The main platform for igniting Ethereum, Lido, has published the proposal for its double governance mechanism, which is supposed to be the next phase of the evolution of the protocol. Lido Dao contributors published a plan proposal on May 8, describing it as a work that has been in preparation.
According to the job Announcing the proposal, double governance is a dynamic mechanism that allows ETH holders (STTH) marked on Lido to be involved in the governance of the Lido ecosystem.
The Lido Dao is responsible for the governance of the Lido ecosystem, which means that only those who hold the indigenous LDO tokens can vote on any modification of the protocol. This has implemented Eth Estormors who, although, despite their crucial for the protocol, have no say in the decisions that can also affect them.
Double governance will change this by allowing Steth's holders to actively express their dissent to any DAO governance movement on Lido from which they are not satisfied. In such situations, the new mechanism allows them to use the threat of withdrawing their Steth de Lido tokens as a negotiation currency to bring the Lido Dao to reconsider decisions.
The protocol describes the governance model proposed as a way to defuse conflicts between stakeholders in the protocol. The work on the proposal has been underway since 2022, with the developer Lido at the time, Sam KozinNoting that the double governance process is to align incentives between all participants.
The double Lido governance mechanism explains
In the meantime, the double governance proposal, Officially known as Lido Improvement Proposition (LIP) 28, explains how it will work in detail. According to the post, the model presents a timelock contract between the DAO governance movements of the lid and the execution with the timelock connected to a receiver.
When there is a motion that Steth's holders do not support, they can communicate their intention to leave the protocol by depositing their NFT of Steth, Wsteth and Steth in a specific entire contract.
If the funds deposited in the contract reach a first threshold, the duration of the timelock will begin to grow proportionally to the amount deposited. Once the locked funds reach the second threshold, the leaving mechanism of the rage is triggered, which blocks the execution of any movement under double governance until the stakers remove their steth in ETH.
For the first threshold, Lido Dao proposed to be 1% of the total Lido locked value (TVL) on Ethereum, while the second threshold is currently set at 10% of Lido on Ethereum TVL. Beyond the percentage required to trigger the model, the proposal also includes parameters such as minimum or maximum hours or the days required before any step is taken.
For example, a proposal held in double governance must be there for at least 3 days before execution, while the minimum duration of the dynamic timelock is 5 days so far, the actions of Steth locked are higher than the first threshold.
Ethereum stakeholders rent Lido's proposal as LDO sees an increase in value
Meanwhile, the proposal has attracted positive reactions from many members of the Ethereum community who believe that it represents a big step for Lido and Ethereum by attenuating the risks of governance for the protocol on Ethereum. Lido is the second largest protocol DEFI on Ethereum, with $ 21.48 billion in TVL, mainly on Ethereum.
According to Flashbots Strategy Lead HasyThis proposal is the most important upgrade of the Lido of all time. Ethereum developer Tim Beiko He also congratulated the Lido team for the proposal, even if the date of implementation remains unknown.
With Lido Set for a Medgrade, its native token, LDO, has also experienced massively positive performances in the last seven days with more than 19% of earnings. It increased by 8.66% in the last 24 hours and is negotiated at $ 1.02. However, it remains down 43.31% of the year up to date.
Thread difference cresure Help the crypto brands to unravel and dominate the headlines quickly
