Delegation: Enhancing Governance

Lido -

 

Overview

  • Lido DAO introduces on-chain delegation and a Delegate Incentivization Program through Vote 178 and Snapshot vote. This initiative establishes a Public Delegate Platform designed to streamline governance, increase participation, and improve transparency in decision-making.
  • A six-month Pilot Delegate Incentivization Program, funded with $150,000 in LDO, will incentivize active delegates who meet performance criteria, encouraging meaningful contributions to Lido’s governance.
  • Token holders maintain full control over their votes, with the ability to override delegate decisions, ensuring their views are always represented. Delegates, in turn, play a crucial role in shaping the future of Lido DAO, with opportunities for significant impact and recognition.

 

Read on to find out how you can engage in one of Ethereum’s largest DAO’s.

 

Introduction to Delegation

Following a Snapshot vote and an on-chain vote, Lido DAO will be introducing on-chain delegation and incentive programs to enhance governance participation and to streamline decision-making across the DAO.

 

Delegation addresses three critical challenges in Lido DAO: overcoming voter apathy, increasing clarity in the governance process, and boosting the number of meaningful actors involved. As a project matures, voter fatigue can affect participation.

 

Introducing public delegates can revitalize governance by refocusing efforts and increasing voting activity. This strengthens protocol security, making it more resistant to attacks, which is essential for robust governance. Delegation also brings more experts into governance, enriching the decision-making process. These experts actively involve their communities, clarifying proposals, and making the governance process more transparent and inclusive.

 

On-chain delegation not only empowers public delegates but also simplifies user interactions. By enabling delegation to accessible wallets, barriers to voting participation are lowered, making it easier for token holders to engage.

 

This initiative streamlines governance, increases participation, and enhances security, paving the way for a stronger, more engaged Lido DAO.

 

In navigating the complexities of crypto governance, delegators now share a heightened responsibility to act in the best interests of Lido DAO and align with Lido Mission, Vision and Purpose, whilst gaining recognition for their actions.

 

Key Features of On-Chain Delegation

For token holders, the system offers several key features: they retain the right to participate directly in votes and can override votes cast by their delegates.

 

 

Token holders are allowed to assign only one delegate address at a time, encompassing all their voting power (VP), but they have the flexibility to delegate and re-delegate during an ongoing vote, with their VP adjusted accordingly.

 

Importantly, they can’t delegate to a zero address, their own, or a previous delegate's address.

 

For delegates, the system enables the use of delegated VP to participate in votes and provides the flexibility to change decisions and re-vote with a different option, utilizing the voting power of one or more token holders.

 

Simple Delegation introduces updates to the Voting and TRP_Voting_Adapter contracts, creating a straightforward solution to provide on-chain delegation with a focus on security.

 

Becoming a Delegate

First up, create a thread in the “Delegate Platform” category on the Lido DAO Research Forum, and engage with the community by sharing your decisions and rationales.

 

Being a public delegate offers several benefits, including gaining recognition, attracting token holders, and receiving reimbursement for gas expenses incurred during on-chain voting.

 

As a public delegate, you are expected to maintain a voting participation rate above 70% and communicate transparently by regularly updating your Delegate Thread with your voting decisions and rationales.

 

If you hold more than 0.1% of the total token supply in VP, the gas expenses would be compensated. Additionally, you may participate in the Delegate Incentivization Program (DIP).

 

Incentivization Program

The DAO has approved an incentivization program funded with $150,000 in LDO, calculated at the Time-Weighted Average Price (TWAP) over its duration from September 19, 2024, to March 18, 2025. Delegates with over 2 million LDO delegated on Aragon and Snapshot are eligible for equal shares of the grants, with a cap of $15,000 worth of LDO per delegate for any three-month period.

 

To receive incentives, you need to participate in 70% of the votes, remain a public delegate, share your reasoning on the delegate platform, and also meet the expectations of an incentivized delegate.

 

 

Key Dates of DIP Pilot:

 

  • Delegate Application Period: Applications for delegates will be open from August 9 to August 25.
  • Program Start: The first season of the incentivization program will commence on September 19.
  • First Quarter Incentives Distribution: Incentives for the first quarter of the pilot will be distributed from December 18 to December 31.
  • Second Quarter Incentives Distribution: Incentives for the second quarter of the pilot will be distributed from March 18 to March 31.

 

Delegate Oversight Committee

To ensure the smooth functioning of the delegation system, a Delegate Oversight Committee will be established. This committee will facilitate delegate operations, evaluate delegate performance, and distribute incentives based on evaluation.

 

Additionally, it will maintain transparent communication with contributors, delegates and token holders, and publicly report all changes and events.

 

In the event a delegate does not adhere to the criteria for being a public delegate, the following actions can be taken:

 

 

Additionally, the committee will evaluate work and engagement in governance beyond quantitative criteria. More details can be found in the proposal.

 

Conclusion

The introduction of On-Chain Delegation via Vote 178 and Snapshot Vote to Establish Public Delegate Platform and Incentivization Program marks a pivotal step in Lido DAO’s governance evolution.

 

By empowering both token holders and delegates, the aim is to create a more resilient, transparent, and inclusive decision-making process.

 

How to Get Involved

🫵 Want to become a delegate for Lido? Begin by posting your application here.

🫵 Want to be involved in selecting the delegates? Make sure to delegate your LDO here.