Podcast Notes | Conversation with Co-Founder of Framework Ventures: Deep Dive into MakerDAO and Lido, Exploring the Growth Strategies of Leading Projects
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Podcast Notes | Conversation with Co-Founder of Framework Ventures: Deep Dive into MakerDAO and Lido, Exploring the Growth Strategies of Leading Projects
Most people choose to stake with Lido, not because Lido actively acquires these users, but because refining the product itself is the best growth strategy.
Navigating Web3 tides with focused insightsCompiled & Translated by TechFlow
In this episode of the Bell Curve podcast, Mike and Myles are joined by adcv, lead at Steakhouse Financial, and Vance Spencer, co-founder of Framework Ventures, to dive deep into the business approaches of MakerDAO and Lido.
adcv has been involved with both MakerDAO and Lido projects, while Vance brings extensive VC investment perspective and experience. Drawing from their respective domains, they explore key issues including value accrual, strategic direction, business models, and ultimate outcomes of these two protocols.
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Below is the main content of the discussion, translated by TechFlow:
Hosts: Mike, Blockworks; Myles, Bell Curve
Guests: adcv, Lead at Steakhouse Financial; Vance Spencer, Co-Founder of Framework Ventures
Video Credit: Bell Curve Podcast
Episode: Link
Release Date: August 1
Explaining Liquid Staking to a Layperson
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adcv and Vance begin by emphasizing their goal of providing listeners with mental models and frameworks for evaluating crypto protocols—helping simplify our understanding of liquid staking.
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adcv explains the concept of liquid staking protocols, describing them as mechanisms designed to enable as many people as possible to participate in staking—this being their core value proposition.
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He offers an interesting analogy, comparing liquid staking protocols to banks. When users buy liquid staking tokens, they’re not staking themselves but transferring that right to another party who performs the staking on their behalf. He finds the banking structure a useful mental model.
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He notes that while Ethereum, staking, and liquid staking may resemble past models in some ways, in most critical aspects they are unprecedented.
Business Models, Endgames, and Differences Between MakerDAO & Lido
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MakerDAO’s ultimate goal is to become a large-scale central bank operating on-chain, supporting diverse use cases and multiple types of collateral.
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The DAO structure exists to facilitate user acquisition, collateral integration, and other governance-driven initiatives. Another long-term objective for MakerDAO is continuously expanding its range of accepted collateral and debt positions, encouraging broader stablecoin adoption.
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Lido’s endgame differs significantly from MakerDAO’s. Currently, Lido is primarily focused on providing liquidity for Ethereum staking. Its final vision depends on what it can achieve and how deeply it chooses to engage.
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Lido has the potential to become a reserve currency—a role DAI cannot fulfill due to its heavy reliance on USDC and real-world assets, which are not native to blockchain. Thus, Lido’s market opportunity could be larger.
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They also discuss similarities between Lido and MakerDAO in balance sheet management. Both protocols manage assets and liabilities, though their approaches differ. For instance, MakerDAO follows a more traditional asset-liability framework, whereas Lido does not.
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adcv and Vance note that Lido is growing much faster than DAI, which may influence its endgame. With Lido’s TVL (total value locked) being three times that of DAI, its growth trajectory is clearly accelerating.
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They explore how Lido might leverage this growth—for example, enabling re-staking using stETH, opening up new avenues for expansion.
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On governance, MakerDAO aims to decentralize decision-making and responsibilities through a sub-DAO model, reducing centralization risks.
Liquid Staking-as-a-Service, LSTs, and Basket Indices
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The speakers discuss the idea of staking-as-a-service and how such a model affects risk and return for Ethereum validators. They suggest that if Lido can automate its decision-making and reduce human intervention, it could become a highly attractive service provider.
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They also examine how Lido could evolve from a simple marketplace into a more complex system by building a sophisticated staking router. Such a router could help distribute node operators across different sets, reducing centralization risk.
