In the Recent Crypto Market Meltdown, What Role Did Lido's stETH Play? - Ep. 370

Unchained

English - July 05, 2022 02:30 - 1 hour - ★★★★★ - 1.2K ratings
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Hasu, strategic advisor to Lido, and Tarun Chitra, founder of Gauntlet, explain everything about staked ETH, aka stETH, how it should be priced, Lido’s market dominance, and much more. Show highlights:

the role of Lido, what stETH is, and what its benefits are

whether Ethereum’s lack of delegated proof of stake contributes to the need for stETH

why stETH is not mispriced and why it doesn’t necessarily have to be worth 1 ETH

the inherent risks associated with stETH

how there was not enough liquidity to handle all the liquidations, especially in automated vaults on, for instance, Instadapp

how automated market makers work and what Curve’s amplification factor is

whether 3AC and Celsius had a significant impact on the stETH/ETH “de-peg”

how does the Merge affect the liquidity of stETH

Hasu’s and Tarun’s level of confidence that the Merge will happen this year and whether it will be a success

what will happen to the price of stETH after the redemptions are enabled

why Lido has achieved such a level of dominance

how Lido decreases the cost of staking and helps improve the security of the Ethereum blockchain

whether there is going to be a “winner take all” in the liquid staking derivatives market

how liquidity fragmentation can cause the system to blow up

why LDO tokenholders might not have the same incentives as ETH tokenholders

what is Lido’s new dual governance model and what is it trying to achieve

whether Lido should self limit its market dominance

how Lido coordinates validators and the role of the LDO token in this coordination

what are the lessons to be learned from the stETH situation

how governance is a liability to DeFi protocols

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

EPISODE LINKS

Hasu:

Twitter: https://twitter.com/hasufl

Uncommon Core Podcast: http://uncommoncore.co/podcast/

Tarun:
Twitter: https://twitter.com/tarunchitra

stETH

Lido’s explanation: https://twitter.com/LidoFinance/status/1535184472546889735?s=20&t=oQeB1uj7HG7Y4he-0gbcLg

Lido’s explanation #2: https://twitter.com/LidoFinance/status/1536756933054676992?s=20&t=oQeB1uj7HG7Y4he-0gbcLg

Hasu’s thread #1: https://twitter.com/hasufl/status/1524717773959700481?s=20&t=oQeB1uj7HG7Y4he-0gbcLg

Hasu’s thread #2: https://twitter.com/hasufl/status/1525427069198508033?s=20&t=oQeB1uj7HG7Y4he-0gbcLg

Tarun’s take: https://twitter.com/tarunchitra/status/1538775828573609985?s=20&t=oQeB1uj7HG7Y4he-0gbcLg

Tarun’s paper: Why Stake when you can borrow: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3629988

Lido

Self-limit?: https://twitter.com/LidoFinance/status/1540258690942615555?s=20&t=sJU5C5xo5litEJrZZDaWNQ

Hasu on Lido’s dual governance proposal: https://twitter.com/hasufl/status/1540652075352313857?s=20&t=sJU5C5xo5litEJrZZDaWNQ

Lido’s two phase voting scheme :https://blog.lido.fi/moving-to-two-phase-voting/

Previous Unchained Coverage on DAO governance: Solend and Bancor Drama: Did These DAOs Violate the Ethos of Crypto?: https://unchainedpodcast.com/solend-and-bancor-drama-did-these-daos-violate-the-ethos-of-crypto-ep-366/

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the role of Lido, what stETH is, and what its benefits are
whether Ethereum’s lack of delegated proof of stake contributes to the need for stETH
why stETH is not mispriced and why it doesn’t necessarily have to be worth 1 ETH
the inherent risks associated with stETH
how there was not enough liquidity to handle all the liquidations, especially in automated vaults on, for instance, Instadapp
how automated market makers work and what Curve’s amplification factor is
whether 3AC and Celsius had a significant impact on the stETH/ETH “de-peg”
how does the Merge affect the liquidity of stETH
Hasu’s and Tarun’s level of confidence that the Merge will happen this year and whether it will be a success
what will happen to the price of stETH after the redemptions are enabled
why Lido has achieved such a level of dominance
how Lido decreases the cost of staking and helps improve the security of the Ethereum blockchain
whether there is going to be a “winner take all” in the liquid staking derivatives market
how liquidity fragmentation can cause the system to blow up
why LDO tokenholders might not have the same incentives as ETH tokenholders
what is Lido’s new dual governance model and what is it trying to achieve
whether Lido should self limit its market dominance
how Lido coordinates validators and the role of the LDO token in this coordination
what are the lessons to be learned from the stETH situation
how governance is a liability to DeFi protocols

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

EPISODE LINKS

Hasu:

Twitter: https://twitter.com/hasufl

Uncommon Core Podcast: http://uncommoncore.co/podcast/

Tarun:

Twitter: https://twitter.com/tarunchitra

stETH

Lido’s explanation: https://twitter.com/LidoFinance/status/1535184472546889735?s=20&t=oQeB1uj7HG7Y4he-0gbcLg