While stETH holders are essential to the platform’s success, they lack any formal way to oppose or influence DAO proposals.
The DeFi protocol’s proposal aims to grant stETH holders a more active role in protocol decisions, especially in cases where proposals passed by LDO token holders may be considered contentious.
The proposed system adds a timelock mechanism between DAO proposals and their execution.
According to the proposal, this delay creates an opportunity for stETH holders to respond if a decision could negatively impact them. They would do so by locking their stETH, wstETH, or withdrawal NFTs into a special escrow contract.
Once deposits in the escrow reach 1% of Lido’s Ethereum total value locked (TVL), a delay period begins. If deposits grow to 10% of TVL, the proposal enters a “rage quit” state. This means no action can be taken on the proposal until the locked tokens are converted back to ETH.
This model gives stETH holders a meaningful voice without forcing them to abandon the protocol entirely. It also allows the DAO to pause and reconsider divisive proposals.
