[EGG] Lido Labs BORG Foundation Grant Funding Request

[lidolabs-operations]

UPD 14/03/2025: As part of internal discussions, contributors have made wording clarifications in the proposal. The requested amounts remain unchanged. For transparency, here’s the IPFS link to the original proposal: https://ipfs.io/ipfs/bafybeieivkxu3yt5z7qvxq5kthvlbntpamjvvidnewih6aer42oyvcpxqa.

tldr

Seek grant approvals through 2025-12-31 to the Lido Labs BORG Foundation to advance protocol research, development, and governance initiatives with a focus on Lido v3 implementation, as well as facilitating maintenance of the Lido on Ethereum protocol.

Basic Data

Field	Description
Proposal Name	Lido Labs BORG Foundation Research, Development and Maintenance Initiative
Which of the following GOOSE goals is your proposal advancing?	GOOSE-2 goals: #1 Lido DAO Has Effective and Decentralized Governance; #2 Lido protocol Attracts the Best Validator Set in the Market; #3 stETH is the most used token in the Ethereum ecosystem
Proposed scope of work	Protocol R&D, Lido v3 Implementation, Dual Governance Development, Security Research, and facilitating maintenance of the Lido protocol
Objectives	1. Drive technical research and development for Lido v3 Staking Infrastructure for a diverse product line, 2. Strengthening DAO Governance Infrastructure and Decentralization, 3. Advance Decentralization of Ethereum, 4. Lead Protocol Research Initiatives
Total Budget Request and Best Before Dates	Budget request includes $34.88m through 2025-12-31.

Lido Labs BORG Foundation Grant Funding Request

	1-Decentralised Governance	2- Validator set	3 - stETH Adoption	4- Support	Grand Total
G&A	0.34m	2.03m	0.83m	10.08m	13.28m
R&D	7.60m	5.25m	5.44m	3.31m	21.60m
Grand Total	7.94m	7.28m	6.27m	13.39m	34.88m

Strategic Priorities

1. Drive technical research and development for Lido v3 Staking Infrastructure for a diverse product line

• Advance the technical development of Lido V3 through:
  • Creation of technical architecture specifications and documentation
  • Development and testing of Lido Core and stVaults architecture allowing custom staking setups with access to stETH liquidity
  • Development of smart contracts, oracles, services, and tools for the Lido V3 staking infrastructure
  • Security audits and test suites
  • Integration support for Early Adopters

Key Performance Indicators:

• Development milestones achieved
• Security audits completion and resolution
• Successful testnet deployments and mainnet Lido on Ethereum protocol upgrade under the Lido DAO design and implementation approvals
• New staking product lines and integration cases launched

2. Strengthen DAO Governance Infrastructure and Decentralization

• Dual Governance Release – Launch and integration into governance processes
• Research the ways to align long-term LDO holding with the success of Lido on Ethereum and propose approaches to the DAO
• Governance Tooling Improvements – Reducing voting fatigue, increasing efficiency, and ensuring DAO accountability.
• Governance Documentation & Guidelines – Maintaining transparency through clear, up-to-date governance materials.
• Community Education – Expanding awareness and engagement in governance processes.
• On-Chain Security & Operations – Ensuring secure, error-free execution of DAO transactions and committee actions.

Key Performance Indicators:

• Active Voting Power – Tracking participation levels in governance.
• Operational Security – Zero critical errors in governance execution.
• Attack Vectors Mitigation – Strengthening governance resilience
• Community Engagement – Measuring involvement in discussions, proposals, and education initiatives.

