Blockchain protocols often pride themselves on “permissionlessness” — the idea that anyone, anywhere can build on top of the protocol without requiring explicit consent.
But in practice, it is sometimes wise to ask for permission.
Last October, LayerZero, a market leader that builds blockchain interoperability infrastructure, created a cryptocurrency bridge that allows users to transfer Lido's popular ETH (stETH) token to other networks, including Binance's BNB chain. The Avalanche blockchain.
There wasn't anything technically impermissible about it, and it wasn't at all unprecedented – Lido had used several bridges in the past, all of which only waited to be released after a community vote. but LayerZero Marketing This was particularly concerning to some members of the Lido DAO community – critics believed that LayerZero attempted to pass itself off as an official partner of Lido without the DAO's approval. “Announcing something that wasn't even voted on as if it were a reality is disrespectful to the DAO, and a clear sign of a lack of seriousness,” one member posted on the Lido DAO governance forum at the time.
a letter The website, which was signed by a consortium of cryptocurrency infrastructure providers at the time, notes that LayerZero appears to be inappropriately exploiting first-mover advantage as a way to “lock in” users ahead of competitors.
“By unilaterally deploying the bridge and marketing it in a way that appears official, it is as if you are trying to pressure the DAO to accept your proposal to avoid liquidity fragmentation and poor user experience for users,” Hasso, Lido’s strategic advisor, said in a statement. Lido Dow Forums. “Pushing users to it through marketing makes accepting the alternative bridge proposal even more painful. These actions put the DAO, Lido subscribers and participating chains in a difficult position.”
The reason this is such a big – and controversial – thing is that as more blockchains become widespread, “interoperability” across chains becomes critical.
There is an intense battle underway between bridge protocols, which is the key infrastructure needed to make cross-chain interoperability successful. But these services are also Prone to problemsThis is why protocols can be invaluable in terms of where their approvals are distributed.
Lido's endorsement of stETH is seen as a big prize for interoperability providers, because Lido is the largest decentralized finance (DeFi) protocol ever, with a total value locked, or TVL, of $20.8 billion, according to Davey's call.
Lido DAO members this week took their displeasure with the well-known LayerZero in a temperature-checking poll: 81% of the votes went in favor of A A competing bridge proposal from two of LayerZero's biggest competitors, Axelar and Wormhole.
Pending a formal vote to ratify the Axelar-Wormhole proposal, the bridge will soon become the Lido Bridge.”Official“Provider for transferring stETH tokens to the BNB chain.
“The Axelar and Wormhole team decided to collaborate and put together a joint proposal, where the security of both networks is effectively combined to achieve strong security properties for transferring ETH from one chain to another,” Sergey Gorbunov, CEO of Interop Labs, the initial developer of Axelar, told CoinDesk in interview.
LayerZero Labs CEO Bryan Pellegrino did not respond to CoinDesk's request for comment.
Clearly, LayerZero was in the crosshairs of its competitors as they put together their proposal. Gorbunov told CoinDesk that the Axelar-Wormhole proposal specifically aims to prevent “vendor lock-in” — where service providers use first-mover advantage to permanently promote themselves into the protocol’s infrastructure.
The Axelar-Wormhole Bridge “can be expanded to support other bridge providers on the backend if the Lido Foundation chooses,” Gorbunov explained.
Scratch layer Competing proposal For the official endorsement he received a measly 5% of the number in this week's temperature check poll.
“This is a bigger deal, in my opinion, than a regular vote on governance,” Robinson Burkey, chief commercial officer at Wormhole Foundation, told CoinDesk. “It's becoming more about the principle than the actual technology here.”
He continued: “Being able to communicate what you feel as a symbolic bearer is in the best interest of the protocol.” “If you take that power away from the token holder, you're kind of taking away the fundamentals of decentralization.”
Correction (Jan 25, 02:34 UTC): They are interoperability “labs”, not an interoperability “foundation”.
