What is Lido DAO (LDO)?

Deep Dive

1. Purpose & Value Proposition

Lido DAO solves the liquidity problem in proof-of-stake networks. By staking ETH through Lido, users receive stETH (a token representing staked ETH + rewards), which can be traded or used in DeFi while earning staking yields. This avoids locking assets indefinitely, making staking accessible and flexible. The protocol currently supports Ethereum and Polygon, though Solana support was discontinued.

2. Governance & Tokenomics

LDO is the governance token, granting voting rights over key decisions like fee structures, node operator selection, and protocol upgrades. The DAO uses a dual governance system:
- LDO holders propose and approve changes.
- stETH holders can delay or block proposals via a dynamic timelock, triggered if 1–10% of stETH supply opposes a decision. This mitigates governance capture risks.

The DAO also manages revenue from staking fees (used for development, insurance, and buybacks) and employs tools like Aragon for voting and NEST for automated buyback execution.

3. Key Differentiators

Unlike centralized staking services, Lido emphasizes decentralization through its DAO structure and anti-cyclical buyback mechanisms (e.g., repurchasing LDO tokens when ETH exceeds $3,000 and revenue tops $40M annually). Its dual governance model is unique in DeFi, aligning incentives between token holders and stakers.

Conclusion

Lido DAO is a decentralized steward of liquid staking infrastructure, blending governance innovation with user-centric liquidity solutions. By enabling staked assets to remain active in DeFi, it strengthens Ethereum’s ecosystem while balancing stakeholder influence. How might its dual governance model reshape decentralized decision-making in broader crypto protocols?