Hi @Jack_Freckle, the disincentivisation of governance participation that you mention is the reason why the burning mechanism is not present in the current proposal.
I think that, if we settle on the alternative proposal, the straight burning mechanism should be replaced with an escalation game where, if stakers oppose a proposal, DAO members have to explicitly bond LDO for the proposal to remain executable which might lead to their LDO being jailed if they cannot collectively outbond stakers. This makes the risk of LDO jailing explicit and disconnected from voting, so you’re not automatically risking LDO when voting, you have to perform an explicit action to take on this risk. I’ve roughly described the game here.
That said, I’m still in favor of the main proposal (without the burning/jailing mechanism and relying on negotiations and foot voting instead) since I think foot voting, if it can be done easily and safely, is superior to any mechanism that tries to fix the DAO somehow.
Yep, the DG technical design allows supporting multiple voting systems at once, including Easy Tracks.
That said, I don’t think governance decisions not related to changing the rules of the node operator set, upgrading the code, or making other significant changes like adding/removing oracle operators, should be under the scope of the DG.
First, as the result of extensive discussions with the protocol contributors (including @psirex, @sacha, and @ujenjt) and external researchers, the mechanism design was updated to better reflect the first design principles and to prevent several types of attacks that were discovered in the process.
Second, together with the contributors, we’ve prepared the system architecture specification and the code (the latter is WIP and doesn’t fully comply with the spec yet).
There’s also a copy on HackMD for convenience (Mechanism design, Specification) but all future updates will be published to the repo.
The list of changes made to the mechanism design and the reasoning behind them can be found in the Changelog section of the document (the last version previously announced in this thread is 2023-12-05). The principles behind the system design remained the same, all changes were directed at better reflecting those principles and removing potential vulnerabilities.
Like, for incentivized delegation (or any governance participation, to that end) to reach the optimal outcome for the DAO, incentives should be proportional to some measure of the outcome’s optimality. Otherwise, if governance participants are incentivized to just participate, no matter the outcome, the optimal strategy for them would be to just follow the leading voting outcome, which would make the governance system very fragile.
One of the potential ways of measuring how optimal the outcome is is using a prediction market: when you vote, this vote starts a prediction market for the predicate “the supported option increases some DAO objective or set of objectives”, and you get rewarded in a token that’s bound to a fork where this predicate is true. It’s not the only way and it’s just a rough idea, and I’m sure there’s already some research or maybe even some practical applications.
That’s the hardest question in any design like this, and I don’t have a good answer tbh. Simplistic functions like LDO price, stETH/ETH price, or protocol TVL won’t work on their own, and how to properly define a more complex function is a question for non-trivial research.
Lido actually does not need to issue tokens, because as a governance token, it theoretically has no value. If you need to use governance tokens for voting, STETH is enough, and it is recommended that the official destroy all LDO tokens. lido officially has a governance token STETH, which is enough
If you really want to empower tokens, I have a little suggestion. Let the nodes participating in the verification lock LDO tokens worth 2 Ethereum. If needed later, you can lock up the LDO tokens and participate in the eth staking income
lol there will be another class action lawsuit against Lido, if you guys dont prioritize $LDO holders. bet on it. this whole line of “research” sure are a lot of words to say, “very little point to holding LDO” sorry for you loss.
It’s not subdao (“steth votes”), but more of a dynamic timelock thing (“steth holds the exit door”) designed to be pretty loud as well (“steth displays discontent loud and clear”).
At Node Guardians, we are honored to have been selected as node operators for the Simple DVT module in collaboration with Obol and SSV. Consequently, we have been developing content on dual governance and are excited to share our humble contribution to the Lido community.
The quest will serve as a resource for learning about Lido’s new dual governance model. By the end of the quest, readers will be made aware of Lido’s proposed dual governance model, the reasons behind it, and its implications.
Like all theory articles on Node Guardians, this quest will be accompanied by a multiple-choice quiz to reinforce the reader’s knowledge of the concepts covered.
The general flow of the quest will be as follows:
Brief introduction to Lido
Lido’s existing governance
Easy, Normal, Emergency tracks
stETH holders and LDO holders
Limitations
Lido’s dual governance
Veto Process
Rage Quit Mechanism
Advantages
For those who may be unfamiliar or curious about the relationship between our educational platform and our node operations, our thesis is simple: we believe that rewarding operators who do not contribute to the ecosystem’s growth of a system is a poor use of capital (kudos @JonCharbonneau).
We hope you find this resource helpful and we will make sure to keep it up to date!
