This post explores how the decisions in Lido governance process are made.
Absolute most of the decisions made by the DAO have on-chain results: either immediate transactions or the 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.
In rare cases the decisions made by DAO are signaling (Is Lido pro-1559?), not requiring any on-chain actions. For those the successful snapshot vote is the final step.
Regular process consists of several stages: 1) forum post to kick-off public discussion; 2) snapshot vote to get DAO approval; 3) Aragon vote for execution.
Research forum →
All ideas and proposals are initially published on 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 locked in a user’s voting contract, the greater the decision-making power the voter gets.
The preferred timeline for the snapshot votings are: 1) 7 days long; 2) don’t end on the weekend; 3) end at least 24h before the next “Omnibus” Aragon vote for on-chain execution.
Aragon is a DAO framework with on-chain voting as one of the crucial features.
To start the Aragon voting we usually combine several proposals into a package to reduce the operational burden and voter fatigue.
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. “Omnibus votes” are starting at 2PM UTC on Tuesdays.
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”.
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 emergency cases votes can start without going through the all steps. The vote can be immediately started on Aragon, bypassing the Snapshot voting or Research forum. But post on Research forum is still highly desired as one giving the context of the proposal.
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 in the Research forum.
1. LNOSG (Lido Node Operator Subgovernance Group)
Evolves the node operator registry so that it is as decentralized, permissionless, and trustless as possible
Creates mechanisms that reward effective node operators and ensure that ineffective or malicious node operators are minimized.
2. LEGO (Lido Ecosystem Grants Organisation)
Our mission is to grow the greater liquid staking ecosystem through fast and unimpeded grants to developers on a mission.
We strive to fund individuals, projects and initiatives which benefit both Lido and/or the surrounding space while maintaining efficiency and accountability for big developments.
3. reWARDS Committee
reWARDS Committee is a sub-governance group tasked with incentive management for Lido liquid staking assets. Goals of the committee are:
- Planning & analysing incentive allocations to support Lido liquid staking asset pools & integrations.
- Proposing the monthly budget for incentive programs including Liquidity Provider (LP) rewards and integrations of staking assets into other products or protocols.
- Carrying on operations for managing incentive distribution for LPs to Lido liquid staking asset liquidity pools, money markets and other integrations.
- Providing the DAO & general public timely and transparent insight into previous & near-term planned incentive allocations, along with their effectiveness in terms of liquidity & usage facilitated.
4. RCC (Resourcing and Compensation Committee)
The Committee is dedicated to managing, executing, tracking, and reporting on hiring and contributor-related operating expenses for full time DAO members.
5. Referral Program Committee
The main goals are to increase the number of active stakers, grow Lido TVL and promote the benefits of stETH.
Referral program committee controls the full life-cycle of the referral program including but not limited to launch, defining total rewarding pool, allocating rewards for each period, pausing, resuming or stopping the Program at any time.