Dear Tane,
Thank you for your thoughtful and comprehensive proposal to improve the Lido Delegate Incentivization Program. Your analysis of the current situation and the proposed scoring system offer valuable insights into how we can enhance governance participation and the quality of contributions within the Lido DAO. I’m inspired to offer some of my thoughts and feedback on your proposal, drawing from my policy experience in Asia.
Expanding the Governance Framework
The governance scorecard approach, implemented in other ecosystems like Compound and Uniswap, is also found in well-established governance ranking systems such as the ASEAN Corporate Governance Scorecard (ACGS). The ACGS has been instrumental in benchmarking corporate governance practices across a diverse region of over 600 million people, driving consensus around economic, political, and social stability. By adapting these underlying principles, we can develop a governance framework for Lido DAO that evaluates delegate performance across multiple dimensions over time.
The core idea is to create a transparent and consistent evaluation method that suits decentralized ecosystems. This governance scorecard would not only assess voting participation and proposal authorship but also measure long-term commitment, strategic contributions, and collaborative efforts among delegates.
Incorporating Global Best Practices
Furthermore, incorporating best practices from global governance models, such as the OECD’s Framework for Anticipatory Governance of Emerging Technologies, can enhance our approach. Key aspects to consider include:
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Strategic Intelligence: Identifying (current and future) key pain points of coordination, for the informed development of governance strategies among different stakeholders within the DAO. I am currently orientating myself with the forum threads which has provided very rich discussions and the various subcommittees established, such as LEGO, Treasury Committee and the Community LifeGuard Subcommittee. If there is anything I’ve missed, would appreciate a secretariat function in the DAO to help consolidate. I saw @Boardroom’s updates and perhaps this could be a start!
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Inclusive Participation: Encouraging diverse voices in the governance process by fostering non-adversarial forums where delegates, community members, and other stakeholders can collaborate and share insights. This inclusivity can lead to more robust and well-rounded governance outcomes. Based on the GOOSE yearly cadence of proposals, I hope to present an APAC-based proposal with more regional specificity (given this is where WPRC is based), based on the timelines shared by @Jenya_K here: The Guided Open Objective Setting Exercise (“GOOSE”) proposal; A genesis step to jump-start a DAO-wide goal setting exercise and cadence - #9 by Jenya_K
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Stakeholder Engagement: Recognizing the importance of engaging with various stakeholders, including node operators, stakers, and developers, to ensure that governance decisions align with the broader interests of the ecosystem. By integrating regional perspectives from Asia and adhering to a structured timeline over sustained engagement and workshop dialogues, we can enhance inclusive participation and ensure that governance processes are informed by a wide array of insights and experiences.
Addressing the 2 Million LDO Delegation Threshold
One area to consider is the current requirement for delegates to secure a 2 million LDO delegation to qualify for incentives (to my understanding). While this threshold aims to ensure that delegates have substantial governance power, it may inadvertently exclude valuable contributors who are committed to the long-term success of Lido DAO but find it challenging to amass such a delegation within a set timeframe or onboard and orientate more Web3 governance enthusiasts new to the Lido community. This difficulty is particularly pronounced for new entrants and smaller stakeholders who may lack the networks or resources to quickly gather such substantial support. Although this threshold does not preclude delegates from participating in governance discussions, it does impact their eligibility for economic incentives. As a result, dedicated individuals who are actively contributing may feel undervalued or demotivated due to the lack of recognition and support.
In the recent Network State Conference, Singapore, along with Crecimiento and Dubai, were heralded as model cities to draw inspiration for network states. Drawing inspiration from Singapore’s transformation under the leadership of Lee Kuan Yew, one of the key policies that propelled Singapore from a modest village in the 1970s to the thriving metropolis it is today was the emphasis on home ownership. Families were encouraged to own their homes, which instilled a deep sense of commitment to their communities and the nation’s future. This tangible stake motivated citizens to actively participate in civic processes, trusting their local leaders to advocate for their best interests. The result was a strong, cohesive society invested in long-term growth and prosperity.
Applying this analogy to Lido DAO, we have digital stakes in the form of LDO tokens that can be freely delegated and veto signaling power for stETH holders as a dual governance mechanism. Economic incentives should be aligned not just with the amount of governance power held but also with the quality and consistency of a delegate’s contributions.
While the current threshold doesn’t prevent delegates from participating in governance discussions, it does impact their access to economic incentives. By recognizing and rewarding effort, we ensure that all active contributors feel valued and are motivated to continue their engagement. Overall, a hybrid model—one that combines a long-term, strategic approach to informed governance power with collaborative stakeholder alignment—can lead to more effective decision-making, enhanced inclusivity, and sustainable growth within the Lido DAO ecosystem with:
- Inclusivity for New Entrants: Recognizing that new delegates need time to acclimate and build relationships within the community, an effort-based system lowers barriers to entry. It encourages fresh perspectives and fosters diversity among delegates.
- Alignment with Long-Term Goals: By rewarding sustained engagement and proactive contributions, we promote a culture of long-term thinking and strategic planning, which is essential for the ecosystem’s growth.
- Balanced Governance Power: This approach acknowledges that governance influence should stem not just from the quantity of tokens delegated but also from the delegate’s dedication and value added to the DAO.
I hope this helps contribute to the discussion!