Lido has introduced an updated governance mechanism aimed at engaging stETH holders. The new system allows dynamic adaptation of delays for executing problematic proposals.
What is Dual Governance?
The Dual Governance system provides stETH users the ability to delay execution of proposals they find problematic. This innovation sets Lido apart from traditional governance mechanisms and may lead to a more balanced power distribution among users.
New Delay Approach for Proposals
Unlike standard time delays, Lido's version visualizes the delay based on the level of objections raised against a proposal. If a significant portion of holders expresses dissatisfaction, execution delays could stretch up to 45 days, giving users time to exit before changes take effect.
Impact on Decentralized Protocols
The ability to decouple voting power from execution authority may help Lido address long-standing trust and liquidity issues in DeFi governance. This model has already received positive preliminary approval in a Snapshot vote and, if passed on-chain, could inspire similar initiatives across other decentralized protocols.
Lido's proposal to implement Dual Governance represents a structural shift in governance, which may transform the ways user protections and protocol upgrades coexist.
