Original - Odaily
Author - Azuma
On October 26, the cross-chain interoperability protocol LayerZero announced on its official , Avalanche, BNB Chain and Scroll to freely transfer the token.
After the announcement, parties involved in the incident such as Avalanche and BNB Chain followed up with congratulations on social media.It seems like this is a formal cooperation between leading protocols, and it seems that Lido wants to use LayerZero to expand into more new ecosystems.
However, as time passed, things began to develop in unexpected directions. The first person to raise different voices was within the Lido community.ManyCommunity members emphasized on social media that this deployment of LayerZero has not been recognized by Lido DAO, and stated that OFT wstETH, which is endorsed by a third-party agreement (LayerZero), will be used as the official version of multiple popular ecosystems with different architectures. The design itself and its advancement process are not reasonable enough.
The first level of questioning: the security issues of the OFT model itself
The first level of questioning focuses on the security issues of the OFT model itself.
Community member @arixoneth believes that aside from Layer 1 such as Avalanche and BNB Chain, Scroll, as a Layer 2 network with zk-Rollup architecture, the safest way to introduce mainnet assets should be to use the Rollup native bridge instead of using the third layer. Three-party bridging protocol. The trade-off of sacrificing security in exchange for a certain amount of liquidity is not worth it.
Community member @hal2001 said that the OFT model uses a mint/destroy architecture based on authorized smart contracts, which means there may be some potential loopholes that lead to unauthorized unlimited minting of wstETH.Considering the importance of wstETH itself to the Ethereum ecosystem, if the model is destroyed and a large amount of wstETH is mistakenly minted, this can easily trigger a large number of redemptions and sell-offs of ETH itself, thus destroying the ecological foundation.
Hart Lambur, founder of the decentralized interoperability protocol Across Protocol, also posted on the X platform: “In mid-September, I criticized LayerZero’s decision to use Google’s centralized oracle as the default option, especially since they continued to Promoted as decentralized.Recently, many members of the Lido community were upset when LayerZero once again used the same centralized Google oracle to deploy an unauthorized wstETH bridge, marketing it as an official (decentralized) version.LayerZero has a history of marketing its products in a high-profile way but not being willing to discuss the technical details and considerations behind them. This is bad for our industry and I am tired of this behavior.
All in all, a large number of community members have raised security concerns about the OFT model and emphasized that neither Lido DAO contributors nor external security experts have conducted a thorough security assessment of LayerZeros solution, including architectural analysis and impact on the core protocol. Assessments and reviews of deployment artifacts and governance mechanisms, among others.
The second level of questioning: procedural errors in governance promotion
In addition to the plan design itself, more doubts within the community focus on LayerZero’s procedural errors in governance advancement.
According to normal governance procedures, the proposal initiator should advance the deployment after the proposal content has been fully discussed and recognized by the community. However, this time LayerZero officially announced that it had launched OFT wstETH immediately after initiating the proposal, and joined hands with Avalanche, BNB Chain and some media created a high-profile campaign. This operation is suspected of using PR to kidnap community governance.
Community member @hal2001 believes that LayerZero, Avalanche, and BNB Chain seem to have reached an agreement on the marketing of this event, aiming to make the community think that Lido DAO has officially accepted the OFT standard. However, this is not the case. This is just a preliminary proposal.
Lido strategic consultant @Hasu said he was speechless. He first completed the deployment unilaterally and then conducted marketing through official channels. This felt like forcing Lido DAO to accept the proposal. Even if there is nothing wrong with LayerZeros solution, it still needs to be fully discussed within the community and allow the community to choose from multiple solutions. There is an error in the order of advancement of this matter.
Community member @Scaloneta also angrily said that the official announcement of something that has not even been voted on, as if it has become a reality, is disrespectful to Lido DAO and also shows that LayerZero itself is not serious enough.
A collective counterattack by friends and businessmen
While the Lido community collectively bombarded LayerZero, major cross-chain protocols were not idle either. Seeing LayerZero grabbing market share with such unethical practices, they naturally would not sit still and wait for death.
In addition to Hart Lambur, the founder of Across Protocol mentioned above, the first to take the initiative was Georgios Vlachos, co-founder of Axelar Network. He proposed the competition plan given by Axelar Network under LayerZeros proposal discussion thread and has already Get support from some community members.
Subsequently, Chainlink Labs product marketing manager Michael Robinson also proposed a competitive solution based on the cross-chain interoperability protocol CCIP.
In the early hours of this morning, eight major projects including Connext Network, ChainSafe, Sygma, Li.Fi, Socket, Across Protocol, Celer, and Router jointly issued a document, angrily criticizing LayerZero for not following martial ethics and calling for the establishment of an open cross-chain bridging standard. .
Decentralized Resilience
All in all, LayerZero was self-defeating this time, and ultimately triggered the collective anger of the Lido community and industry friends.
As of the publication of the article, LayerZeros latest reply on this matter is: first, it agrees with the community that the Rollup native bridge is more secure, and is willing to cancel bridging support for Scroll; second, it is willing to hand over the ownership of the Avalanche and BNB Chain bridge contracts to Lido DAO, allowing the DAO to control various configurations.
Looking back at the entire incident, although LayerZero’s behavior was indeed enough to “catch the horse”, we were even more impressed by Lido DAO’s internal performance in this incident. Although LayerZero mentioned in its latest reply that it has been discussing the solution with the Lido core team in recent months, it can be seen that the community does not care whether you take the Edict, and more community members are still focusing their attention on on the program as well as the program itself.
Perhaps this is where the resilience of decentralization lies.
