Lido governance process
This page explores how the decisions in Lido governance process are made.
Absolute most of the decisions made by the Lido DAO have on-chain results: either immediate transactions or transactions to be made in the future. To make sure that those decisions are well-informed, as well as properly communicated with the wider community, the governance process in Lido consists of multiple steps.
Lido Governance process
Regular process consists of several stages:
All ideas and proposals are initially published on the Research forum.
The point of this is to receive the community feedback. All the proposals go through a phase of improvements, objections.
Usual timeframe between the initial post & going forward with the proposal is 7 days. If the proposal is welcomed & feedback is incorporated, it could move on to the next step.
The next step is gasless Snapshot voting.
On the Snapshot voting power is linearly proportional to the token balance of the voter on specified block (”snapshot”). The more LDO there is on a user’s balance, the greater the decision-making power the voter gets.
Snapshot voting cadence:
Lido DAO supports monthly cadence for Snapshots. All monthly Snapshots are collected and start on the last Thursday of the month at 14:00 UTC. The voting duration is 7 days. Proposals addressing existential threats to the protocol or the DAO are considered urgent. Snapshots on urgent proposals may be started out of voting cadence.
There is one indicator for the vote to pass on Snapshot:Minimum quorum: more than 5% of the total token supply must vote for one of the variants.
In rare cases the decisions made by DAO are signaling Is Lido pro-1559?, not requiring any on-chain actions. For those successful snapshot vote is the final step.
Aragon is a DAO framework with on-chain voting as one of the crucial features.
To reduce operational burden and voter fatigue several proposals are usually combined into a package. Such packages are called “Omnibus votes”.
Script on Aragon can do different operations: update smart-contracts, any fund transfers, etc. One can use snippets from the repo.
Aragon voting lasts 72 hours and has 2 phases:The main phase, lasting 48h, is conventional voting, where one can vote both for and against.The objection phase, lasting 24h, when one can vote against or change their vote from for to against.
On-chain voting cadence:
To reduce operational burden and voter fatigue if there are several passed Snapshot proposals they are usually combined into a package. Such packages are called “Omnibus” votes. “Omnibus” on-chain vote starts 1st and 3rd Tuesday of the month at 14:00 UTC. 3rd Tuesday of the month slot is used for time-sensitive motions that can’t be postponed.
There are two indicators for the vote to pass on Aragon:Minimum approval: more than 5% of the *total token supply* must vote “Yes”.Support: more than 50% of the *tokens used to vote* must vote “Yes”.
In emergency cases votes can start without going through the all steps. The vote can be immediately started on Aragon, bypassing Snapshot voting or the Research forum. But a post on the Research forum is still highly desired as one giving the context of the proposal.
Lido on L2
Lido has token & bridging contracts on Arbitrum & Optimism. Both setups use upgradable contracts. They are managed by Lido DAO voting on mainnet through the Governance Bridge Executor contracts. More details can be found in the launch forum post.
In addition to all this, to streamline routine governance operations, some of the activities of the DAO are governed by committees.
The creation of committees occurs through a post on the Research forum and then through a Snapshot voting.
Transactions from committees usually go through Easy Track. Votings on Easy Track are based on the principle of vetoing. We place a Motion to vote and if more than 0.5% of users vetoes a Motion, it stops. Otherwise, it could be enacted.
Committees should report publicly on their activities on the Research forum.
LNOSG (Lido Node Operator Subgovernance Group)
LNOSG evolves the node operator registry so that it is as decentralized, permissionless, and secure as possible.
It creates mechanisms that reward effective node operators and ensure that ineffective or malicious node operators are minimized.
LEGO (Lido Ecosystem Grants Organisation)
Mission of LEGO is to grow the greater liquid staking ecosystem through fast and unimpeded grants to developers.
We strive to fund individuals, projects and initiatives which benefit both Lido and the surrounding space while maintaining efficiency and accountability for big developments.
reWARDS Committee tasked with incentive management for Lido liquid staking assets.
It manages incentive distribution for Liquidity Provider (LP) rewards to Lido liquid staking asset liquidity pools, money markets and other integrations.
RCC (Resourcing and Compensation Committee)
The Committee is dedicated to reduce operational burden on Lido DAO members. RCC manages the remuneration and other payout processes. It executes, tracks and reports on payroll and other contributor-related operating expenses.
Referral Program Committee
The Referral program is designed to encourage software developers of wallets and other DeFi protocols to promote our staking protocol among their users.
The Referral program committee controls the full life-cycle of the referral program.