Lido (LDO) introduces dual governance...Stakers can now exercise 'veto power' on proposals

Lido DAO (LDO), an Ethereum (ETH)-based staking protocol, has introduced a 'dual governance' model to encourage staker participation in its existing governance structure. stETH holders are now able to exercise a type of 'veto power' on specific proposals.

According to CoinKu, a media outlet specializing in digital assets (cryptocurrencies), on the 29th (local time), Lido DAO passed the proposal through a community vote. A total of 53,600,000 LDO voted in favor, and the quorum was narrowly met for its adoption.

As a result, stETH holders can now not only participate in voting but also exercise practical veto power over proposals. If more than 1% of the total staked ETH votes against a proposal, it will be deferred for 5 days; if more than 10% oppose, the proposal is suspended. Meanwhile, stETH is a token users receive when they stake Ethereum through Lido, serving as a certificate reflecting their deposit and interest earnings.

Hasu, strategic advisor, commented, "With the introduction of this governance model, users will be able to reduce the risk of governance attacks or the need to trust a small number of operators," adding that it is "an important step for DeFi governance."

The report added, "Lido’s dual governance model is the first in the DeFi industry to enable stakers to exercise veto power dynamically according to their proportion, and it is attracting attention as a potential new standard for future governance."

Additionally, Vitalik Buterin, Ethereum’s co-founder, also praised the dual governance model. On the 28th, via his X (formerly Twitter), Buterin explained, "Dual governance can provide an additional safeguard against the system making wrong decisions," and "It helps ensure that Ethereum users participate as clear stakeholders, rather than simply following the crowd."