Proposal to approve Lido DAO Treasury Management Principles and authorize the formation of a Treasury Management Committee

Problem Statement

We define Lido DAO’s treasury as all non-native tokens1 held in Aragon which includes the stETH left over in the DAO after accounting for rebases and node operator transfers, as well as ETH or stablecoin proceeds. This treasury has a primary function, to protect the integrity of stETH and ensure the robustness of the protocol. On top of that, it is also meant to fund expenses that contribute to research and development.

However, there are no explicit rules nor delegates with authority sourced from LDO token holders to take specific actions that can help manage the treasury.

We’ve considered solving this by polling individual policies to token holders, but there’s a risk that this increases the burden on LDO holders who may not have the bandwidth to study the proposals closely. It also diffuses responsibility which could be less effective than empowering an accountable, smaller, group to look at issues in greater depth.

Furthermore, additional dynamics such as USDC’s recent mismanagement of banking exposure and the token’s subsequent depegging have illustrated the single-order and second-order risks to holding large amounts of stablecoins (in this case, Dai is exposed to USDC through the Maker PSM2). This event in particular reinforced the importance of proactivity and having principles outlined in advance. We are picking up the thread on Hasu’s desire (recommending a common practice) to see the creation of a new committee that would be charged with the development of principles to guide the management of the treasury, and be authorized by token holders to execute on them.


This proposal is asking for the approval of a few key Treasury Management Principles (Principles), and the creation of a Treasury Management Committee (Committee) to put forward Treasury Management Strategies (Strategies) constrained by the Principles, and Treasury Management Actions (Actions) to execute them using On-chain tools.

Treasury Management Principles

  1. ETH is Lido DAO’s primary Unit of Account, interchangeable with stETH through deposits and withdrawals using Lido

  2. Lido DAO’s treasury is the source of its resilience and future growth, and can fund initiatives that further the protocol’s decentralization and network security objectives

    1. The purpose of Lido DAO’s treasury is to support the integrity, growth and robustness of the Lido protocols
    2. The treasury may also be used for funding many initiatives, including but not limited to, research, maintenance, development, education and advocacy that further the decentralization and network security objectives of the protocol
  3. Risk of loss to treasury funds should be minimized at every instance

  4. All treasury ETH must be staked using Lido

  5. Token holders have the ultimate say

    1. Token holder decisions can can amend and update the Principles, as well as override the Committee through separate on-chain votes

* (nb. 20,304 ETH at time of writing)

Treasury Management Committee

  1. A Committee should be formed to maintain and execute policies

    1. Token holders authorize the formation of a Treasury Management Committee composed of members (alt. signers) around a multisig that will be allowed to submit a narrow set of possible Strategies and activate their corresponding on-chain Actions, constrained through On-chain tools
    2. The Committee multisig will strictly never take custody of Aragon funds and will use a suitable technical solution for executing swaps in a permissionless way
    3. This 4/7 multisig will be composed of 7 individual members or entities and will not be authorized to function with fewer than 7 members
    4. A new signer who doesn’t otherwise participate in the Token Rewards Program will be eligible to participate. This will enhance governance decentralization of Lido DAO by adding new members over time consistent with the loyalty to the project. These signers would be eligible to receive the equivalent of 25 ETH a year in LDO tokens, priced on the day the signer joins the multisig for the first time (subject to usual TRP rules including milestones)
    5. If any signer fails to register their approval or rejection on at least 50% of the Actions proposed in a given year, their TRP program membership (if any) will forfeit and the signer will be rotated from the multisig and removed from the Committee
    6. Members will retain membership of the Committee until they offboard either of their own accord or by token holder demand, forfeiting any pending TRP tokens, and leaving the multisig seat open for new prospective members to be approved by token holders
    7. Deliberations, Strategies, and Actions will be communicated transparently to the DAO and the community is encouraged to engage, propose and participate
    8. New prospective members can apply in public forums to empty Committee seats and request approval of their inclusion into the Committee by token holders, an approval which will instruct the Committee to rotate the new member/s onto the empty place/s on the multisig
  2. Committee may submit Strategies and enact Actions

    1. All Strategies must be encodable into Actions through On-chain tools

    2. All deployed on-chain Actions will allow for at least 72h of token holder veto periods prior to deployment or execution

    3. The Committee will submit these Strategies in the following way:

      1. The committee will publish a forum post submitting the Strategy (e.g. sell stETH in Aragon for one of a pre approved list of tokens)
      2. No sooner than 7 days from the moment it is published, the treasury multisig can initiate the start of an on-chain Action or series of Actions
    4. The Committee will regularly provide transparency reports

