By: Eliza Bennet
LayerZero's recent rollout of a wstETH bridge on AVAX, BNB, and Scroll has been disapproved by the Lido DAO, the largest liquid staking provider accounting for over $15 billion in staked Ethereum according to DeFillama data. Lido DAO advised users to be highly cautious while interacting with the bridge due to the lack of canonical approval or endorsement from the Lido DAO itself.
Claiming it to provide enhanced utility to these platforms, LayerZero launched wstETH as an omnichain fungible token to enable the transfer of tokens across Ethereum, AVAX, BNB, and Scroll blockchains on October 25. However, the Lido community demonstrated its concern, expressing it as an aggressive marketing strategy and a push to pressure the staking protocol into compliance.
Community contributors highlighted the potential misuse risk associated with the OFT's mint-and-burn feature, which could lead to boundless wstETH minting. Liquidity issues and insufficient security evaluations were also raised as objections. In response to the backlash, LayerZero removed Scroll from the list of supported networks for wstETH and underscored its active engagement with Lido's core team, community members, as well as independent security teams.
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