Coinfeeds Daily → LayerZero Faces Backlash from Lido Community Over Unauthorized Integration

LayerZero Faces Backlash from Lido Community Over Unauthorized Integration

Published: Oct 27, 2023 | Last Updated: Oct 27, 2023
Moyi Dang

Controversy arises as LayerZero integrates wrapped version of Lido's staked Ethereum token without approval, raising concerns about governance and security

In a recent turn of events, LayerZero, a blockchain technology company, faced a significant backlash from the Lido community. The controversy arose when LayerZero integrated a wrapped version of Lido's staked Ethereum token without seeking approval from LidoDAO, the decentralized autonomous organization that governs Lido.

Understanding the Issue

The wrapped version, known as stETH, is an ERC-20 token. ERC-20 is a technical standard used for smart contracts on the Ethereum blockchain for implementing tokens. The stETH token allows for easier use in other applications. However, LayerZero's integration of this token raised concerns about governance and security within the Lido community.

The main issue was that LayerZero's bridge design and token standard were seen as potentially risky. The bridge design refers to the technology that allows for the transfer of tokens between different blockchain networks. In this case, the design used by LayerZero was perceived as a potential threat to the security of the tokens and the overall blockchain network.

LayerZero's Response

In response to the backlash, LayerZero introduced a governance proposal to approve the integration. However, this move further complicated the situation as LidoDAO was not aware of this proposal. This lack of communication and transparency led to further criticism of LayerZero.

As a result of the backlash, LayerZero has since backtracked on one integration and removed its wstETH token from the Scroll Network. This move is seen as an attempt by LayerZero to mitigate the damage and regain the trust of the Lido community.


This incident serves as a reminder of the importance of proper governance and security measures in the world of blockchain and cryptocurrencies. It highlights the need for transparency and open communication, especially when making decisions that can impact the security and functionality of a blockchain network. Furthermore, it underscores the power of community in decentralized systems, where decisions can and should be made collectively.

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