Lido Proposal: #0xcdb7d84ea80d914a4abffd689ecf9bdc4bb05d47f1fdbdda8793d555381a0493

Should the Lido DAO recognize the wstETH Bridge Endpoints on Scroll as canonical?

Status:
Closed
Recognize100%

Recognize: 100%

71,795,566 LDO

Don’t recognize: 0%

0 LDO

Voting Period

  -  

Proposer

0xDbBC6A93ae517D3ea568C04219cbBBd025f01CB6

Discussion

Go to Discussion

Description

The proposal is to recognize the wstETH token bridging endpoints for Scroll by the Lido DAO as canonical. If Snapshot passes, the Lido DAO will control the endpoints of wstETH token contract (including the token contract on Scroll itself) as a proxy admin. Lido DAO will only have the upgrade authority of the wstETH proxy contract, and will not be able to manage the native bridge itself.

The Scroll Team is submitting this proposal to the community for the deployment of wstETH on Scroll.

Scroll is an EVM-equivalent ZK-Rollup built upon Ethereum, designed for scaling without sacrificing security, developer, or user experience:

Scroll launched mainnet on October 17th, 2023, and since then, had significant traction, seeing:

Motivation

Lido stETH (and wstETH) is a critical asset in the Ethereum ecosystem with a significant market capitalization, and has emerged as a crucial component in DeFi applications. Naturally, a wide variety of protocols on Scroll—both established and native—have already indicated significant demand for wstETH across various use cases. Examples of this include wstETH’s usage as collateral, in lending protocols, DEX pools, vaults, yield optimizers / farming, indexes, LST-backed stablecoins, etc.

Furthermore, already more than 3700 wstETH tokens have minted on Scroll, with over 7000 unique holders. There has been steady, organic growth of the asset with clear demand since Scroll’s mainnet launch.

Solution Overview

Scroll has already implemented the canonical wstETH L1 and L2 Gateways, and has concluded its audit. The design uses the architecture of wstETH on Optimism and Arbitrum and governance forwarder used on multiple L2s as reference. Moreover, the path forward is upgrading in response to reference architecture and governance decision-forwarding demand, not redeploying the token from scratch, significantly simplifying the necessary next steps. Further details below:

The proposed components utilize Scroll’s native bridge instance for the message transfer. The token’s upgradeability is possible, due to the token proxy admin being set to Lido DAO and separate from the bridge admin (Scroll) instance. This approach aligns with the unofficial guidelines presented by NEW and is future-ready for wstETH. As such, neither the bridge or Lido DAO take any additional fees from users. The regular gas fees required for transaction execution will still be charged to the user. In case of an emergency, Lido Emergency Brakes multisig will be used to pause the deposits and withdrawals only for the wstETH transfers. In order to resume the bridging activity for wstETH, there will be a need for a Lido DAO on chain vote on Ethereum mainnet.

Audits

To better form an opinion you may consider reading through the audit report for:

Mainnet contracts

Ownership, roles, and levers Mainnet setup

Pre-vote ACL and levers setup:

Post-vote (if the vote is supported) finalizing actions from the Scroll side: