- LayerZero has proposed the bridging of Lido DAO’s wstETH token across four networks.
- The proposal will be put to vote and Lido DAO needs to officially approve LayerZero’s plan.
- The move will integrate wstETH into LayerZero Lab’s OFT standard, boosting the token’s interoperability across Ethereum, Avalanche, BNB and Scroll.
LayerZero, a blockchain interoperability firm, proposed that Lido DAO integrate its wrapped stETH (wstETH) token to its Omichain Fungible Token (OFT) standard. If the firm’s proposal is accepted, wstETH would be easily bridged across four networks: Ethereum, Avalanche, BNB and Scroll.
Lido DAO is yet to vote on the proposal, and community members have raised their concerns regarding the mint-and-burn token standard that poses a risk of an exploit.
Also read: Lido DAO price could lose its 27% rally as whales sell a third of their 60 million LDO accumulation
Lido DAO could approve wstETH bridging across Ethereum, Avalanche, BNB and Scroll
A proposal to integrate Lido DAO’s wstETH token in LayerZero Lab’s OFT standard has garnered interest from the project’s community.
.@LidoFinance's wstETH is now an OFT available on @BNBCHAIN, @Scroll_ZKP and @avax. pic.twitter.com/LV2LjaxXaG
— LayerZero Labs (@LayerZero_Labs) October 25, 2023
If the proposal is put to vote and accepted by the DAO, it would become easier for wstETH holders to bridge the token across four blockchain networks: Ethereum, Avalanche, BNB and Scroll. The boost in cross-chain interoperability makes the token more accessible and is likely to drive its demand in the community.
Find more about the proposal here.
LayerZero’s proposal is yet to be put to vote and Avalanche, BNB and Scroll have expressed their support for wstETH to be integrated into the OFT standard. Interestingly, Lido’s community members have raised concerns about the mint-and-burn standard and highlighted the risk of exploit, among other issues.
Potential risks faced by wstETH on acceptance of LayerZero’s proposal
Lido community member, hal2001 commented on LayerZero’s proposal and highlighted his concerns about the OFT standard. According to the member, the standard poses the risk of an exploit of the token, an unauthorized unlimited minting of wstETH. Since the firm proposes directly modifying balances via messages transmitted from the source to the destination chain, if the messaging layer is ever corrupted, there is the possibility of an unlimited mint of wstETH. This could result in a mass selloff and withdrawals on Ethereum, and stETH could depeg.
Staked Ether is critical to the Ethereum community and this requires Lido to select a token standard and a bridging security method appropriately. Hal2001 encourages other members to properly debate the proposal before its adoption.
At the time of writing, LDO price is $1.893 on Binance, with 0.85% gains on the day. Lido Staked Ether (stETH) yielded 1.65% daily gains and 16.02% weekly gains for holders.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Polygon joins forces with WSPN to expand stablecoin adoption
WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.
Coinbase envisages listing of more meme coins amid regulatory optimism
Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B
As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.