Pilot Lessons Learned
Following the completion of the Delegate Incentivization Program pilot, the Delegate Oversight Committee reviewed delegate behavior, budget use, operational mechanics, other aspects. Based on these findings, an updated program structure is proposed to extend through 2025.
Overview
Pilot Goal: To increase active governance process participation, improve the quality of discussions and feedback, and enhance Lido on Ethereum safety by involving new participants in governance through Delegation.
Pilot period: Sept 19, 2024 - March 20, 2025
Incentivized delegates: Q1: 7 incentivized delegates, Q2: 6 incentivized delegates
Pilot results: The Pilot Goal was achieved. The program successfully brought new actors into governance and improved the quality of feedback and voting participation. At the start, public delegates held no delegated LDO. Today, over 24 million LDO is delegated to public delegates — with 19 million LDO delegated to incentivized ones. Voting participation among this group remains consistently high: all incentivized delegates maintained over 70% participation per quarter.
Beyond raw metrics, incentivized delegates contributed actively to governance discussions, shared context and positions on social media, and initiated value-add efforts. While attracting additional delegation remains a broader challenge outside this framework’s scope, incentivizing already engaged delegates with meaningful voting power has proven effective.
Key Findings
1. Delegate Behavior
No evidence of abuse or low-effort participation. Most delegates met expectations.
2. Budget Performance
The quarterly budget was adequate.
3. Threshold Effectiveness
While the 2M LDO threshold served as an effective filter, we believe lowering the threshold to 1M LDO would allow more active delegates without negatively impacting delegate behavior or budget. We will review this change before the next program extension proposal, if there is one to ensure it is working as expected.
4. Platform Limitations
Making both (Snapshot and Aragon) platforms mandatory excludes valid contributors. Onchain participation is the main goal for DIP; however, we recognize some custodial tokenholders are not able to participate this way yet. We are working on these limitations and may change the program (with proper notice and input from the community) to weigh more toward onchain delegation and voting.
5. Timeline Design
Fixed deadlines for eligibility were hard to track and enforce. Rigid timing reduced program clarity.
6. Incentive Mechanism
LDO rewards calculated via 90-day TWAP were predictable and stable. The incentive mechanism worked well.
7. Funding Through LEGO
The LEGO operational rails were low-friction, with no operational overhead and no additional costs for DAO to build a new ET.
8. Interfaces & Information Design
The current setup (Research Forum + voting UI) is adequate for the program’s scale. The committee sees no need to allocate resources to a custom governance platform. Delegate reasoning shared via forum posts and vote comments has also been valuable for transparency and accountability.
9. Delegation impact on active Vopting Power
Public delegates held ~17M LDO in Q1 and ~24M by the end of Q2, despite outflows. The program helped attract and retain significant voting power.
Committee Recommendations
Core Parameters for Continuation
| Parameter | Value |
|---|---|
| Program Duration | Through December 31, 2025 |
| Total Budget | $225,000 in LDO (via 90-day TWAP) |
| Per-Quarter Cap | $75,000, with maximum 15k per delegate cap |
| Reward Currency | LDO (TWAP-based valuation) |
| Evaluation Cadence | Quarterly: eligibility snapshot on 1st day, TWAP on last day |
| Eligibility Threshold | 1M LDO delegated, either on Snapshot or Aragon |
| With anti-sybil rule: 1 address → 1 incentivized delegate, based on past delegation | |
| Gas Reimbursement | Allowed for delegates with 300k+ LDO |
| Funding | Continue via LEGO |
| Committee Update | Replace Charlie & Marcela from Agora with Brennan & Maz from Agora |
Incentivizing Delegates Below the Threshold
Returning to this discussion, the committee does not recommend incorporating sub-threshold delegates into the core incentive program. Including delegates based on participation alone creates a high risk of gaming and dilutes accountability. Instead, meaningful contributions — if they result in clear, implemented outcomes — can be supported outside the Delegate Incentivization Program via retroactive funding.
Proposal: Prolong Delegate Incentivization Program (DIP) for Q2 to Q4 2025
TL;DR
The Delegate Oversight Committee proposes extending the program through Q2–Q4 2025 with a $225K LDO budget, lowering the eligibility threshold to 1M LDO, switching to calendar-quarter evaluations, and updating Agora’s committee members. All core mechanics remain unchanged.
Motivation
This proposal extends and updates the Delegate Incentivization Program to support expert, long-term-aligned delegates in Q2–Q4 2025. It balances cost efficiency, engagement, and accountability — ensuring that Lido DAO governance remains robust and resilient.
Today, approximately 25M LDO are delegated to public delegates. Supporting this group remains essential to healthy DAO governance and ensuring consistent decision-making capacity by engaged actors.
Program Conditions
This proposal suggests extending the Delegate Incentivization Program for Q2, Q3, and Q4 of 2025 under the following conditions:
Total budget: $225,000, allocated evenly across 3 quarters
Up to $75,000 per quarter, paid in LDO at 90-day TWAP
Maximum compensation per delegate: $15,000 in LDO per 3-month period
All eligible delegates will receive equal shares of the budget
Incentivization Criteria
To qualify for incentives, a delegate must:
- Have ≥1M LDO delegated on either Snapshot or Aragon on the first day of the quarter
- Be the only incentivized delegate per address (anti-sybil rule). With a rule: first delegated - first incentivized.
- Participate in ≥70% of votes during the quarter
- Actively engage in proposal discussions and provide a rationale for decisions on the forum. Engagement is assessed by the Delegate Oversight Committee during the quarterly evaluation.
Program Process and Timeline
Eligible delegates will be determined at the start of each quarter based on the amount of LDO delegated, and disbursement that happened at the beginning of the quarter following the reporting quarter.
Eligibility: Taken on the first day of each quarter
LDO price (TWAP): Calculated from the last 90 days of the quarter
Disbursement: Conducted after committee review of delegate participation and public reporting
Committee Composition and Authority
The Delegate Oversight Committee consists of members from the Lido DAO Contributors Group and the Agora team, ensuring both internal continuity and external accountability.
It is proposed to rotate Charlie and Marcela (Agora) out of the committee and appoint Brennan and Maz (Agora) in their place. The composition from the Lido DAO Contributors Group remains unchanged.
Committee responsibilities:
- Oversee program operations
- Maintain transparent communication
- Evaluate delegate performance
- Prepare quarterly assessments
- Approve incentive disbursement
- Authority to exclude a delegate from the program
Exclusion Procedure:
If the committee determines that a delegate fails to meet expectations, it may initiate exclusion. This involves a public announcement, followed by a 7-day open discussion period for community input. After this period, the final decision is communicated publicly.
Funding Process
If approved, LEGO will fund a Delegate Oversight Committee multisig.
Upon program approval, $225,000 equivalent in LDO will be transferred to LEGO committee multisig via Easy Track motions, to be distributed per quarter post-evaluation.