Investment funds: whether it involves investment of money or other value.
Common Enterprise: Whether the investment is into a common enterprise or project.
Expected Profits: Whether the investor has a reasonable expectation of profiting from the efforts of others.
Efforts of others: Whether the source of profit mainly depends on the management and operation of the project developer or a third party.
If a transaction or tool meets all of the above conditions, it may be identified as a security and regulated by the U.S. Securities and Exchange Commission (SEC). In the current regulatory environment that is not favorable to cryptocurrencies, stETH is identified as a security. However, the cryptocurrency community holds the opposite view. For example, Coinbase believes that the ETH Staking business does not meet the four elements of the Howey test and should not be considered a securities transaction.
No money invested: During the staking process, users always retain full ownership of their assets rather than handing over funds to a third party for control, so there is no investment.
No joint enterprise: The staking process is completed through a decentralized network and smart contracts, and the service provider is not a joint enterprise with the user.
No reasonable profit expectation: Staking rewards are the labor income of blockchain validators, similar to salary compensation, rather than the profit return expected from investment.
Not dependent on the efforts of others: Institutions providing staking services only run public software and computing resources to perform verification, which is technical support rather than management behavior, and rewards are not based on their management efforts.
From this we can see that there is still room for discussion on whether the certificate assets related to ETH Staking will be identified as securities, which is greatly affected by the overall subjective judgment of the SEC. In summary, here is a summary of why I say that the subsequent development of Lido is the most worthy of attention:
1. The core factor of price suppression is regulatory pressure, the subjective factors of regulatory pressure account for a high proportion, and the current price is at a low point from a technical perspective.
2. ETH has been defined as a commodity, so there is more room for discussion than in other fields, such as SOL.
3. The ETH ETF has been approved, and the relevant top resources mobilized will certainly help to promote the sales of the ETF. Let’s expand a little here, because there are already relevant blowing information being spread. This part of the trend-chasing information generally believes that the current Compared with BTC ETH, the capital inflow situation of ETH ETF has always been poor. The reason lies in differentiation. For most traditional funds, BTC is relatively easy to understand as the standard of the entire cryptocurrency track, while for ETH ETF It is not that attractive. If ETH ETF can be allowed to provide buyers with indirect staking income, its attractiveness will be significantly improved.
4. The legal costs of resolving related lawsuits are relatively small. We know that in the Samuels v. Lido DAO case, the plaintiff was not the SEC, but an individual. Therefore, the legal costs of the dismissal are small compared to the cases directly sued by the SEC, and the impact is relatively small. In summary, I think that during this window period, as the possibility of changes in the regulatory environment increases, Lido's subsequent development is worth paying attention to.
