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Lido, the top liquid staking provider, is fiercely debating whether to support cross-chain stETH transfers to Avalanche, BNB Chain, and Scroll via a new bridge deployed by LayerZero Labs.<\/p>\n
The discourse surrounding the bridge has quickly attracted controversy, with Lido\u2019s community accusing LayerZero, Avalanche, and BNB Chain of launching a slick marketing campaign inaccurately implying Lido also supports the bridge, despite Lido still discussing the Oct. 26\u00a0proposal<\/a>.<\/p>\n \u201cA bridge has been deployed to bring wstETH to Avalanche, BNB, and Scroll, facilitated by LayerZero Labs,\u201d Lido\u00a0tweeted<\/a>. \u201cThe proposal for the Lido DAO to support the bridge must still go through the necessary checks, discussion, and governance process.\u201d<\/p>\n Lido added that the bridge is not canonical, has not been audited, and is not endorsed by the Lido DAO. \u201cPlease exercise extreme caution if you choose to interact with the bridge,\u201d it said.<\/p>\n <\/a><\/p>\n LayerZero\u2019s aggressive\u00a0marketing<\/a>\u00a0included explicitly declaring that wrapped stETH \u201cis now an OFT\u201d enabling seamless transfers across Avalanche, BNB Chain, and Scroll. The bridge is also live on Stargate, a protocol enabling cross-chain swaps between native assets.<\/p>\n LayerZero facilitates cross-chain transfers for Ethereum Virtual Machine (EVM)-compatible via its Omnichain Fungible Token (OFT) standard. The standard allows users to mint OFT tokens on a destination chain by burning the OFTs from supply on the origin chain.<\/p>\n Although LayerZero is yet to suffer an exploit, members of the Lido community warn that LayerZero\u2019s OFT protocol introduces additional risks for Lido.<\/p>\n “Lock-ins introduce systemic risks for wstETH, and, by extension, Ethereum,\u201d said<\/a> Arjun Bhuptani of Connext network. \u201cLido benefits from owning wstETH deployments on each chain more directly.\u201d<\/p>\n \u201cA thorough security assessment of the proposed solution\u2026 has been conducted or scheduled neither by Lido DAO contributors nor independent security experts on the particular request,\u201d said<\/a> TheDZhon on Lido\u2019s governance forum.<\/p>\n Other users fear that wstETH liquidity could become fragmented between LayerZero\u2019s OFT representation and native deployments from Lido.<\/p>\n \u201cHonestly shocked by LayerZero\u2019s move here,\u201d\u00a0tweeted<\/a>\u00a0Litocoen of Socket. \u201cCompletely frontrunning LidoDAO\u2019s governance process and its network expansion team to deploy a wstETH version\u2026 Imagine the UX nightmare if liquidity for [LayerZero]\u2019s fake version starts to build on these chains and then LidoDAO deploys their own version.\u201d<\/p>\n\n