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The Lido community is debating a proposed dual governance system to align the interests of LDO holders and protocol users, introducing mechanisms like a veto option and negotiation processes, but facing concerns over practicality and power balance. The community plans to refine the model, prototype it, and continue discussions, aiming for a decision on the initial version within a month.
The ongoing discussion pertains to the dual governance (DG) system proposed for the Lido protocol, which is currently governed by the Lido DAO through LDO token voting. The dual governance model aims to address the principal-agent problem (PAP) by aligning the interests of LDO holders and protocol users. The model proposes mechanisms such as allowing stakers to signal disagreement with the DAO, providing a negotiation device, introducing an extended dynamic timelock on DAO decisions, and improving foot voting efficiency. The community is exploring the practicality and implications of these mechanisms, as well as the potential roles of node operators and the value of LDO tokens in governance. The conversation also touches on the introduction of a Citizens’ Assembly model, a proxy for active users, and the balance between governance safety and efficiency.
The community is actively participating in the discussion, with members expressing a range of opinions on the dual governance model. There is support for the initiative to mitigate governance risks, but also concerns about the practicality of certain mechanisms like the VetoSignaling Escrow and its tax implications, the VetoFirstSealThreshold, and the risk of a "bank run" on stETH. The debate extends to the future role of LDO tokens and the inclusion of node operators in the governance process. Suggestions include incentivized delegation and a prediction market to balance governance safety and efficiency. Sacha19 has contributed to the discussion by proposing the use of pending withdrawal NFTs in the veto signaling escrow and critiquing the effectiveness of foot voting mechanics. They also express skepticism about the global applicability of a rage quit phase and the idea of penalizing LDO holders who vote for malicious proposals, highlighting the potential risks of the veto committee's power.
Posted a month ago
Last reply 6 days ago
Summary updated 6 days ago
Last updated 04/12 00:24