Lido DAO Introduces Dual Governance: Empowering stETH Holders with Veto Power

On June 30 at 10:00 AM ET, Lido DAO finalized a landmark vote to implement a dual governance structure, granting stETH holders veto power over decisions made by LDO token holders. The vote, which ran from June 23 to June 30, secured 53.6 million LDO tokens in favor, narrowly surpassing the required 50 million token quorum with only 1.18 LDO tokens opposed.

The new framework introduces a dynamic timelock module, allowing stETH holders to delay or block governance proposals. By locking 1% of staked ETH in an escrow contract, holders can delay a proposal by five days, while a 10% threshold triggers a “Rage-Quit” state, freezing the proposal entirely.

“There used to be this dilemma between trustlessness and liquidity, and dual governance is effectively breaking that dilemma,” Hasu, a prominent Lido contributor, emphasized its significance, stating, “You no longer have to choose — you can have both.”

Lido DAO: A Leader in Liquid Staking

Lido DAO, launched in December 2020, is the leading liquid staking protocol for Ethereum and other Proof-of-Stake (PoS) blockchains, revolutionizing staking by eliminating lockup periods and technical barriers.

Its flagship product allows users to stake ETH without the 32 ETH minimum required for solo staking, receiving stETH (staked ETH) tokens in return, which maintain a 1:1 ratio with staked ETH and accrue daily rewards. These liquid tokens can be traded, used as collateral in DeFi protocols like Aave, or leveraged for additional yields in liquidity pools such as Curve and Balancer.

Lido has expanded beyond Ethereum to support multiple blockchain networks:

As of June 2025, Lido’s Total Value Locked (TVL) stands at approximately $22.6 billion, including over 9.1 million ETH (roughly 30% of all staked ETH), supported by more than 500 node operators via its Community Staking Module.

The protocol’s 2.8% daily APR and 97.44% network performance underscore its reliability and appeal.

Lido vs. Competitors: Comparative Analysis

Strengthening Security and Trust

The dual governance system is designed to bolster security against governance attacks and flash loan manipulation. Extensive stress tests have demonstrated its resilience, ensuring that malicious actors cannot easily exploit the protocol.

Ethereum co-founder Vitalik Buterin endorsed the initiative, describing it as “an extra layer of protection against harmful governance actions”. The system’s ability to allow stETH holders — particularly institutional investors — to influence decisions is expected to enhance trust in Lido’s liquid staking protocol, potentially attracting new participants to the ecosyste

Additionally, Lido is set to participate in EthCC from June 30 to July 3, 2025, in Cannes, where the team will explore staking, decentralization, and institutional adoption through talks, panels, and side events, hinting at exciting updates and discussions worth anticipating.