Lido Proposes Revenue Sharing Model Based on Stake Size
The Lido Finance community is abuzz with discussions following a new proposal regarding the protocol's revenue sharing mechanism.
Lido Proposes Revenue Sharing Based on Stake Tiers
On June 15, a user named frontalpha published a proposal titled "Revenue Sharing Based on Stake Tiers." This proposal suggests distributing rewards based on the amount of ETH staked by individuals or organizations. The proposed reward tiers are as follows:
- 30% for stakes ranging from 0 to 50,000 ETH
- 35% for stakes ranging from 50,000 to 150,000 ETH
- 40% for stakes ranging from 150,000 to 350,000 ETH
- 45% for stakes ranging from 350,000 to 700,000 ETH
- 50% for stakes exceeding 700,000 ETH
For example, if an individual or organization stakes 60,000 ETH, the 35% tier will be applied. When the DAO Treasury earns 1,000 ETH in staking rewards from this 60,000 ETH, 350 ETH will be allocated to the staker. Lido will impose conditions for organizations participating in this program, with a notable criterion being the ability to stake at least 2,500 ETH within 12-24 months.
Lido maintains a 5% staking reward contribution to the DAO Treasury. Frontalpha argues that the current referral reward program (now suspended), funded by the DAO Treasury, is unsustainable and leads to short-term behaviors from participants.
Additional Proposals and Community Reactions
Following this proposal, Mantle DAO proposed transferring 40,000 ETH from the BitDAO Treasury to Lido’s liquid staking token stETH.
Big news: I am proposing a huge partnership b/w @LidoFinance and @0xMantle
— Seraphim (@MacroMate8) June 22, 2023
Involves allocating ETH to stETH to bootstrap Mantle's DeFi ecosystem + 1st of its kind revenue share
I believe it's a testament to Mantle's huge potential as a Tier 1 partnerhttps://t.co/uUqE0jnoqk pic.twitter.com/ef3CmMNv6T
Seraphim, the author of the Mantle proposal, emphasized the importance of whether Lido’s tiered reward proposal would be approved.
However, the community expressed concerns about these reward distribution proposals. Many worry that such schemes could compromise decentralization by allowing Lido to dominate the Liquid Staking market, favoring large organizations and whales.
"It's not about how much you earn, it's about what you're worth."
— monetsupply.eth (@MonetSupply) May 17, 2023
thots on lido revenue distribution proposal: https://t.co/iljlWRLKCR
Some community members believe the current reward allocation proposal is premature. They argue that Lido should focus on expanding its infrastructure products rather than distributing benefits too early.
Stay tuned for more updates on the developments within the Lido Finance community.
