Lido community strongly against limiting its Ethereum staking dominance

Quick Take

  • The Lido community is currently voting on whether it should limit its share of the liquid staking market on Ethereum.
  • Almost 99% of all votes cast so far are in favor of keeping the Lido dominance status quo.

Lido DAO members have signaled their intent to maintain the platform’s dominance of the Ethereum 2.0 (ETH2) staking market as the majority of the community are voting against imposing a self-limit on the liquid staking platform.

Lido Finance, a liquid staking platform, accounts for almost a third of all ether (ETH) tokens staked on the Ethereum Beacon chain. This has caused fears about its level of centralization, concerns that led to a month-long debate in the Lido community forum.

The vote, which began on June 24, still has about a day to go but the outcome seems set. Data from the voting page shows over 99.8% of voters have chosen that Lido should not self-limit. If the vote fails, Lido will pursue other avenues of minimizing the risks posed by its staking dominance.

The platform is currently considering a proposal to introduce a dual governance structure for Lido. This dual governance architecture will involve including staked ETH (stETH) holders in the decision-making process for the DAO.

Staked ETH is the liquid staking derivative token given by Lido in exchange for ether staked by users on the platform. stETH is a tradable token and as such can be deployed on other DeFi protocols like Aave and MakerDAO.

Lido’s current governance is controlled by Lido DAO (LDO) token holders. Only LDO owners propose and vote on governance actions. The dual governance proposal, if passed, will grant veto powers to stETH holders over voting decisions made by LDO owners.

The proposal also includes a time-lock component that will freeze the implementation of a vote to allow for review and possible veto action by stETH holders.


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About Author

Osato is a reporter at The Block who likes to cover DeFi, NFTS, and tech-related stories. He has previously worked as a reporter for Cointelegraph. Based in Lagos, Nigeria, he enjoys crosswords, poker, and attempting to beat his Scrabble high score.