Lido DAO has officially approved a dual governance model, introducing a new layer of checks and balances by granting stETH holders veto power over critical decisions. This model aims to enhance security, decentralization, and user alignment within the protocol.
Previously, governance was primarily driven by LDO token holders. The new system allows stETH holders to block or delay proposals affecting staked ETH or fundamental protocol parameters, ensuring broader community participation in key decisions.
The move is expected to improve protocol resilience against governance attacks, distribute power more equitably, and strengthen user confidence in Lido's liquid staking services. However, it may also introduce complexity and slower decision-making processes.