Hello Lido Community!
Post-DevCon, I’m excited to share some exciting learnings on governance and decentralized collaboration from the incredible DAO-focused events I attended:
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SEED Governance Day: Kudos to @SEEDOrg for an amazing conference!
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DAO Asia Summit: I spoke on “ASEAN’s Coordination Model: Learnings for Decentralized Governance and DAO Adoption in SEA”. This presentation explored how ASEAN’s approach to balancing sovereignty and regional collaboration can offer valuable insights for DAOs. By fostering decentralized cooperation across diverse stakeholders—including governments, private enterprises, and Web3 innovators—it highlights how DAOs can create coordinated, interoperable policies while preserving autonomy.
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Lido Connect Conference: This was a stellar conference where I got to connect with many Lido contributors! Team SEEK (comprising of our names @Stakesaurus, Eugene, Elizatbeth, Katashe) secured first place at the Lido Connect Quiz Competition
- DevCon Governance Hub: Attended the hub for governance enthusiasts onsite at Devcon, which was an incredibly inspiring experience (details here).
I was looking forward to vote on the current active proposal as a collective, but unfortunately, our delegation was finalized after the snapshot date, so we couldn’t participate in this round. However, we’re committed to governance and will share our voting rationale here in this thread. I hope this approach resonates with the community and welcome your feedback:
Proposal: Establishing the Network Expansion Committee
Vote: For
Voting Rationale: We support the proposal to establish the Network Expansion Committee (NEC) for Lido DAO as it provides a formalized structure for managing the expansion of (w)stETH to new networks while addressing key risks associated with cross-chain operations. The NEC introduces a transparent and accountable framework for recognizing (w)stETH bridging endpoints and denominations, replacing the informal Network Expansion Workgroup with a more secure and flexible governance mechanism.
The proposal addresses the following critical considerations:
1. Streamlining Governance:
The NEC’s streamlined decision-making structure improves adaptability when expanding to new networks while maintaining accountability to the DAO, so that network expansions are both strategic and transparent.
2. Operational Efficiency and Risk Mitigation:
A well-defined NEC reduces reliance on multi-sigs and unstructured workgroups, mitigating risks of miscommunication and delays. Its formal framework ensures that network expansions align with Lido DAO’s security and decentralization principles, with unanimous approval required for NEC decisions (4/4 vote) and an override mechanism via DAO vote.
3. Cross-Chain Governance Project Comparisons:
The NEC focuses specifically on (w)stETH’s bridging and network expansion needs, while the Wormhole Multigov system offers cross-chain governance execution capabilities. We recommend exploring how NEC processes could integrate with systems like Wormhole Multigov for enhanced cross-chain governance execution with formalizing bridging endpoints, allowing flexibility in adopting multigov solutions where appropriate.
By supporting this proposal, we help enable a secure, transparent, and adaptable approach to Lido’s network expansion strategy, safeguarding the protocol’s long-term success and decentralization.
Proposal: Reevaluation of Lido on Polygon state
Vote: Sunset Lido on Polygon
Voting Rationale: As described in GOOSE and reGOOSE, we agree that having a laser focus on Ethereum is the most sustainable path forward and one with the highest operational leverage for the Lido protocol.
One other point to consider for future pilots for new network expansions is that newer protocols will have an edge over Lido because they will be able to incentivise TVL using token issuance. This is in contrast to LDO, where the majority is already in the hands of the community.
This again highlights that the best play is to focus on the Ethereum ecosystem.
If we do want to explore beyond the Ethereum ecosystem however, we suggest future pilots to adopt smaller-scale, milestone-based approaches to test feasibility and ROI before committing significant resources. This would mitigate risks, provide better cost control, and allow the DAO to pivot more effectively based on measurable results.
Proposal: Should Nansen continue in SDVT following the acquisition of Stakewithus?
