[Lido] [FINAL] [STIP - Round 1]

Or maybe to adjust your timeline and grant requested. Other projects has been asked to do so.

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Hi guys! I just joined your forum so thank you for accepting me. I have been a lido contributor for over 2 years now helping with multisig ops and the Rewards-Share Program

I’d like to highlight a few points in favor of it.

Lido has consistently demonstrated its commitment to the Ethereum ecosystem, and its presence on Arbitrum can significantly enhance the platform’s liquidity and user experience. The proposed 5M ARB, while substantial, is an investment in fostering a thriving ecosystem on Arbitrum. By supporting Lido, we’re not just bolstering one protocol but creating a ripple effect that benefits numerous other projects and users. The goal is to create a synergistic environment where all participants, including native protocols, benefit from the enhanced liquidity and user engagement.

Addressing Concerns:

  1. Value for Arbitrum: The proposal isn’t just about increasing Uniswap liquidity or AAVE. It’s about creating a robust ecosystem where wstETH can be paired with various other tokens, driving value for multiple projects on Arbitrum.
  2. Details on Native Protocols: It’s essential to understand that the proposal’s primary objective is to improve wstETH liquidity, which indirectly benefits many native protocols by enhancing the overall user experience on Arbitrum.
  3. Centralization Concerns: The some concerns about Lido’s dominance in the staking space are valid there is a lot of nuance. However, it’s also crucial to recognize that Lido’s success is due to its reliability, user trust, and commitment to becoming more and more decentralized. The Lido DAO is expending massive resources to make it the most secure and decentralized LST in the ecosystem. Collaborating with Lido doesn’t mean Arbitrum is favoring centralization; it means we’re partnering with a trusted entity in the space. It also doesn’t mean that Arbitrium is staking it’s reputation with Lido over other LSTs.
  4. Size of the Grant: While the grant’s size might seem disproportionate, it’s essential to consider the scale of impact Lido can bring to Arbitrum. The proposal aims to leverage Lido’s existing user base and liquidity to benefit the entire Arbitrum ecosystem.
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I agree that size of grant looks a little bit huge. But at the same time, I think it could be reasonable.
When I worked with the Graph, they thought about liquid staking for GRT.
We investigated different solutions. And our proposal was “let’s make stGRT, based on Lido”.
We calculated cost for development, maintenance and incentives for 3 years and considered to ask Lido DAO and The Graph Foundation split the grant size.
It was also several millions fir 3 years.
The Graph Foundation rejected our proposal, preferred to give several hundred thousands to “no names”, to create liquidity GRT token on brand new platform.
It was created, several hundred thousands were spent.
Do you know where is this token? And how it’s going with liquidity on the Graph?

So, I can’t judge about this particular 5M ARB, but in my past experience, all talks about “let’s give less to someone else” didn’t bring anything except of waste time and money :pensive:

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People must vote for the grant to be accepted to begin with. It would be laughable if Lido (a non-native protocol that is far from being biggest on Arbitrum) gets the biggest grant (by far). It’s just about proportionality. I think they should revise their proposal if they want to get votes. And don’t get me wrong, I like LIDO and hope they get a grant, just being realistic.

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That’s it, end of story. Arbitrum should not bankroll Lido’s attack on the network. Who cares if the LST helps some projects when it erodes the value of the chain.

Use funds from Lido DAO, there’s plenty.

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Indeed, I like Lido, but I think grant proposal should be adjusted.

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Lido has built a valuable brand and protocol, helping to drive the LST market to the heights we see today. However, i am surprised at this proposal. Given the huge relative % ask of the overall program, this proposal severely lacks in depth and critical explanation as to why Lido should receive such a sizeable grant over other protocols.

Personally, I do not appreciate the tone or approach with this. The justification alone is weak. Simply having a high TVL is not a warrant to take a lion share of the grant when there is really quite little effort or thought put into this proposal.

Driving incentives to slightly lower wstETH slippage, is also not a stand alone value proposition that justifies taking 10% of this grant program. There can be considerable low hanging fruit gathered by supporting other LSTs to expand into Arbitrum, rather than backing the single largest player and reinforcing its monopoly.

Arbitrum prides itself as an open and fair ecosystem that fosters strength through a diverse and competitive marketplace for users and builders to operate in. Allocating 10% of the grant incentives to this proposal would not be aligned to those values.

