Ryan Berckmans, Ethereum investor and community member, and Alexandre Bergeron, Bitcoin investor, discuss Lido’s dominance as a liquid staking provider, whether that issue can be resolved, and how it could be a centralizing force for Ethereum.


Show highlights:

  • what stETH is, what the uses cases are for stETH, and why it is important
  • how Lido had a first-mover advantage and how that kicked off network effects
  • whether the liquid staking derivatives system is one of a “winner-take-all”
  • how much of the staked ETH will be turned into a liquid staking derivative
  • how Lido might have a huge MEV opportunity after the Merge
  • what the proposer-builder separation is
  • whether Lido’s dominance will increase over time
  • whether other competitors have been competitive with Lido
  • why Lido is a natural monopoly because of the incentives and MEV opportunities
  • what the implication of Lido’s monopoly is for Ethereum’s censorship resistance
  • whether Lido is effectively a single entity despite having multiple node operators
  • whether there could be a long waiting period for becoming a validator after the Merge
  • how Lido is moving its staking derivatives to other chains
  • how Lido’s new dual-governance proposal works, why it might be useful to decentralize Lido and whether it reduces the power of LDO token holders
  • how Lido’s centralization is the biggest threat to Ethereum in the long term and what are the possible solutions
  • why Ryan believes the value of ETH comes from its credible neutrality and whether Lido’s centralization may jeopardize that
  • whether finding solutions around MEV opportunities is a good way to reduce Lido’s monopoly
  • whether Lido’s competitors could form an alliance and build a tokenized basket of their staking derivatives to compete with Lido
  • whether Lido could airdrop the LDO token to all ETH holders to decentralize its governance token


Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://www.avax.network/

Oasis: https://oasisprotocol.org/grant-programs?utm_source=unchained&utm_medium=partnership&utm_campaign=podcast-oasis-grants-program




Lido’s Centralization:

Lido’s Governance Proposals



Read the episode transcript here