Lido’s Governance Community rewinds a new proposal to give Stusted Ethereum (Steth) holders more influence in protocol decisions.
The May 8 proposalDubbeds Lido improvement proposal 28 (LIP-28), introduces a dual governance framework.
Currently, only LDO tinkers can vote on changes to the Lido protocol. This gives them full control over decisions that affect everyone in the ecosystem, including those who use ETH and receive Steth in exchange for this.
Although Steth holders are essential for the success of the platform, they miss every formal way to resist or influence DAO proposals.
The proposal of the Defi protocol is intended to give Steth holders a more active role in protocol decisions, especially in cases where proposals adopted by LDO -token holders can be considered controversial.
Respond to the proposal, Hasu, the strategy lead at Flashbots, described It as the “most important lido -upgrade ever.”
Lido is the largest liquid insert platform in Ethereum and checks approximately 27% of the total ETH deployment market. With the protocol, users can use ETH with validators and Steth in exchange. This Steth can then be used in Defi apps and offers users flexibility and liquidity.
How Lido’s double management model works
The proposed system adds a Timelock mechanism between DAO proposals and their implementation.
According to the proposal, this delay creates a chance for Steth holders to respond if a decision can influence them negatively. They would do this by locking their steth, wsteth or withdrawal NFTs in a special Escrow contract.
As soon as deposits reach 1% of Lido’s Ethereum Total Value Locked (TVL) in the escrow, a delay period starts. If deposits grow to 10% of the TVL, the proposal goes into a “anger -stop” state. This means that no action can be taken on the proposal until the locked tokens are converted back into ETH.
This model gives Steth holders a meaningful voice without forcing them to completely leave the protocol. It also enables the DAO to pause and reconsider division proposals.
