$5.5B wstETH Lido Drama

$680M Tokenized Tresuries | Web3 Native OS

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Good Morning. The crypto market remains above $1.3T as we near the final few days of SBF’s trial. With two months left in 2023, there are a few developments to be aware of: Solana breakpoint announcement, UK final crypto regulatory proposals, and US spot Bitcoin ETF clarity.

In Today's Email:

  • What Matters: Lido LayerZero drama ⚔️

  • Products: DreamOS, web3 native OS 🖥️

  • Charts: Tokenized US treasuries, Centrifuge RWAs 📈

Narratives: With dYdX V4 giving all network fees to validators and stakers, as well as Uniswap’s UI fee, we’ll be seeing more mature DeFi projects start charging “real fees”, not just LP fees, to sustain their operations.



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LayerZero-Lido wstETH Bridge Drama

State of play: LayerZero introduced a bridge for Lido's wstETH (which is a wrapped version of its $5.5B TVL stETH token) — that will allow the token to move between Ethereum, Avalanche, BNB, and Scroll.

This bridge was launched without the Lido DAO’s approval.

Hasu, a crypto researcher and Lido DAO’s strategic advisor said that LayerZero is pressuring the Lido DAO to accept the proposal by “unilaterally deploying a bridge and marketing it in an official-seeming way.”

  • He admits that LayerZero’s solution might be the best, but the proposal still needs to be evaluated and should not go to Snapshot yet.

Hart Lambur, a Lido seed investor, said similar things to Hasu’s statement that “the DAO shouldn’t feel pressured to support a proposal based on a marketing campaign.”

  • Lambur expressed concern that the marketing push misleadingly implied Lido's endorsement of the bridge.

  • Lambur added that there has been no discussion of the security concerns, particularly around LayerZero's use of Google’s highly centralized and non-censorship-resistant oracle.

  • He argued that LayerZero should take the bridge down until a DAO vote happens.

Lambur and Hasu highlighted marketing ethic and security issues, while qedk contends the community should decide the bridge's appropriateness based on usage, as it is technically permissible by the code.

As this news came out, a group of bridge protocols — Connext, Chainsafe, Sygma, LiFi, Socket, Hashi, Across, Celer, and Router collectively announced a unified call for open bridge standards and criticized the wstETH's standard.

  • The 9 protocols referred to the token’s standard as a “vendor-locked proprietary standard” that restricts the freedom of token issuers.

  • They expressed concerns over the token's governance by bridge-controlled systems, highlighting unquantifiable systemic risks.

  • They suggested adopting the xERC-20 standard for bridging stETH instead of the cross-chain protocol’s offering.

What’s next: LayerZero has asked the Stargate Foundation to remove the bridging of wstETH into Scroll but pushed the DAO to “claim ownership of the contracts on BNB and Avalanche”.

Our take: DAO governance has been and will always be a double-edged sword.

  • It is similar to a classical debate of free-market capitalism vs the authority’s intervention. It’s not easy to pick a side here, as the pros-cond depend on a case-by-case basis.

For builders and investors: It is best to refrain from any actions that utilize wst ETH until the results of the proposal voting are in, or until there is a clear resolution between LayerZero and Lido.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇


DreamOS, the First Web3 Native OS

Redefining and simplifying crypto UX. DreamOS is a Web3 native operating system designed to streamline access to decentralized apps (DApps).

Here are the components of DreamOS:

  • DreamOS: A Web3-native OS that presents DApps through a familiar interface, similar to Apple's MacOS or Microsoft Windows.

  • The Dream Store: An app store for DApps, showcasing applications from various ecosystems with protection against malicious URLs.

  • Omnichain Wallet Interface: A user-friendly dashboard for cross-chain operations like currency swaps and bridging.

  • DreamID: A cross-chain naming service for DreamOS, streamlining activities and merging Web2/Web3 social feeds.

  • File Explorer Interface: A frontend display for managing and sending crypto assets like NFTs in a file explorer style.

Other cool products:

  • Verse, a full-featured DEX.

  • Juneo, a permisionless protocol.

  • Zharta, an NFT Lending protocol.

  • Filemarket, a tokenized file-sharing platform.

  • Bitinvestor, an easy onramp and offramp for digital assets.


Tokenized US Treasuries Growth

State of play: The market for tokenized US Treasuries has expanded, showing a 15% growth from $594M to $682M since July.

  • Yieldteq and Truefi have recently introduced products valued at $4.5M and $8.5M, respectively.

  • Backed Finance experienced substantial growth, with its treasury product's market cap increasing from $12M to $39M, while Maple’s market cap rose from $47M to $144M.

  • Ondo experienced the most substantial growth, with its market cap soaring from $21M to $172M.

Our take: In a period of high interest rates, the AUM for tokenized government securities has unsurprisingly grown — which is a great pivot for onchain products during a non-ZRIP environment.

Centrifuge Achieves $463M in Financed RWA

State of play: Centrifuge, a blockchain-based structured credit platform, has successfully facilitated the financing of $463.6M in RWA up to this date.

  • Institutional loans now constitute 49.6% of all loans originated.

  • Real estate has the most significant growth at 14%, from $93M to $108.7M in Q3.

  • Centrifuge introduced new pools, such as t-bills and carbon credits, to further diversify its real-world asset offerings.

Our take: Just a reminder, the challenges faced by Maple and Goldfinch several months ago highlights that we still need to understand the credit risks introduced by putting assets onchain.


  • Gemini sues Genesis for $1.6B+.

  • Neo plans Ethereum compatibility.

  • StanChart Zodia launches in Hong Kong.

  • Thai KBank acquires Satang exchange for $102M.

  • Cantor Fitzgerald comments on spot Bitcoin ETF.

  • SEC Peirce said that there’s no clear path to register.

  • CME becomes the second-largest BTC futures exchange.

  • Uniswap DAO might invest 12M UNI for 20% of Ekubo DEX.

  • Animoca Brands has been pitching a market-making service.

  • Fed’s Barr said that the US Central Bank is weighing the Digital Dollar.

  • LastPass Users hacked for millions due to compromised seed phrases.


  • Our Network’s read on real-world assets.

  • 0xKeyu’s read on ending LP’s losing game.

  • Molly White’s read on the FTX trial day 13, SBF’s dress rehearsal.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.