3. Advance Decentralization of Ethereum

• Strengthen protocol and network security and decentralization through:
  • Increased permissionless participation via either upgrades and increased scaling of current permissionless modules (CSMv2) or new modules proposed and developed by the community (SSVLM)
  • Further research into optimal node operator and validator sets, and continued best in class transparency and community betterment via initiatives such as VaNOM and DUCK (open source institutional grade controls and risk framework for node operators)
  • Upgrades to the Lido protocol to adapt to new Ethereum features, such as Triggerable Withdrawals and increased Max Effective Balance, which increase protocol security and optimize protocol network footprint

Key Performance Indicators:

• Percentage of stake operated using DVT and via permissionless entry
• Number of unique node operators
• Distribution and decentralization of stake
• Maintenance of leading protocol performance
• Maintenance of leading rewards effectiveness

4. Lead Protocol Research Initiatives

• Research the impact of EIPs on Lido protocol to provide contextual analysis and develop strategies for minimizing potential risks to the protocol
• Develop research contributions at the intersection of Ethereum and the Lido protocol to actively participate in protocol discussions (e.g. research into scalability solutions, investigation of new staking mechanisms)
• Explore the design space for an open validator market within Lido protocol, enabling differentiated service offerings and a dynamic fee structure that aligns rewards with each validator’s risk profile and decentralization impact
• Analyze market and industry signals to anticipate the major market shifts and provide strategic options for Lido protocol’s growth enabling proactive responses to emerging trends
• Explore opportunities to enhance protocol revenue and drive greater user engagement in Lido protocol’s staking ecosystem (e.g. exploration of cross-chain opportunities)

Key Performance Indicators:

• Research papers published
• Technical proposals published on research forums
• Broad Ethereum-wide research participation
• Community feedback on research initiatives

Additional Info

LDO token holders have approved that Lido Labs BORG Foundation oversees and legally “wraps” the LEGO committee (0x12a43b049A7D330cB8aEAB5113032D18AE9a9030). LEGO committee continues its existing grant (quarterly limit of $0.5m with LDO share <= 20%) to further ecosystem grants and experimentation as originally approved.

Next steps

If the proposal is supported, funding for disbursement to finance Lido Labs BORG Foundation would be requested from the DAO via Easy Track motions to the operational multisig (0x95B521B4F55a447DB89f6a27f951713fC2035f3F).

Lido Labs BORG Foundation will aim to deliver quarterly community calls to review accomplishments and key results and actuals reporting.

[Nansen]

As a relatively new participant in the governance forum, we may have missed prior discussions that address some of the questions below. We’d appreciate if the proposal could be updated with relevant references for completeness and ease of comparison.

Budget Granularity

The budget is broken down into broad categories with a split between G&A and R&D. However, additional granularity on specific budget items (e.g., activities within R&D and Support, legal and compliance, audits, outsourcing, training, etc.) would provide better benchmarking and comparative analysis.

• How does this budget compare to other (staking) providers?
• What are the key increases or decreases compared to previous years?
• Are there specific cost drivers that have led to significant budget changes?

Outcome Measurement

The proposal outlines broad objectives—such as Lido v3 implementation, dual governance, security improvements, and research—but many of the KPIs are open-ended and lack clear, measurable success metrics.

For instance:

• How will the success of validator set expansion be measured? Will it be based on the number of new operators onboarded or decentralization metrics?
• What specific milestones or benchmarks will be used to track progress?
• Consider rewriting KPIs into a OKR format at least into a impact and measurable format

Greater clarity on these KPIs would improve accountability and help assess the proposal’s impact over time.

Sustainability & Forecasting

Has the budget factored in recent market conditions? Treasury assets and revenue have declined significantly with the market cooldown over the past month. While many initiatives aim to enhance long-term sustainability, understanding how budget allocations were prioritized and whether the plan is financially viable under current conditions would be helpful.

• How does this budget compare to prior years’ requests?
• How much of last year’s budget was utilized, and were there unspent funds?
• Has contingency planning been considered? For example, if market conditions worsen, would this budget constrain other initiatives?

Incentives & Accountability

It may be worth considering performance-based spending unlocks on a quarterly basis. This approach would:

• Ensure funds are allocated to high-impact initiatives.
• Allow for adjustments based on delays or evolving market conditions.
• Hold contributors accountable for progress, timeliness, and stakeholder engagement.