mint’ architecture, offer the advantage of not exposing the protocol’s Total Value Locked (TVL) and its associated staker risks beyond L1, unless users explicitly opt for it. Alternative approaches like ‘burn-and-mint’ could necessitate additional operational complexities, such as transfer rate limitations and caps and their precise uninterruptable management (a concern raised in the ERC-7281: Sovereign Bridged Tokens discussion).
Considering a Phased Approach
The current proposal suggests the simultaneous endorsement of three networks. I have reservations about this approach and believe a more measured, pilot-based strategy might be more prudent, especially when considering each network’s unique attributes and needs.
Proposed Next Steps
With these considerations in mind, I propose the following:
- Extend the discussion period by at least another week before any snapshot is taken, possibly revising the scope. This might include not just omitting Scroll but perhaps concentrating the efforts on a single network, such as Avalanche, to begin with.
- Maybe it is worth initiating a separate, informal poll or discussion to gauge better the Lido DAO community’s sentiment towards favoring native bridges.