  3. Committee may propose modifications to authorized Strategies

    1. The Committee may elect to propose changes or new Strategies, provided they are encodable into Actions through On-chain tools

      1. To enact a new rule or change, the Committee will publish a forum post outlining the change to request comments and allow for a feasibility study
      2. No sooner than 7 days from the moment it is published, if suitable as an on-chain Action, token holders will vote on the approval of the deployment of an on-chain Action to reflect the new Strategy, or change in Strategy
    2. The Committee will maintain an up-to-date frontend listing the Principles, all of the Strategies they are authorized to submit and links to the relevant on-chain Treasury Actions for these rules

    3. The Committee will only be able to propose changes or new rules provided 4/7 members register their agreement with the proposal

    4. Community members may propose a new Strategy to the Committee for consideration, but the Committee will need 3/5 members to register their agreement prior to submitting these changes

  4. Committee mandate is bounded by token holder approval

    1. Token holders may choose to dissolve the Committee at any time through a vote, following which the Committee will disband, terminate the TRP if necessary and remove its access from any on-chain motions
    2. Should an overall governance framework be agreed on by token holders at a later date, this could lead to the ratification, modification or dissolution of the Committee
  5. Committee’s ultimate objective is to automate itself

    1. The Committee is charged, in the long-term, with identifying and implementing ways of automating its deliberations and replacing the function of the Committee with permissionless smart contracts with no dependencies, capable of replacing the above workflow in a neutral manner

On-chain tools

These are on-chain contracts or function calls, such as EasyTrack motions or Aragon votes, that can execute any Actions triggered by the Committee multisig. Token holders authorize the Committee to request the development of new Actions to the Lido Contributors Group. Alternatively, token holders authorize the Committee to propose development projects to the Lido Contributors Group, with separate funding requirements, if needed. Any new development must undergo strict security procedures and audits prior to being used in production.

Treasury Management Strategies

An example of the Strategies that could be submitted by the Committee are the following:

  • Hold no more than 6mos of estimated working capital to fund research, development, education and advocacy initiatives (based on approved budgets) in stablecoins in Aragon
  • Hold only DAI, LUSD and USDT in stablecoin reserves (60% USDT, 40% DAI)
  • Only use Cowswap as a pre approved trading venue

Treasury Management Actions

An example of the Actions that could be executed by the Committee are the following:

  • Stake any ETH held in the Aragon treasury using Lido
  • Sell stETH or any other tokens in Aragon for one of a list of preapproved stables through a preapproved trading venue

The example flow for enacting a Action to sell stETH for stablecoins could look like the below:

The example optimistic governance flow from Strategy proposal to Action enactment:

Initial Treasury Management Committee composition

The below slate of prospective Treasury Management Committee members helped, among others, in producing this proposal and is proposed concurrently with this vote. Note that karpatkey and @marcbcs are Lido DAO members who are not pre-existing contributors. They will be entitled to apply for membership in the TRP program based on the rules approved in the Proposal.


The proposed initial composition of the Committee is as follows:

Non-voting committee observers, not eligible for TRP, but motivated to contribute to discussions:

Community discussion

Please provide your thoughts and comments on the above. Thank you for your time and consideration of this proposal.


  • Increased threshold to 4/7
  • Added @Mol_Eliza and @kadmil
  • Included the provision that the TMC will seek to make itself obsolete with smart contract deployments
  • a missing apostrophe
  • clarifying language

1 No DAO should ever count its native tokens in its treasury
2 Steakhouse Financial serves MakerDAO in various capacities, and collaborates with karpatkey on reporting for the ENS endowment


In full support & looking forward to actively participating / collaborating with everyone.


Great proposal @steakhouse. Really excited to see further focus on improving Lido’s Treasury Management - specifically the increased efficiency that is set to come with this proposed Committee.

As for questions and suggestions surrounding this proposal, I’ll post them all on this forum tomorrow.


I applaud the thought and work that went into this proposal and the design of mechanisms to act as guardrails and constraints. In general I think this is a good initiative and worth advancing, but have a few suggestions:

  • The composition of the committee seems somewhat under-represented by full-time / direct Lido contributors (independent parties + financial services contributor org (servicing other DAOs / customers, too) constitute a majority in concert). Need to think on this a bit more, but e.g. having the “interim” signer be a permanent position that only votes in potential emergencies would be useful, as well as ensuring that the decision threshold is > 3. (To be clear, I think 4/7 here is a much better consensus threshold than 3/5, and allows for more robust committee makeup).
  • From the proposed committee members who are not active contributors, I would like to see a profile and statement of interest / intent, as well as some sort of linkage to prove authenticity of the account (eg karpatkey account has only posted once and is not linked to the karpatkey organization in some evident way).

