Lido Alliance application: Mellow

Summary

Mellow is a protocol that allows for permissionless LRT creation based on their own risk profiles and curation models. The proposal asks for the onboarding of the Mellow Protocol to Lido Alliance.

Terms and conditions

From Mellow

The new integration with Mellow will benefit the whole Lido ecosystem and stakers, making stETH a one-stop vehicle for delegation to operators and different AVSes. stETH liquidity may be increased in addition to becoming a prime LST vehicle available for onboarding to Mellow LRT.

• Ethereum-alignment and commitment to decentralize validation
  • By participating in the wide restaking ecosystem, Mellow would help to spread the geographical and technical decentralization efforts Lido does outside Ethereum validation
  • As ETH has moved from Lido to EigenLayer, the weighted average node operator set has become significantly more concentrated, presenting a risk to decentralized validation
  • By encouraging users to use stETH in Mellow, it’s hoped to increase the level of validator decentralization in restaking, positively influencing Ethereum integrity
• Use-cases for stETH adoption and integration
  • stETH users will find new opportunities to deposit their assets in a restaking marketplace that is more transparent and offers more granularity with regard to risk exposure
  • stETH holders may benefit from exclusive opportunities for earning Mellow points
• Opportunities for node operators
  • Lido node operators could launch their own composable LRT and take control of the risk management process by selecting AVS’ suitable for their needs rather than face their imposition by LRTs or restaking protocols
  • They could also collaborate with curators to reach the same outcome and create bespoke LRTs for their customers based on stETH
• 100,000,000 MLW tokens (10% of the total supply) will be locked in a Lido Alliance legal entity (e.g., Foundation) after TGE. These tokens will be held in perpetuity. These tokens will be subject to the same vesting and cliff terms as the team tokens: a 12-month cliff following the TGE, and a 30-month vesting period beginning after the cliff.

From Lido DAO

What Mellow is seeking from Lido Alliance membership:

• Endorsement
  • Lido DAO’s acceptance of Mellow as a member of the Lido Alliance
• Integrations
  • Mellow discusses the integration of descriptions and links to deposits in Mellow UI in stETH into the Lido landing page, given the adherence to the industry security practices. After getting positive traction and if Lido DAO sees it possible and bringing value, integration of deposits directly into any Lido UI
• Bug Bounty support
  • Up for the first 4 months after deployment, support the Mellow smart contract bug bounty with up to $400,000 payout for critical and $150,000 payout for high-level finding on top of Mellow bounty (tokens supplied off the exiting Lido Contributors Group EGG request)
• Ecosystem
  • The shared stance of Mellow and Lido Alliance on decentralization and security is a prerequisite to having a shared ecosystem centered around stETH with Mellow LRTs as satellites
• Liquidity support
  • Mellow seeks access to a partnership network to enhance its own business development efforts for liquidity provision within the system
• Network
  • Lido DAO contributors and Mellow members will apply security best practices, refer talented individuals to each other (with no contributors poaching from either side), and collaborate in various ways to build a decentralized future for the Ethereum ecosystem
• Consultation
  • Mellow anticipates benefiting from the Lido team’s extensive expertise in different aspects of the ecosystem and technology. This includes access to contributor groups for knowledge sharing, conducted in a limited and non-disruptive manner.

Proposal actions

The proposal requests onboarding Mellow Protocol to Lido Alliance under the outlined terms and conditions.