Fluid <> Lido Alliance alignment proposal

Proposals
1

Introduction

Hi everyone, I’m Nemo, Lido alliance contributor. Excited to be here and for this proposal.

This proposal outlines the mutually beneficial collaboration that will align the Lido Alliance BORG with Fluid and Instadapp.

Lido Alliance is a framework for Lido DAO to offer support and endorsement for protocols with the same obsessive focus on smart contract and product security and a no-holds barred commitment to decentralizing Ethereum validation. It relies on yet-to-be-built governance process for Lido DAO to identify and recognize projects that share the same values and mission, and have a way to positively contribute to the stETH ecosystem.

The launch of Fluid presents a new opportunity for wstETH in terms of efficient liquidity - with the use of smart debt, higher debt ratios and the crosschain refinancing feature. The launch of Fluid is a timely opportunity for both parties to tap into and engage in a deeper and more collaborative relationship, driving mutually beneficial growth.

Motivation

The effort is proposed after a series of discussions between both Fluid and Lido Alliance. There is clear alignment on both ends in jointly utilizing and supporting the protocols to efficiently drive adoption and education to grow a number of vertical integrations.

Rewards share

Lido Alliance is proposing the following rewards share program with Instadapp and Fluid:

Instadapp

Fluid

  • 50% fee share on the LRT&ETH <> wstETH or stETH vaults

The aforementioned rewards share arrangement shall apply to Ethereum Mainnet as well as the future layer-2s or layer-1s that Fluid will be expanding to.

In exchange, the Lido Alliance will assist with:

  1. Strong communications support and branding and visibility
  2. Engaging Lido Growth Committee (LoL) to provide incentives for TVL optimisation on Fluid/Instadapp Lite on multiple chains (crosschain)
  3. Aligning Lido DAO contributors with utilization of Fluid and Fluid DEX for L2 growth
  4. Supporting with visibility on wstETH user information hubs
  5. Sourcing top tier LRTs for joint collaboration

Additional details

Communications Support Connecting with Lido DAO contributors for support in terms of amplification of the collaboration and ease of information accessibility via Lido DAO information hubs.

A similar motion in the past can be observed on wstETH in Defi page.

Communications support can also extend to features on other prominent areas like blogs and social media to boost, amplify and solidify collaboration.

Incentive Support

To further help with industry standard practices, Lido Alliance will also assist with the engagement of Lido Growth Committee for incentives on Fluid and Instadapp Lite based on proactive monthly emissions.

Utilization of Fluid and Fluid DEX for mainnet and L2 Growth

Lido Growth Committee contributors are constantly pushing for wstETH education and adoption specifically for usage on L2s. With alignment over Fluid and Fluid DEX incentives, because of the efficiency Fluid brings to incentive allocation, it can become a key venue on an ongoing basis to grow wstETH’s presence on L2s such as Arbitrum and Base.

Conclusion

This proposal seeks to further the relations between Lido Alliance and Fluid/Instadapp and provide industry advancement in terms of UX, education and scalability of both protocols. It fosters an aligned relationship with mutual understanding of growing the innovations. The efficiency of Fluid DEX and liquidity of stETH in Defi makes it a perfect match for this unique collaboration.

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2

Hi @nemo thanks for sharing the proposal!

Overall supportive. Great to see initiatives like this.

Can you or the Fluid team (@DMH, @samyak) go into a bit more detail on:

@DMH what’s the team’s view on the reward share economics in the proposal taking into consideration potentially setting a precedent for future vaults?

3 Likes
3

Thank you for your proposal!

We see Lido as the major and reliable partner for Fluid. Historically, Instadapp and Lido have had good long-term relations, Lido products were integrated across all our protocols including Lite Vault holding more than $1.3B in stETH.

Fluid was the first lending market to introduce LRT<>wstETH looping which preserved wstETH<>ETH market and was later picked up by other lending markets. Also, Fluid offers the best borrowing conditions in DeFi against wstETH and Fluid’s architecture is ideal for onboarding more markets where wstETH will be used as collateral or a debt asset.

The proposed collaboration might tremendously increase wstETH supply on Fluid, allow for more LRT<>wstETH markets, create more DEX pairs, increase Lite vault TVL, etc which will lead to the growth of our market size and revenue.

I am very supportive of this proposal.

3 Likes