I feel like that the committee in general may be missing the presence of a more “contrarian” participant who will challenge actions to help facilitate well thought out execution every time, and also offer a different perspective on the goals of the committee. For example, a committee composed of relatively fiscal conservative and traditional “the DAO needs to be like company that operates in the black by Year 2” members would likely have sold large ETH and stETH positions during semi-local tops (in the summer of this year, and a few weeks ago), which would obviously have put the DAO at a disadvantage going forward. Those decisions may have been “right” in that local context, but there’s a need for someone who believes that the DAO is essentially inextricably tied to Ethereum (and web3/crypto), and is essentially long ETH in perpetuity. IMO treasuries such as this should be managed with a light hand, with conviction, and overall alignment with the end-goal.


As noted yesterday, please see below for my main questions and suggestions regarding this proposal:

Is there any particular reason that you suggested a 3/5 multisig over a 4/7? I feel that the latter may be better, especially to give the opportunity to broaden the scope of Committee members.

What’s the incentive for Committee members not eligible for TRP to continue voting consistently?

How is the amount of LDO required to veto a Strategy determined?

This is great.

As for my thoughts on the proposed Committee, I’m in total agreement with @Izzy.

These are all great comments, thank you for the discussion.

The reasoning behind a 3/5 was the thought that there should be enough mechanisms to prevent any malicious behavior. However, the point is taken, 4/7 is anyway a higher security threshold and we can address the composition of DAO members reasonably quickly too. Will reflect in edits above.

Perfectly fair request.

For what it’s worth, this philosophy perfectly captures the @steakhouse position on this committee, couldn’t have written it better.

EDIT: are there any thoughts around 4/7 vs 5/7? The intent really is to make changes very difficult to implement and require almost total consensus regarding the suitability of a proposal. This should smooth out extreme proposals and default to keeping the Treasury as-is. If the threshold were higher and the Committee happened to be totally ineffective, it could be disbanded reasonably quickly without damage to the DAO or the Treasury. On the other hand it could also be overly sensitive to Type II false negatives and essentially allow filibustering.


Personally, I’d be all for a 5/7 - but I’d like to see which 7 Committee members are proposed first.


Hi everyone. Thank you for considering us for the initial composition of the Treasury Management Committee—a position we’d gladly honour.

We’re a DeFi-native organisation specialising in professional treasury development through industry-leading research and tooling since 2020. We’ve been working with GnosisDAO, Balancer, ENS, and CoW Protocol, to diversify their treasuries into sustainable portfolios of DeFi investments designed to support the DAOs in their missions.

We’ve posted this tweet to prove the legitimacy of our Lido forum account.

For what it’s worth, this philosophy perfectly captures the @steakhouse position on this committee, couldn’t have written it better.

We’re drawing on our deep experience working with large decentralised organisations to share our perspective here. From @Izzy’s comments and echoed in @steakhouse’s statement, many within Lido DAO aspire to build a neutral middleware for decentralised Ethereum staking and set up structures that will last the test of time and resist human corruption. This is consistent with the structures of other DAOs we have worked with that aim to evade sources of instability, such as censorship or network degradation, as a means to reach eternity.

The challenge we’ve typically faced has been that DAOs experience a significant mismatch between their revenue and cost base. Normally, the former is some form of native crypto token, and the latter is usually indexed to the currency real-world currencies are in. Because crypto is still a relatively small market, the DAO’s operations face significant price volatility risk when paying for ongoing expenses that help secure and build the protocol.

In this environment, it’s imperative to control Balance Sheet volatility and provide a sustainable runway for DAOs to operate. We’d advocate adopting a financial and objective mindset to diversify the DAO’s treasury and spread the risk against the lower bound of the risk curve, similar to an endowment fund.

It’s also necessary to have the right technology in place and a better operational framework to address DAO requirements around transparency and immutability and adopt effective preventive mechanisms to respond to market risks.

We’re also huge proponents of collaboration through cognitive diversity—as we believe it generates better decisions—so we welcome and would be happy to work with different ideas moving forward.


Gm all!

@Izzy raised a good point about the committee members so here comes my intro.

