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<\/p>\nThe decentralized autonomous organization (DAO) behind Lido \u2014 the largest Ethereum staking pool \u2014 is deliberating whether it should sell or stake the $30 million in Ether (ETH) from its treasury. <\/p>\n
A proposal was submitted on Feb. 14 by the DAO\u2019s financial unit, Steakhouse Financial that considers four choices, one of which contemplates staking part or all of its ETH on Lido in the form of Lido Staked ETH (stETH).<\/p>\n
Another would see LidoDAO selling a part or all of its 20,304 ETH for a stablecoin, with the purpose being to extend the DAO\u2019s runway.<\/p>\n
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The proposal comes as ETH staking withdrawals will soon be enabled through Ethereum\u2019s Shanghai and Capella upgrades expected to take place sometime in earl 2023 according to the Ethereum Foundation.<\/p>\n
While converting the ETH to Staked ETH may lead to more protocol rewards, the DAO is wary that too much staking may risk it not having enough Ether on hand \u201cin case of need.\u201d<\/p>\n
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Regarding operating expenses, Steakhouse Financial suggested it may be necessary to swap Ether for a stablecoin in order to \u201cpreemptively secure additional runway.\u201d<\/p>\n
Steakhouse Financial noted that with LidoDAO\u2019s current inflows at about 1000 stETH per month, the DAO is making approximately $1.3 million to 1.5 million per month with the price of ETH hovering between $1,100 and 1,700 over the past few months.<\/p>\n
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Steakhouse Financial said those figures alone should be \u201csufficient to cover monthly operating expenses.\u201d<\/p>\n
However, they\u2019re still deliberating whether it is worth converting excess stETH into a stablecoin to better prepare for any change in market conditions that may lead to increased operating expenses.<\/p>\n
A business development representative from LidoDAO noted that they\u2019re not particularly thrilled with the current state of the stablecoin market:<\/p>\n
\u201cConsidering all the FUD and rumors, both DAI due to USDC collateral and USDC itself pose potential risk if they become frozen. That being said I have issues with the liquidity of LUSD and USDT has yet its own issues.\u201d<\/p><\/blockquote>\n
It appears as though most LidoDAO members are in favor of partially selling and staking a portion of the 20,304 ETH locked in its Aragon smart contract.<\/p>\n