Introducing LDO

in Lido by Kasper Rasmussen

The LDO token governs all Lido DAO governance and network decisions to ensure its prolonged stability and decentralized decision-making to facilitate the growth of fair, trustless and transparent liquid staking.

  • LDO - the Lido DAO Governance token - is now live.
  • The LDO contract address is here: etherscan.io/token/0x5a98fcbea516cf06857215779fd812ca3bef1b32
  • For now, founding members of the Lido DAO have LDO tokens. These are locked for 1 year, after which they will be vested over 1 year.
  • 36% of LDO are unlocked in the DAO treasury. Anyone can make a proposal on how they can be used. If you have any initiatives you think will benefit the Lido protocol, share your thoughts in our governance platform: research.lido.fi.

 

The Lido DAO is pleased to announce the distribution of the LDO token - the Lido DAO governance token.

LDO has been distributed to early stakers across Lido. To check your balance, visit airdrop.lido.fi.

Lido Ecosystem & DAO overview

Lido is a DAO community which builds a liquid staking service for Ethereum. Inspired by the growth of the Ethereum ecosystem, Lido lets users stake their ETH tokens in a secure, non-custodial and transparent manner to contribute to the stability of the Ethereum ecosystem as a whole.

Lido’s Ethereum staking protocol has been built as a DAO to preserve Lido’s upgradability and stability whilst maintaining decentralised infrastructure. The Lido DAO governs a set of liquid staking protocols, deciding on Lido’s key parameters whilst spearheading Lido network upgrades. Members of the Lido DAO have the responsibility to govern Lido to maintain its ongoing efficiency and contribute to the overall growth of the Lido community.

There exist a number of reasons for why a DAO is the most optimal structure for Lido. Lido as a service is highly dependent on the development of the Ethereum beacon chain and its staking protocol. With a number of uncertainties surrounding the roll-out of Eth2.0, Lido is required to be upgradable. When faced with these uncertainties, the DAO-based governance approach will allow for Lido to remain flexible and adjust its staking service as necessary.

In addition to this, Lido’s design as a DAO will allow for the accumulation of service fees which can be managed and distributed transparently to cover development and insurance costs in a manner aligned with community interests.

With the mission to make staking simple, liquid, secure and decentralized for the end user, the Lido DAO has the following responsibilities:

  • Launching Lido:
  • Deploy protocol smart contracts;
  • Set fees and other protocol parameters;
  • Select the threshold signature scheme participants among reputable individuals or organizations willing to provide the service;
  • Facilitate the multi-party computation ceremony to create the threshold signature account for staking rewards;
  • Assign initial DAO-vetted node operators.
  • Propose and update Lido’s parameters;
  • Approve incentives for parties that contribute towards DAO’s goals (e.g., stETH liquidity providers);
  • Propose and update Lido’s implementation for incoming Ethereum 2.0 features using DAO treasury funds;
  • Assign oracles to deliver reward/slashing rate feed to help establish stETH token balances;
  • Scout and qualify new node operators and penalize the existing ones slashed by Ethereum 2.0’s rules;
  • Manage the Lido DAO’s insurance and development funds;
  • Manage unbonding and withdrawals once available in Ethereum 2.0;

It is our belief that a DAO is the optimal approach to launching Lido, balancing the benefits of full centralisation and decentralization to provide the most secure, adaptable experience for users of Lido.

The Lido DAO is actively voting on a number of parameters, including the addition of node operators and the number of validators for each node operator. The votes can be tracked in real-time on mainnet.lido.fi.

The LDO token

Our mission with the Lido DAO is to distribute all decision-making to create a trustless staking service built around community-growth and self-sustainability. This is achieved through the LDO governance token. The launch of LDO is a significant step towards achieving this goal, driving decentralised ownership and facilitating development of a distributed, independent governance structure to lead the Lido DAO.

To have a vote in the Lido DAO, and to contribute to the determination of any of the topics outlined above, one must hold the LDO governance token. Holding LDO gives DAO members a vote in the future of Lido, allowing each DAO member to have a personal say in the community.

LDO voting weight is proportional to the amount of LDO a voter stakes in the voting contract. The more LDO in a user’s voting contract, the greater the decision-making power the voter gets. The exact mechanism of LDO voting can be upgraded just like the other DAO applications.

The LDO token will be used across all current and future DAO votes, giving every token holder a say in the direction and growth of the Lido DAO.

LIDO Token Allocation

Upon the launch of the Lido DAO, 1 billion LDO tokens were minted.

At time of writing, founding members of the Lido DAO possess 64% of LDO tokens. These are locked for 1 year, after which they will be vested over 1 year. At the time of writing, the only unlocked LDO in existence are 0.4% airdrop distributed to early stakers and DAO treasury tokens. Anyone can make a proposal on how they can be used via research.lido.fi.

The allocation of these tokens is as follows:

  • DAO treasury - 36.32%
  • Investors - 22.18%
  • Validators and signature holders - 6.5%
  • Initial Lido developers - 20%
  • Founders and future employees - 15%

What’s Next

If you haven’t already, stake your Ethereum using Lido on stake.lido.fi.