According to Cointelegraph, a new bridged token from cross-chain protocol LayerZero has drawn criticism from nine protocols in the Ethereum ecosystem. Connext, Chainsafe, Sygma, LiFi, Socket, Hashi, Across, Celer, and Router released a joint statement on October 27, calling the token's standard 'a vendor-locked proprietary standard' that limits the freedom of token issuers.

The protocols claimed that LayerZero's new token is a proprietary representation of wstETH to Avalanche, BNB Chain, and Scroll without support from the Lido DAO (decentralized autonomous organization). They argued that it creates systemic risks for projects that are difficult to quantify. Instead, the protocols advocated for the use of the xERC-20 token standard for bridging stETH.

LayerZero launched a bridged version of stETH, called 'Wrapped Staked Ether (wstETH)' on BNB Chain, Avalanche, and Scroll on October 25. Prior to this launch, stETH was not available on these three networks. LayerZero was able to launch wstETH without needing the approval of Lido's governing body, LidoDAO. However, members of LidoDAO later claimed that actions taken by LayerZero, BNB Chain, and Avalanche were an attempt to mislead users into believing that the new token had support from the DAO.

In response to the launch of wstETH, LayerZero proposed that LidoDAO should approve the new token as the official version of stETH on the three new networks and offered to transfer control of the token's protocol to LidoDAO. Some LidoDAO members complained that this move was intended to pressure the DAO into passing the proposal when they otherwise wouldn't have. Additionally, some members argued that the new token could pose security issues, with one member claiming that LayerZero is a 'super centralized option that exposes Ethereum's main protocol to an unprecedented catastrophe.'