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like lido but this is obsurd request amount imo. If liquidity is so supreme then why need such an amount to incentivise it? Find other ways to justify such a large amount other than just sell pressure of ARB…

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Happy to help incentivize Options on the Premia Side, we will be launching the wsteth pool on Premia Blue (v3) very soon. However, I will note that there are a lot of great projects of different sizes building out their niche on Arbitrum, so friendly poke to be mindful of your interactions to not come off as confrontational.
Thanks,
DK

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I do not deny Lido’s influence on the Ethereum ecosystem. However, Lido’s influence on Arbitrum in particular and Layer 2 in general is very low. Therefore, 5M ARB is too risky a number

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Speaking on behalf of CIAN’s team, I see real value in this proposal as it would complement our expansion plan. Although wstETH’s liquidity on Dexes is sufficient for the current market to trade efficiently, it could hardly sustain the forthcoming growth, especially in view of the STIP commencement.

Arbitrum’s potential to attract LST holders from Mainnet and other L2 is immense, and we personally plan to contribute to this effort by bringing many institutional entities to our Arbitrum-based wstETH recursive staking vault (due to the competitive APY, given STIP selection).

That being said, the main foreseeable efficiency bottleneck would indeed be the slippage due to the limited liquidity on DEXes, which could be alleviated by this short-term incentive program. I won’t comment here on the grant size nor timeline as I have no right to do so, but I do believe that the LST ecosystem could use some fair love and support from the DAO.

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Dear Arbitrum frens, thank you for the ability to express my opinion of this forum!

I’d like to introduce myself. My name is Dmitry, and I’m one of Lido DAO contributors working on permissionless validation in Lido (aka Community Staking). Here are my thoughts regarding this proposal and recent comments:

  1. Why wstETH presence on Arbitrum is good? It is simple. The amount of ETH bridged to Arbitrum and other L2s is rather low. wstETH liquidity incentivization is one of the best options to attract both ETH and wstETH (a better version of ETH :nerd_face:) to Arbitrum
  2. “Lido is a systemic risk to Ethereum.” DYOR, but don’t forget to consider mature research and opinions, and not only loud shouts.
  3. Grant size Given the impact and benefits that wstETH liquidity, adoption, hence, utility will bring to Arbitrum 10% of total allocation does not seem much to me. Yet, I think it can be reduced if Arbitrum doesn’t want to benefit from wstETH presence much
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Fren there is no need to overstate our comments. Simply we like LIDO, but this round of STIP is designed for projects with a duration of 4 months and with maximum budget 2 mio. ARB per project. There will be second round and IMHO other rounds later.

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There is quite a level of audacity on show from LIDO’s contributors throughout this proposal.

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It seems like you are being arrogant. I hope that doesn’t reflect the current state of Lido.

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Wow! I didn’t expect so much pushback here. We are not in CT, right?

The only thing I was trying to say is the following:

“The grant size directly correlates with the amount of wstETH that can be attracted to Arbitrum.”

No more than that. Sorry for the inappropriate wording, folks :disappointed_relieved:

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Hey everyone, I’m Drew, the Protocol Specialist @ Lido DAO–
Wanted to take time to address some of the comments made in the thread.

  1. @dgusakov is in no way ‘arrogant’. He is not a primary English speaker so cut my man some slack. Whether you support a project or not should not deteriorate your tone with others-- we’re all trying to be objective here.

  2. This proposal stands to benefit Lido, for sure, and it could also provide greater benefit to ARB overall.

  3. Denying stETH liquidity from Arbitrum DEXs will have direct impacts not only into the short term liquidity… but also in the willingness for larger institutions to engage and prioritize Arbitrum over it’s competitors on their integration roadmaps, trading strategies, etc…
    (competitors which btw have no problems with onboarding and incentivizing stETH liquidity)

You (as a retail user) may choose to cut off your own nose to spite your face, but understand you’re doing a large disservice to the underlying projects in the Arbitrum ecosystem. See CDahmen’s post above…

stETH is the only LST that is capable of handling volumes (without insane slippage) and mass withdrawals. It is many multiples in size of it’s nearest liquidity competitors. https://dune.com/murathan/lst-wars
I realize that from a centralization standpoint this may be hard to swallow. But the chicken must come before the egg in this scenario I believe.

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So and why you couldn’t request 2 mil. for 4 months and 3 mil. for 8 months in 2nd round? I think this discussion is not about LIDO’s benefit for Arbitrum, its about how to be in line with rules e.g. “It is expected that all funds distributed by this program will be used by the end of January 31, 2024.”

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@Matt_StableLab could you pls. comment on this? I can see your comments under another proposals where you ask for timeline adjustment.

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Hello @Seraphim thank you for submitting! Please make the following changes to your proposal to comply with the program rules.

  1. Please note the following rule regarding the expected timeline of the incentives program. Unfortunately, your 12-month timeline does not meet these requirements. This program is intended to be short-term as there will be new longer term incentive programs in the future after the community learns from this experiment.
  1. Please provide more detail regarding your execution strategy including a spending plan and the contracts you plan to incentivize as required by the following rules.
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