Lido DAO has unveiled a proposal to implement a dual governance model aimed at strengthening the security of Ethereum staking protocols. The framework introduces stETH holders as a secondary governance layer alongside LDO token holders, granting them veto power over critical protocol decisions.
The model specifically empowers stETH holders—who represent billions in staked ETH—to block pivotal proposals, establishing a counterbalance to LDO token-based governance. This dual-layer approach seeks to enhance decentralization and mitigate risks by requiring consensus from both stakeholder groups before implementing major changes.
Successful implementation hinges on transparent communication and community education initiatives to ensure effective participation. Additionally, the proposal emphasizes streamlining voting processes to encourage active engagement across both governance layers.
This governance evolution sets a precedent for decentralized finance protocols, promoting nuanced frameworks beyond conventional token-weighted systems. It grants stETH holders direct influence over protocol security while subjecting LDO governors to increased accountability from both governance communities.
The move aims to strengthen safeguards for staked assets by distributing governance authority and aligning incentives among participants within Lido’s ecosystem.