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Vance hopes that major institutions like Coinbase, UBS, or Goldman Sachs will eventually join Lido alongside individual stakers, solo validators, and professional operators, collectively mitigating centralization risks.
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Vance Spencer then discusses Lido’s business model. He emphasizes that for Lido and many decentralized protocols, pure profit maximization isn’t necessarily the primary goal. Instead, Lido’s mission centers on decentralizing the node operator set, ensuring geographic distribution, and safeguarding the integrity of Ethereum’s foundational infrastructure.
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Vance highlights Lido’s potential business models and growth opportunities. Through a “liquid staking-as-a-service” model, Lido can connect stakers with suitable validators, driving organic growth.
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In such a service model, fee structures are crucial. If Lido can dynamically adjust fees based on validator size and demand, it could attract more participants.
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Additionally, offering choice within the service is key to attracting users. Allowing ETH holders to select their preferred validators could draw more participants into the ecosystem.
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Vance also touches on KYC and institutional staking. He argues that requiring KYC on liquid staking tokens is largely ineffective since ownership of these tokens can change hands freely on-chain without any compliance checks downstream.
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Vance raises concerns about LSDFi protocols. He points out that many LSDFi protocols are essentially just standard DeFi protocols using liquid staking tokens as collateral. While this may help bootstrap early growth, in the long run, such protocols struggle to differentiate themselves from established players like MakerDAO.
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Moreover, LST indices appear to increase risk rather than mitigate it. An LST index is an investment vehicle tracking a basket of liquid staking tokens, allowing investors to gain exposure to multiple LSTs via a single product.
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Vance cautions that such indices don’t enhance security—they merely offer diversification. However, they fail to eliminate the specific risks associated with each underlying validator represented by the LSTs.
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Furthermore, he warns that these indices may mislead investors into believing they gain greater safety through diversification. In reality, because each LST carries unique risks, the overall basket remains vulnerable.
Lido's Revenue Growth and Bribe-Based Models
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Vance Spencer suggests that Lido may have already achieved product-market fit and continues progressing along its current path. However, as demand for staked assets saturates, Lido will face strategic choices: remain at current scale or pursue growth in more complex domains.
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They also discuss the need for Lido to further diversify its validator set to unlock larger market share, which may require adopting a more open governance model.
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adcv introduces a potential business model called Node Operator Distribution as a Service (NODAS). The idea is that if another protocol (e.g., Optimism) seeks a more distributed sequencer set, it could leverage Lido’s existing decentralized validator network, which has already achieved global geographic distribution. This represents a compelling opportunity for Lido.
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This NODAS model is described as a supply-side innovation—one that enhances Lido’s utility without affecting end-users, who continue benefiting from seamless staking services regardless of backend operations.
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Vance and adcv compare two distinct value accrual models: the first is traditional—protocols collect cash flow via fees and later distribute it to token holders over time.
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The second model better aligns with crypto-native principles—embedding demand for the token directly into the product design, such as making the token essential for protocol functionality.
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They analyze the pros and cons of both models but refrain from predicting which one Lido will adopt—likely because such decisions rest with Lido’s governance, not individuals.
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adcv comments on Lido’s product strategy: most users choose Lido organically rather than being actively acquired, suggesting that product excellence itself is the best growth engine. Focusing relentlessly on solving the core problem—making staking easy—could yield outsized returns.
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They also touch on a possible bribe-based model: purchasing large amounts of LDO before staking could allow users to lower fee parameters for specific modules, enabling cheaper staking.
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Vance and adcv believe this could represent a viable mechanism for value accrual. If LDO tokens cannot claim direct cash flows, alternative methods must exist to reflect holding value.
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Finally, the hosts and guests look ahead to Lido’s future development, particularly how to balance growth and profitability.
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One proposed model involves letting validators bid for additional staking shares—an approach that could boost Lido’s revenue without impacting users. However, they acknowledge this might lead to validator concentration, potentially harming Lido’s long-term market position.
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