unshETH (USH) news

unshETH

It boils my blood that @LidoFinance thinks fit to go against one of the founding lido principles set forward by @paradigm . 

Governance is and always has been the existential risk that Lido presents. Dual governance is a bandaid solution, not any kind of permanent one and is very fallible. 

As long as LDO governance can control the validator registry, LDO should not exceed roughly 33% of the network. There is no hard line here because the threat isn’t based on any hard line. 

The threat is that LDO slowly gains a subversive power over Ethereum due to its ability to threaten node operators with the boot, a very powerful threat that @gakonst rightfully points out all those years ago. 

The staking router and the coming forced exits upgrades will further exacerbate the issue. Both will increase the power of LDO token holders over the node operators. Forced exits especially worries me as it has been touted as their solution for keeping their permissioned node operators in line. 

Governance is a weakness, the existence of a threat is the problem itself. We cannot rely on LDO holders to be good stewards, not even with stETH veto power. 

The apathy and bureaucracy of DAO governance is too powerful a deterrent for vetos to reliably work. The only solution is to remove the threat completely. 

Georgios goes on to write “If said pool is sufficiently governance-minimized, it could possibly win the entire market without causing any systemic risk for Ethereum.”

Where’s the minimization frens???

ln April of 2022 I published a now deleted thread called “A Case against stETH” where I explained why neither DVT nor social scores for permisionless node operators would work to scale their node operators set fast enough for the rate that they were growing their stake. 

The entire thread stands true today. The recent @NethermindEth report suggests using a Kleros court to judge Sybil cases. That’s a joke when nation states are out here human trafficking and dedicating billions to hacking/exploits/evading Sybil detection. If Lido messes up their Sybil implementation, we could find ourselves with 10-15% of all Eth staked sitting in North Korea in a Sybil farm of node operators with 0 capital bond. 

Lido should self limit not because of any consensus attacks, they should self limit because $stETH is growing faster than they can decentralize and research ways to safely introduce permisionless nodes without jeopardizing the network. 

Don’t let their campaign fool you, @LidoFinance has not shed any of its governance functionality—in fact it plans on growing it. 

This is the danger of $stETH dominance.

Twitter

The primary function of the largest LSD token by TVL is being rendered obsolete. Core LSD projects are straying further from Ethereum's decentralization ethos every day. Our paths are converging. ushETH's mission is becoming more important by the day. Watch this space, anon.