Lido, the largest liquid staking protocol on Ethereum, is making significant changes to its governance model. The new system introduces a two-way governance structure that allows stakers to delay or veto proposals.
Changes in Governance Model
Lido DAO members have largely unanimously approved a new two-way governance system that grants stakers (stETH holders) the power to express their objections to governance proposals. This aims to balance the current model where only LDO token holders could submit proposals and vote.
Voting Process
Under the new system, stakers will be able to register their objections by depositing their stETH assets into a special 'escrow contract.' If 1% of the total staked ETH is deposited into this contract, the relevant proposal will be postponed for 5 days. As this percentage increases, the postponement period will extend, and if 10% is surpassed, the offer will be completely 'frozen.'
Vitalik Buterin's Support
Ethereum co-founder Vitalik Buterin has supported the two-way governance structure, emphasizing that it creates an independent security layer 'especially against malicious actions' and allows Ethereum stakers to position themselves as true rights holders in the Lido ecosystem.
The changes in Lido's governance represent a move towards a more democratic decision-making process that considers the interests of all participants and underlines the importance of protecting staker rights within the ecosystem.
