💠Lido: Adjust Referral Program for lending/borrowing
Summary:
This proposal has been brought forth in order to add to the terms of Lido’s referral program to exclude users that are depositing borrowed funds in Lido for stETH and thus 'gaming' the reward system.
Lido’s Referral Program:
Lido’s referral program (https://blog.lido.fi/the-lido-referral-program/) is a staking initiative set forth by Lido. This program rewards the referrers of individuals that go on to deposit 1 ETH with a 15 $LDO reward. By simply connecting your wallet athttps://referral.lido.fi/ , individuals can begin referring people to stake ETH on Lido and earning rewards in $LDO.
There are terms and conditions that go along with this program, and those can be found here:https://lido.fi/referral-terms .
Lido’s example of Abuse:
Cycle staking and re-staking liquidity from curve pool won't be rewarded! Cycle staking is when a user sends ETH through Lido using a referral link, only to sell their stETH later for more ETH in order to repeat the whole process again. Staked ETH can not be used to get rewards again and again, and again... Withdrawing ETH from the Curve pool is not going to be rewarded (as it's not helping to grow TVL).
Proposal:
This proposal suggests that Lido add to the terms of this referral program following the listing of stETH on Aave. This proposal also suggests that borrowed funds used to buy stETH or simply borrowing stETH should not constitute a reward from the Lido referral program.
Links:
Proposal Forum Post:https://research.lido.fi/t/referral-program-rules-adjustment/1827
Lido’s Referral Program Announcement:https://blog.lido.fi/the-lido-referral-program/
Lido Referral Program’s Terms:https://lido.fi/referral-terms
Lido:https://lido.fi/
Recommendation:
I recommend that the Rabbithole metagovernance pod vote ‘No’, against this proposal. There are a few reasons for this recommendation, and the first is that there is no clear plan proposed to enforce the addition of these terms. This proposal displays little effort in terms of providing a solution, and more of a way to point out a potential loophole. It appears to me that it would be difficult for Lido to track whether the ETH being staked originated from an Aave market (please correct me if I am wrong). Second, with Aave’s LTV on stETH, it is not possible to derive a 1:1 valued loan from deposited stETH, thus making this a slight boost but inefficient gamification attempt.
Open Questions:
Feedback:
Discord User adamdawson.eth#8476:
My first thought was "how on earth are they going to police that?" so I was happy to see we're aligned there! Nice write up. Another example of where we can take a position to advocate for higher quality proposals. In the spider chart this would be a very low score for "execution plan"!
Discord User rathermercurial#2096:
...or go one step further and work to implement those standards, even. Like Derek said in the recent firesides chat, daos need people power to get this stuff done. RabbitHole could potentially have the context and contributors to go far beyond advocacy.
Execution status:
Vote: No
Community Vote
1 Y
11 N
Pod Vote
1 Y
16 N
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