Lido (@LidoFinance): Dual Governance: Parameters

Dual Governance: Parameters From May 19th–23rd, a Snapshot vote to approve deployment parameters for Dual Governance is scheduled. Detailed research and simulation results supporting these parameters are available on the Research Forum. Here's a summary of the key findings. Work in progress Dual Governance is a proposed mechanism within the Lido protocol that gives stETH holders oversight over LDO governance decisions through dynamic timelocks (e.g., Veto Signaling) and an immutable withdrawal contract (RageQuit Escrow). Dual Governance was introduced in this Research forum post and has evolved through multiple iterations, including the design and implementation proposal approved in the first Snapshot vote. The system is detailed in the design mechanism document on GitHub, and its parameters are being proposed for the upcoming second Snapshot vote. Understanding parameter design In Dual Governance, parameters and their values define how the system operates. They determine timelock lengths, thresholds for reaching Veto Signaling and Rage Quit, and the timing of governance states. These settings affect how long execution can be postponed, how much notice stETH holders receive, and what it takes to block governance actions. A full list of parameters can be found here. Calibrating parameters is a constant tradeoff between protection measures for stETH holders—such as longer timelocks—and the risk of introducing new attack vectors, driven by increased system complexity in general and poorly tuned thresholds in particular. The parameters do not exist in isolation; they form an interconnected system. Testing them required a systematic approach, which was performed by two independent teams: game-theoretic research by 20[ ] @fabgenovese @dpl0a and agent-based model research by @CollectifDAO Research outcome and parameter limits Proposed thresholds validated: Both the 1% Veto Signaling threshold (for raising opposition and pausing proposal execution) and 10% Rage Quit threshold (for exiting the protocol) proved effective for stETH holder participation while protecting against governance abuse and ensuring operational efficiency. No critical vulnerabilities identified: Both research teams found the parameters effective at blocking malicious proposals, testing them through scenarios that simulated various attack vectors including Veto Signaling abuse, bribery attempts, and governance paralysis attacks. Reliable parameter ranges established: Extra complexity risks: The additional governance layers may cause state oscillations—frequent switching between Veto Signaling and regular states—potentially leading to execution delays, participant fatigue, and procedural uncertainty. Congestion during high-demand periods: During intense governance activity or market stress, gas price spikes and locking delays may impair stakeholder responses, especially for urgent veto or RageQuit actions. Responsiveness depends on active participants: Although the first threshold to pause execution is intentionally low (at 1% of total stETH supply), system resilience depends on stETH holders being engaged and taking action within 5 days. Without active participation, the system becomes vulnerable to attacks. Next step: Monitoring framework required: Parameter effectiveness relies on live ecosystem conditions, potentially including token distribution, holder behavior, and market dynamics. These factors need continuous tracking to keep parameters aligned with emerging threats. In summary, there are two key findings: First, the proposed parameter values demonstrated effective performance in Dual Governance, given that the initial assumptions on impacting factors were correct. Second, operational ranges were established for each parameter within which the system could maintain its intended functionality. The verified parameter settings for Dual Governance will be put to a Snapshot vote on May 19th, 2025. More details: 20[] report CollectifDAO report Research forum post Dual Governance mechanism design