We are renewing our focus on policy & governance at Lido, and are asking the community (we need a name) to discuss and vote on a rewards committee. As we get used to proposing more of these structures, a framework will be needed to standardize the process going forward.
Lido is a DAO. DAOs are by definition supposed to be decentralized. It is paramount the community behind a DAO increasingly make all key decisions. However, as a DAO grows and becomes complex, there will be an increased need to delegate minor or highly specialized tasks to reduce operational burden. This way, we hope to reduce voter fatigue on matters they might lack the time, interest or technical expertise to carefully consider.
All DAOs face this challenge. A balance between direct community involvement and delegating responsibilities.
There will be a snapshot vote 3 days after posting or when community discussion has resolved to an optimal outcome.
Thanks in advance for reading and commenting on the rewards committee proposal.
Create a governance committee dedicated to managing, deploying, tracking and reporting incentives for Lido assets.
Allow the committee autonomy to deploy allocated rewards budget as they see fit with monthly reporting on the decision-making process and community feedback. There will be broad categories around each of the initiatives as well such as ‘maintain liquidity’, ‘increase usage in DeFi’, ‘facilitate trading volume’ etc. These will come with category breakdowns.
Currently Lido is allocating ~$15M(USD) $LDO rewards across a number of different pools each month with more coming online. The current process is cumbersome and lacks proper clarity on the efficacy of the programs.
Sushi, 1inch, Curve, Balancer, Saber, Raydium, Mercuial and Orca. These are only AMMs. There will be additional needs to allocate incentives to lending platforms, aggregators, new DeFi protocols and new ecosystems as we increase our integrations.
The current process requires a community proposal to add new incentives to a pool, snapshot vote to pass, and then on-chain voting to disburse the funds.
This is slow at times while also increasing voter fatigue in governance.
The weekly Omnibus was a great first step of bundling operational expenses into a single vote. After this came LIP-3 Easy Track Motions to streamline routine voting decisions which this proposal will build on top of once fully implemented.
I propose a founding committee of current members already working on the rewards distribution and a member from the community to start. Later it might be prudent to have a representative from each protocol Lido is built on added (this might become burdensome).
Proposed starting wards
- jbeezy from Lido, business development
- GrStepanov from Lido, has been managing technical integrations
- kadmil from Lido, has been managing incentives and on-chain omnibus
- Alex Beckett from community, has been an active and engaged supporter
- Felix from Chorus One, managing stSOL go to market
- Kai, currently building stLuna for Terra
The reWARDS committee should be considered part of the Financial Operations Team along with the LEGO committee. The Financial Team will be proposed at a future date.
Use of Easy Track Rewards Executors to initiate funds. This guarantees rewards are only sent to whitelisted addresses ensuring all funds are accounted for.
All new whitelisted addresses are voted on by the committee before being added. Initial candidates are listed below in breakdown. All whitelisted addresses eligible for rewards are listed along with corresponding amounts in the monthly report.
Rewards distribution will start with 4/6 signatures and move to a higher security threshold with new members within 3 months.
At the end of each month, the committee will publish a report on locations, amount and efficacy of incentives for each platform distributed. This report will also request a tentative budget for the following month in $LDO to be allocated as they see fit within that budget and with community feedback taken into consideration on each reporting period.
A reporting period will be 3 days of community feedback followed by a snapshot vote only if feedback is contentious or changes outcomes.
The $LDO will be managed by a public multi-sig controlled by the wards without the need to actually hold them.
With easy track the multi-sig wallet is able to pull funds out as needed and can only send them to approve whitelisted addresses.
I propose an initial committee member review within the first 6 months pending proposal approval to discuss change management and/or areas for improvement.
Due to specifically how easy tracks works there is not a ‘real’ cap on budget but accountability and oversight will ensure the committee is not sending excessive funds to a whitelisted address.
For Solana addresses, there is a slightly different process due to the bridging via Wormhole so the ETH side address will be whitelisted to start.
6,000,000 $LDO is the proposed budget for the first calendar month following a successful vote. This allows for room to grow incentives and flexibility for unknowns.
The additional ~1,800,000 LDO over current spend is earmarked for expansion of rewards on Solana with the addition of new pools and protocols. This will be accounted for and added to the whitelist as they come online pending approval of the whitelist additions.
- Streamline routine voting around the rewards program which is a critical part of Lido strategy
- Increase transparency about efficiency of the rewards program with reporting
- Lower the operating overhead for initiating new rewards or continuing existing ones
- Allow flexibility to try new rewards strategies
- Increase community feedback
- Decrease spend on lower utilization pools