Lido Proposes Governance Model to Include stETH Holders in Decisions

Lido Finance has proposed Lido Improvement Proposal (LIP) 28, allowing staked ether (stETH) holders to participate in governance alongside LDO tokenholders. Key points include:

• StETH holders gain a veto power on certain proposals approved by LDO tokenholders.
• The dual governance system aims to enhance accountability and decentralization as Lido dominates Ethereum's staking landscape, with over 25% of all ETH staked through its platform.
• A dynamic timelock contract will enable stETH holders to intervene against unpopular proposals, increasing the timelock duration based on user objections.
• If discontent exceeds set thresholds (1% for “first seal,” 10% for “second seal”), execution of proposals is blocked until protesting users can withdraw their ETH.

This proposal emerges amid Ethereum’s recent 30% price surge following the Pectra upgrade aimed at improving scalability. The formal vote on LIP-28 is anticipated soon and may influence governance structures across the DeFi ecosystem. In response, LDO prices have increased by 6.5% in the last 24 hours.