Lido DAO Launches Dual Governance Model for Ethereum Stakers
Lido DAO Launches Dual Governance: A New Era for ethereum Staking
On June 30, 2025, the Lido DAO community implemented a groundbreaking Dual Governance system on the ethereum mainnet. This development signifies a major transformation in governance practices and enhances the protection of users who stake their ETH through the Lido protocol, a leading staking service within the ethereum ecosystem.
Lido DAO: A Cornerstone of DeFi on ethereum
With around $23 billion in ETH staked—accounting for approximately 26% of all Ether in staking—Lido DAO has established itself as a key player in the ethereum landscape. Previously, governance was solely in the hands of LDO token holders, which, while effective, left a significant gap: users holding stETH (the liquid token received for staked ETH) lacked direct mechanisms to voice concerns or respond to potentially detrimental governance decisions.
Understanding Dual Governance: Structure and Functionality
The newly introduced Dual Governance model brings an innovative framework to decentralized finance (DeFi). While LDO holders retain the power to propose changes, stakers—those holding stETH and wstETH—are now equipped with essential tools to safeguard their interests.
A key feature of this model allows stakers to postpone the implementation of governance proposals. If at least 1% of stETH holders express opposition, the proposal’s execution is paused for a minimum of five days, extendable up to 45 days based on the level of dissent. This pause encourages community discussions and thorough evaluations.
Should dissent reach 10% of stETH holders, the rage-quit mechanism activates, halting the proposal’s execution until all dissenting stakers can withdraw their ETH from the protocol. This safeguard ensures that significant changes cannot be enforced against the wishes of a substantial portion of the staker community, thereby enhancing resilience against malicious governance actions.
A Revolutionary Security Framework
Sam Kozin, a core contributor at Lido Labs Foundation, stated, “Dual Governance marks a significant milestone for DAO security and power distribution. It grants stakers meaningful exit rights, allowing for thoughtful community responses rather than hasty reactions. This design embodies ethereum‘s core principles: decentralization, user autonomy, and credible neutrality.”
The security of this model has been validated through comprehensive audits by reputable organizations such as Certora, OpenZeppelin, Statemind, and Runtime Verification. Additionally, the system’s parameters have undergone agent-based simulations and game theory analyses, confirming the robustness of the adopted framework.
Enhancing Decentralization and Institutional Integrity
The implementation of Dual Governance is a pivotal advancement for both decentralization and the predictability of governance within Lido. Stakers, who are integral to the protocol’s success, now possess a direct and on-chain avenue to express their opinions and, when necessary, protect their assets from potentially harmful decisions.
This equilibrium between the decision-making authority of LDO holders and the opposition rights of stakers enhances the protocol’s robustness and reduces vulnerability to manipulation or governance attacks. In an environment where trust and security are paramount, Lido DAO’s initiative serves as a model for best practices across the decentralized finance sector.
Setting a New Benchmark for On-Chain Governance
The adoption of the Dual Governance model by Lido DAO signifies a transformative moment not only for the protocol but also for the broader ethereum community. This initiative illustrates the potential to merge innovation, security, and democratic engagement within a rapidly evolving ecosystem.
With this reform, Lido DAO solidifies its leadership in ethereum staking, providing users with enhanced protections and guarantees. On-chain governance is now more than just a voting process; it encompasses concrete rights and safeguards for community interests.
In a domain where the stakes are incredibly high—encompassing billions of dollars and the trust of millions—Lido DAO’s commitment to transparency, security, and decentralization may well set a new standard for all DAOs and DeFi protocols moving forward.