Vote: For
Voting Rationale: Congratulations to @Nansen on the acquisition of StakeWithUs, a non-custodial staking provider backed by SGInnovate. Noting the evaluation by the LNOSG, we are confident of Nansen’s ability to continue their high performance in the Simple DVT programme. Further, the operational segregation between StakeWithUs and Nansen’s other activities ensures that the performance and security requirements critical to the Lido DAO’s SDVT can be met.
Proposal: Should Alchemy continue in SDVT and LoP following the acquisition of Bware Labs?
Vote: For
Voting Rationale: We support continuing Alchemy’s participation in SDVT and LoP programs following its acquisition of Bware Labs. The LNOSG review confirms that the transition does not introduce operational risks or changes that would compromise performance, decentralization, or security.
Proposal: Should Pier Two continue in the Curated Module Set following the acquisition of Numic?
Vote: For
Voting Rationale: The proposal to allow Pier Two to continue as a Node Operator in the Curated Module Set after acquiring Numic is supported by several key factors. The acquisition strategically combines Numic’s operational expertise with Pier Two’s resources and commitment to achieving advanced security certifications such as ISO 27001:2022 and SOC-2. This integration enhances infrastructure quality and compliance within the Ethereum ecosystem, strengthening both entities’ contributions to Lido.
Additionally, the Lido Node Operator Sub-Governance Group (LNOSG) has reviewed the acquisition and proposed a structured onboarding process, which includes a testnet trial run followed by a gradual mainnet ramp-up to identify and address any operational issues early.
Proposal: Hasu’s GOOSE-2 Submission A Product Line Approach to Grow Lido’s Staking Ecosystem
Vote: Adopt Goals
Voting Rationale:
We support the adoption of the goals outlined in @Hasu’s GOOSE-2 submission.
From Product to Product Line:
This is indeed a thoughtful strategy that adapts to the reality of the market demand observed over the past year and we are glad that the importance of a separate product line catering to institutional stakers is being recognised.
I personally witnessed the challenges of institutional adoption firsthand in my practice. Solutions like stETH and Lido Institutional offer clear benefits—deep liquidity, diversification, and superior rewards—but adoption often stalls due to regulatory barriers, such as the need for a known counterparty responsible for custody and governance. Another concern is the classification of staking rewards, which are distinct from speculative products yet often misunderstood. Proactively educating policymakers to view staking as a technical service, not a financial product, is important. However, this process requires sustained advocacy over multi-year cycles, with periods of slow groundwork followed by bursts of rapid action when consultations arise.
To drive institutional adoption, we must recognize that the market cannot adopt a one-size-fits-all stETH given its diversified needs. Expanding into the other identified beachhead markets leverages stETH’s strengths as high-quality collateral while addressing unique priorities like compliance, risk-adjusted returns, and capital efficiency.
A Market for Validators
This approach fits well with the overall direction that Ethereum researchers are taking–e.g., Rainbow Staking, Orbit SSF–that aims to bifurcate the duties more suited for professional node operators vs solo stakers, and incentivising them accordingly.
As such, we will likely be one step ahead of the competition by investing resources into building this out now.
LDO: More than Governance
While we are supportive, we’d like to voice out a few points for consideration.
Tying LDO more directly to protocol revenue will improve alignment of LDO holders with the protocol by increasing their skin in the game. However, implementing a straightforward “fee switch” would also expose the LDO token to valuation scrutiny through traditional financial metrics.For example, the market capitalisation of LDO to revenue will currently be 133x if we assume 1% of stETH fees go to LDO holders due to a “fee switch”, which could be perceived as overvalued
As such, it would be interesting to explore new use cases for LDO within the new stETH product lines. E.g., Stake LDO to vote for vaults that one thinks will generate more revenue for the DAO and receive a larger share of DAO revenues from that vault.
This achieves 2 outcomes:
- Reduce sell pressure: LDO is not sold if it is staked
- Efficient capital allocation: TVL can be automatically balanced across vaults
Credits: Thank you @Jenya_K for helping facilitate this delegate thread process, @Stakesaurus for feedback and review, and x23.ai for powering my research feed.