Lido’s obligations to the community do not end at creating and supporting great initiatives. Being as much transparent as we can - also of a great value for our stakeholders. LEGO continues the useful practice of reporting on results to re-ensure this. In addition it helps to keep everything in order as well as to get useful feedback and self-reflection.
This quarter hit hard, sparing almost no crypto, nor traditional assets (well, maybe except gold in some degree). Although such storms not passing unnoticed and leave stress marks in our behavior, they also usually followed by calm and sunny weather after all. LEGO purpose is to encourage positive changes in ecosystem and to keep to fulfill it, we proposed to extend the program for another year via Snapshot vote - and it passed required boundary.
Please find below our traditional overview of grants structure for the past quarter as well as more detailed description of notable examples.
Majority of grants still being initiated by original LEGO council members, although joined LEGO nominees also take significant part in the process of grants prominence and feasibility evaluation, providing a context for discussion and sharing their feedback:
Audit of Lido-on-X protocol (Lido on Solana, Polygon, Kusama / Polkadot) concluded a significant part of expenses in Q2 2022, such assessments never come at low cost and are vital to the protocol. In turn, these upfront expenses together with bug bounties usually save much more than recovery from any insecurities discovered and exploited. These compensations were discussed at research forum and voted for as required. The two major one are 62,500 USD to MixBytes() and last batch of 27,500 USD to Shard Labs.
Lido dev team has reached out to audit firm and secured the quarterly retainer for Lido smart contracts audits. The first quarter of audits has been financed by LEGO in amount of 80,000 USD. A post with details about it will be in our research forum in a couple of days.
The merge-ready Lido protocol upgrade has been implemented recently. While it has been extensively tested by Lido dev team & received the audit from MixBytes team prior to the deployment, the dev team continued looking for ways to get more eyes to review the codebase. Ensuring the protocol smart contracts have been audited by professionals with diverse perspectives allows to notice wide range of potential issues and safely fix them. Lido has contacted ChainSecurity audit firm and got the slot for the assessment, the Snapshot voting ended on the 17-th of June approving this spending and LEGO paid the 1-st tranche (67,604 USDT of 127,604 at the time of writing).
Small reminder about the sponsorship of Devconnect in Amsterdam by Lido on 20-th of April. Invoices for related marketing and other expenses were due to pay earlier then establishment of Resourcing and Compensation Committee (RCC) so LEGO funded them as urgent ones (89,700 USD). You may find more details in the forum and to watch an event recording below:
Messari Hub came out with the proposal to join them and Messari to make coverage and quarterly reports for Lido, but the initiative didn’t catch enough interest from the community. LEGO council decided to opt in significantly reduced package of joining in the hub and issue of only the coverage report totaling 25,000 USD.
Another 24,000 USD were granted to Blockscience as a 2-nd part of compensation for DAO Vulnerabilities report for Lido with the aim to produce a conceptual model of governance (map) of the current system (both social and technical), how the governance process allows stakeholders to control and observe that system, and the threats, vulnerabilities, and opportunities that arise as a result.
3-rd payment of 18,950 USD for Lido Validator dashboard to Henri DF (remaining part of the development fee plus hosting and maintenance) - more details and payout schedule may be found here: https://hackmd.io/@timbeiko/validator-dashboard-payments.
In addition for better overview of the network 23,280 USD in LDO were granted to eliasimos and ariskkol for development of eth2 validator rankings dashboard - https://www.rated.network/ and a small thank you sandgrain to Hildobby for his dashboard in Dune analytics.
These categories contain regular payments for community support (13,000 USD for Mar-Jun period) and rewards program moderation (21,300 USD for Jan-May period), but we plan to integrate them into resourcing and compensation committee (RCC) budget in future.
In addition to above mentioned spending Lido became a Ministry level sponsor of Dawn DAO - the organization to increase collaboration of DAOists across the globe (25,000 USD grant). Guys have established their first Lisbon Metahub for increased focus and collaboration and launching regular events, the most recent of which was the DAOist’s Global Governance Gathering and there are more to come:
Aztec got a 10,000 USD grant to offer users cheap and private deposits into Lido via ZK rollup. This integration will provide users with 75-97% gas savings and fuel adoption of Lido and stETH on L2. You can find more about this integration in the initial proposal received.
Akhilesh Mishra reached out to our team with proposal to integrate Lido with Texochat - a Blockchain-based multi-purpose chat application. LEGO council approved a grant of 7,000 USD for this development.
Carvas helped a lot our business development team during 2-nd quarter with getting and stay in touch with market makers, research and production of governance proposals for other protocols or DAOs to use Lido’s products as treasury or as integrations, supported analytics and conducted researches for stETH’s L2 expansion. This efforts led to a grant of 3,500 USD payed to him.
In the eyes of the law, DAOs can be considered unincorporated entities where groups of people tie together into a network to take actions collectively. Since the Lido DAO is an organization that exists primarily as a smart contract with cashflows and assets governed by a token through the Aragon governance framework (or in other words it natively does not exist as an incorporated entity), individual contributors are potentially exposed to liability.
The Lido DAO is decentralized and large enough such that there is no single person or entity to target in such cases, however, multiple potential hires have expressed concern for the risk associated with engaging with the Lido DAO in this fashion. More thoughts on this problem are covered in this RFP.
One of the steps of this legal structuring project is actual Lido incorporation made by Eric Hill, compensation of expenses for which totaled 15,000 USD.
LEGO’s spending in this quarter totaled roughly 532k in LDO equivalent but 338k LDO of them were compensations of security audits additionally approved at Snapshot voting, which are vital for proper operation of the protocol. Grants total net of these compensations therefore amounted 194k LDO or 65% of budget fulfillment. This time LEGO team managed to keep granting pace more stable and even in addition to providing nice level of it (please refer to the chart below).
Stay tuned, stake safe.