Lido Finance Considers Empowering stETH Holders in Governance
- It will offer stETH holders veto power over governance proposals authorized by LDO holders.
- Dune data shows that Lido controls 31.6 percent of the whole staking market.
Lido Finance, a leading liquid staking solution, is unveiling a whole new tokenomics framework. At this year’s EthCC conference, LidoDAO’s business development contributor Marin Tvrdi said that the organization’s members are “pushing” for a dual governance model.
If enacted, it will offer Lido users veto power over governance proposals authorized by LDO holders, but only if they are staking Ethereum and own stETH. Investors may stake ETH with the network’s validators on Lido, and get incentives in exchange. They do this in return for stETH, a token representing their deposit.
Users put up one Ether and receive back one stETH. Moreover, stakeholders may keep their funds liquid while they help secure the network thanks to the widespread use of the stETH token in the DeFi industry.
Maintaining Proper Balance
Dune data shows that Lido controls 31.6 percent of the whole staking market. Following Coinbase (9.6%) is Binance (5%). With so many people using the protocol and so much money changing hands, the DAO is trying to add more safeguards to make sure everyone is on the same page.
Since LDO is the basis for Lido’s present governance structure, only LDO holders have a say in any changes. This obviously gives LDO holders influence over the protocol that stETH holders lack. Consequences may result if, for example, LDO holders take action to modify a factor that has a detrimental effect on liquid stakers.
On June 22, a pseudonymous developer working on LidoDAO under the name of skozin.eth suggested the idea of dual governance. With this idea, stETH holders would be able to vote against DAO governance decisions.
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Read more: https://thenewscrypto.com/defi-news-lido-finance-considers-empowering-steth-holders-in-governance/
Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M
