TAP-10: Lido Whitelist

balotelli45

Summary: Seek Authority from the community to whitelist Lido

Motivation: Whitelisting Lido will allow Olympus to earn yield on idle ETH reserve while supporting the upcoming Ethereum network upgrade.

Protocol Description: Lido is a liquid staking solution for ETH 2.0 backed by industry-leading staking providers. Lido lets users stake their ETH - without locking assets or maintaining infrastructure - whilst participating in on-chain activities, e.g. lending. Lido attempts to solve the problems associated with initial ETH 2.0 staking - illiquidity, immovability and accessibility - making staked ETH liquid and allowing for participation with any amount of ETH to improve security of the Ethereum network.

Risks:

Protocol inherent risk: ETH 2.0 validators risk staking penalties, with up to 100% of staked funds at risk if validators fail to validate transactions. To minimise this risk, Lido stakes across multiple professional and reputable node operators with heterogeneous setups, with additional mitigation in the form of cover that is paid from Lido fees.There is an inherent risk that Lido could contain a smart contract vulnerability or bug. The Lido code is open-sourced, audited and covered by an extensive bug bounty program to minimise this risk.

Centralization: Limited set of validators making stETH less censorship resistant

Risks inherent to farming strategy : The value of stETH is built around the staking rewards associated with the Ethereum beacon chain. If ETH 2.0 fails to reach required levels of adoption significant fluctuations in the value of ETH and stETH could occur. Lido is built atop experimental technology under active development, and there is no guarantee that ETH 2.0 has been developed error-free. Any vulnerabilities inherent to ETH 2.0 brings with it slashing risk, as well as stETH fluctuation risk.

Risk Score: 3.4/10

Full Analysis: Here

Churchee

Ooh we gonna get in that convex reth/wseth pool ain't we… let's goo fam

Cellsmissing

Hi there. Not sure this is the correct place to ask this question or if Doscord would be a better place. Interested to know how the risk score is calculated and how the risk of this proposal compares to other approved proposals.

balotelli45

Cellsmissing Hi fren, it's a combination of Protocol TVL, Age, Type of farming strategy etc. Lower score = lower risk.

Satish143

DJMOWLGI

GM Olympus community, this is Dhruv from Tempus (https://tempus.finance/), a multi-chain secondary market for yields that allows users to fix or speculate on their income.

As part of our treasury management solution, I wanted to let you know that Tempus is currently offering 4.78% fixed APR on stETH. This is the highest fixed APR in the market for stETH. For comparison, Lido is currently offering a 3.9% variable APR on stETH.

The benefits of deploying with Tempus are as follows:

Unlike variable yields, guaranteed fixed yields provide clear visibility over future cash flows without worrying about volatility in the market.
No lock-up period so you can withdraw whenever you would like to.
We plan to offer TEMP tokens on top of the fixed yield as an added incentive.
We are covered by up to $10,000,000 of protocol-level exploit coverage on all our pools; we have two bug bounties running; and three audits so far (https://docs.tempus.finance/docs/security).

Assuming this proposal passes, it would be great to discuss the possibility of deploying with Tempus further with the Olympus Committee.

Pujeet

Hey all! I'm Pujeet from Tempus! Whitelisting Lido is a great move in putting the idle ETH to work.

I am happy to see that 98% of the voters (at the time of writing) believe in whitelisting Lido!