It would be an honor for me to become an active contributor and help make Lido better. It all started with discussions on this forum on how to manage the Treasury and I’m glad we are moving towards a more solid solution with the TMC.

A bit of context on my background, IRL I’m an economist and management consultant. I work on strategy and operations projects for all sorts of companies, from startups to large corporations. I have been involved in crypto for the last 3 years researching, using it, participating in DAOs and working with crypto startups on fundraising and growth. When I think about how to manage the Lido Treasury, I believe that we have a unique opportunity to set an example by making ETH our reserve currency (and stake it with Lido!), and that we have to make the best use of our funds to ensure we run Lido smoothly and minimise the exposure to Government tokens (aka stablecoins).

I hope to get the support of LDO hodlers to work on this from within the TMC but if I don’t, I’ll continue contributing through this forum.


gm all! Massive shout-out to the Steakhouse team on the proposal. I’d say having a dedicated committee for Treasury management is really valuable, looking forward for the proposal to go further.
Would voice a nitpick on 3/5 vs. 4/7 composition. While per proposal the multisig of the committee won’t (at any time!) hold any funds, 4/7 is more widely used across different Lido DAO committees. Not a blocker, but something to bear in mind. For wide community — as strategies would be posted with “feedback time” before any actions are taken, please, chime in!


Echoing others, I am excited to finally see this taking its initial shape. Agree with 4/7 for the reasons mentioned previously. I also believe @Izzy’s position to have a bit of maxi representation is healthy to create a bit of balance in the decision making process.

Working with @steakhouse and the other proposed members will help close part of the loop around financials and how to put idle capital to more efficient use in a risk-minimizing way for budgeting processes.


Hey there @karpatkey, @marcbcs, @steakhouse, @pipistrella, @sabrychiaa, @Mol_Eliza, @kadmil
Could you please provide here a verification of the address that you plan to use if the proposal accepted by the DAO and the committee is created? :pray:

Please use this guide to create a verification and post it here, thank you!


Thanks for sharing the guide, will do it asap


Kadmil is looking to join Lido Treasury Management Committee with address 0x9a3f38af97b791c85c043d46a64f56f87e0283d4


sabrychiaa is looking to join Lido Treasury Management Committee with address 0x83a8b5c6990cbc78ffc45cbbfe5748b895973623


how do we know these are good faith actors?

vitalik controls 4/7 votes for exactly this reason

so we’re potentially giving control of a giant treasury to people on the internet?

last time we had some stupid vote like this we gave dragon fly 10 million usd of LDO tokens and they sold to some boomer hedge fund who is dumping ldo non stop

so how do we know these people are not going to sabotage the $$ the way vasily, cobie & co. did by going long ethereum at $4000 usd per coin?

“We”'re not giving control to anyone. If you look at the details of the proposal, this Committee will never actually withdraw or hold any funds. All they will be empowered to do is propose principles, structure them into on-chain motions and execute them optimistically.

They can be overruled at any point by LDO token holders, who furthermore have to approve the existence of the Committee in the first place. It is purposefully difficult for the Committee to do anything at all.

You don’t have you trust them, you just have to check their work and if you are not satisfied, vote accordingly. The threshold in the proposal will be 4/7 nevertheless.


why does this need to be formalized like this?

why cant it just be loose w how much runway we have in stables and speculative assets like eth?

all this on chain stuff executed optimistically sounds like a wonderful attack surface for black hats … not to mention introducing a new governance model u cannot account for all scenarios … lido is still new … why cant there just be an informal discussion about all this w proper transparency? why does it have to be formalized like this and only use cowswap (which is relatively new).

were you not arround for the “DAO hack” ? the more stuff we do on chain, the more we open up from security threats. there will already be enough at stake with likely the entire defi ecosystem being built on top of stETH and wstETH going forward.

would like to see the reason why this cant be informal operation operating on this message board, and why is MUST be on chain at this point in time. like whats the upside here? the downside is huge, but whats the upside.

also notably, you say we can just “vote” but < 50 holders control over 50% of the supply, all of which likely know each other - $2.55 | Lido DAO Token (LDO) Token Tracker | Etherscan

ALSO, all the people u mention to be members of this new on chain committee, how much crypto experience do they have? have they been around since the DAO hack or earlier? a lotta noobs around these days and unless u have the battle scars of previous cycles u prob gonna lead us to slaughter in some form

the downside is significant, is the upside 100x? i dont think so. i dont even think its 10x…

see this thread for reference - why cant we just have this instead of a formal committee