I’ll put all my heart on working out a governance reform framework in the following days. Rather than drawing a full picture and showing out, I’ll try to build it up step-by-step with all community members who have interests in this topic. The final proposal will be posted after we have broad consensus on the main frame.
First of all, let me be clear about the boundary of this reform. The proposal will only be focused on DAO treasury governance, on economic interests of all $LDO holders. Let’s call it “Treasury DAO” governance framework.
Some of the community members are preparing another governance model reform, which is called “LDO+stETH dual governance”. Let us assume this proposal will be passed. Then, considering the DAO treasury management is not included in the “LDO+stETH dual governance” framework, we could separate it from the ongoing update and have independent rights to work on it.
There will be two roles in the Treasury DAO: $LDO stakers(the principal) and Representatives(the agent). $LDO holders can choose a representative and delegated his/her votes with a staking mechanism(details TBD in the following) and become a $LDO stakers(the principal). Representatives(the agent) hold the power which the $LDO stakers empowered and participate in the treasury governance processes. Representatives all can self-delegated their $LDO to themselves, but there are some differences between self-delegated rights and delegated rights, which will be mentioned in the following.
The above is framed based on three points:
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Treasury management needs professional skills and experience, which better be done by qualified community members.
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Ownership and governance power should be somehow separated.
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To make the governance more efficient, the decision makers need to work more closely with each other and put more time on it, which is hard to carry by ordinary $LDO holders.
Incentive mechanism
There will be two pools under this framework, which will share a percentage of protocol fees owned by DAO treasury.
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$LDO stakers(80 weights): All $LDO stakers share the pool rewards based on a time-weighted and $LDO staked amount related mechanism.
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Representatives(20 weights): All Representatives share the pool rewards based on their delegated voting power and vote participation activities. Their rewards will be calculated by their votes share among all active votes in a specific period of time.
Note: Self-delegated $LDO will only be calculated in the representatives pool. You can’t have your cake, and eat it.