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Q🎩
@qsteak.eth
Regarding the Lido stake holdings, which of this do you think is actually the biggest lift? - Convince Lido to self limit. - Vampire by offering real incentives to exchange stETH. - Implement an enshrined solution. - Accept the market decision, and compel Lido to truly decentralize via governance or social slashing.
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Thomas
@aviationdoctor.eth
Great topic. IMHO: 1 is a pipe dream 2 is the next best thing after 3. 3 (protocol-level MEV smoothing) would reduce some but not enough of the LST appeal (simplicity over solo staking). 4 hell no, I care about credible neutrality And I would add: 5 Forster innovative competition in the LST space to eat Lido’s lunch
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Q🎩
@qsteak.eth
Def like 5. I’ve wondered about reshuffling. Say a hot new LST comes up and half of current stETH want to switch. Wouldn’t the adversarial response be to borrow the required ETH for repayment, not unstake, keep market share, and pay the loan via the yield. Probably a little lopsided, but what’s the value of size?
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Thomas
@aviationdoctor.eth
Technically nothing prevents Lido from doing that already today (assuming the loan is covered by the yield). But with the typical collateral ratio at 200%, it means you’re locking up more ETH in collateral than you are borrowing to stake, so it’d be more economical to just stake. Borrowing works if you go to fiat
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Q🎩
@qsteak.eth
Do they not have sufficient LDO as additional collateral? Get a DAI loan with Maker, swap to ETH, send to withdrawer. I can’t pretend to understand the economics but if one takes the long term view isn’t 2x worth control of the network?
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Thomas
@aviationdoctor.eth
I don’t know of any protocol that accepts LDO as collateral (Maker doesn’t). So Lido would have to be rich in some mainstream collateralizable token such as DAI or BTC. But then they’d have to borrow ETH to stake it and the rates are typically 4–5%. Might as well then convert that token to ETH & stake directly.
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