{"id":182501,"date":"2023-10-28T01:21:41","date_gmt":"2023-10-27T19:51:41","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=182501"},"modified":"2023-10-28T01:21:41","modified_gmt":"2023-10-27T19:51:41","slug":"9-protocols-criticize-layerzeros-wsteth-token-claiming-its-proprietary-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/9-protocols-criticize-layerzeros-wsteth-token-claiming-its-proprietary-crypto-news\/","title":{"rendered":"9 protocols criticize LayerZero\u2019s ‘wstETH’ token, claiming it’s ‘proprietary’ – Crypto News"},"content":{"rendered":"
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A new bridged token from cross-chain protocol LayerZero is drawing criticism from nine protocols throughout the Ethereum ecosystem. A joint statement from Connext, Chainsafe, Sygma, LiFi, Socket, Hashi, Across, Celer, and Router on October 27 called the token\u2019s standard \u201ca vendor-locked proprietary standard,\u201d claiming that it limits the freedom of token issuers.<\/p>\n

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Today, we’re announcing a unified call for
Open Bridge Standards
alongside @AcrossProtocol<\/a> @CelerNetwork<\/a> @ChainSafeth<\/a> @buildwithsygma<\/a> @lifiprotocol<\/a> @SocketDotTech<\/a> @routerprotocol<\/a> and @hashialliance<\/a> pic.twitter.com\/D4CLw2lBD1<\/a><\/p>\n

\u2014 Connext (@ConnextNetwork) October 27, 2023<\/a><\/p><\/blockquote>\n

The protocols claimed in their joint statement that LayerZero\u2019s new token is \u201ca proprietary representation of wstETH to Avalanche, BNB Chain, and Scroll without support from the Lido DAO [decentralized autonomous organization],\u201d which is created by \u201cprovider-specific systems [\u2026] fundamentally owned by the bridges that implement them.\u201d As a result, it creates \u201csystemic risks for projects that can be tough to quantify,\u201d they stated. The protocols advocated for the use of the xERC-20 token standard<\/a> for bridging stETH instead of using LayerZero\u2019s new token.<\/p>\n

Lido Staked Ether (stETH) is a liquid staking derivative<\/a> produced when a user deposits Ether (ETH<\/a>) into the Lido protocol for staking. On October 25, LayerZero launched<\/a> a bridged version of stETH, called “Wrapped Staked Ether (wstETH)” on BNB Chain, Avalanche, and Scroll. Prior to this launch, stETH was not available on these three networks. <\/p>\n

Since any protocol can create a bridged version of a token, LayerZero was able to launch wstETH without needing the approval of Lido\u2019s governing body, LidoDAO. In addition, both BNB Chain and LayerZero announced the token\u2019s launch on X (formerly Twitter), and BNB Chain tagged<\/a> the Lido development team in its announcement. Members of LidoDAO later claimed that these actions were an attempt to mislead users into believing that the new token had support from the DAO. <\/p>\n

On the same day that LayerZero launched wstETH, they proposed<\/a> that LidoDAO should approve the new token as the official version of stETH on the three new networks. They offered to transfer control of the token\u2019s protocol to LidoDAO, relinquishing LayerZero\u2019s administration of it. In response, some LidoDAO members complained that this move was intended to create a fait accompli <\/em>to pressure the DAO into passing the proposal when they otherwise wouldn\u2019t have.<\/p>\n

Related: <\/strong>LayerZero partners with Immunefi to launch $15M bug bounty<\/strong><\/a><\/em><\/p>\n

\u201cThere appears to have been a coordinated marketing effort between Avalanche, BNB, and LayerZero with a series of twitter posts and slick videos implying that LidoDAO has already officially accepted the OFT standard,\u201d LidoDAO member Hart Lambur posted<\/a> to the forum, adding \u201cHow is this possible when this is just a proposal<\/em>?\u201d<\/p>\n

Some members also argued that the new token could pose security issues. \u201cLayer Zero is a super centralized option that exposes Ethereum\u2019s main protocol to an unprecedented catastrophe,\u201d LidoDAO member Scaloneta claimed<\/a>, arguing that a hack in the protocol\u2019s verification layer \u201cwould imply that infinite wsteth will be minted.\u201d<\/p>\n

Cointelegraph reached out to the LayerZero team for comment through Telegram and email, but did not receive a response by the time of publication. In April, LayerZero raised over $120 million<\/a> to help build more cross-chain functionality into the Web3 ecosystem and partnered with Radix<\/a> to bring cross-chain functionality to the Radix Babylon network.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A new bridged token from cross-chain protocol LayerZero is drawing criticism from nine protocols throughout the Ethereum ecosystem. A joint statement from Connext, Chainsafe, Sygma, LiFi, Socket, Hashi, Across, Celer, and Router on October 27 called the token\u2019s standard \u201ca vendor-locked proprietary standard,\u201d claiming that it limits the freedom of token issuers. Today, we’re announcing […]<\/p>\n","protected":false},"author":2,"featured_media":182502,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[235,203,210,234,231,232,237,238,236,233],"class_list":["post-182501","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","tag-bitcoin","tag-crypto-currency","tag-elon-musk","tag-ethereum","tag-hyperledger","tag-ibm","tag-mining","tag-nodes","tag-spacex","tag-tesla"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/182501","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=182501"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/182501\/revisions"}],"predecessor-version":[{"id":182504,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/182501\/revisions\/182504"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/182502"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=182501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=182501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=182501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}