Lido DAO Approves Dual Governance, Granting for stETH Holders More Power

The confirmation was announced on June 30 via a post on Lido’s official X page, following a successful community vote.

The upgrade is scheduled to go live on-chain on July 4. Under this new governance structure, stETH holders will have the power to block or delay proposals passed by LDO token holders if they disagree with them. This is enabled through a dynamic timelock mechanism that proportionally delays decisions based on the volume of stETH locked in opposition.

Dual Governance: Approved 🎉

LDO holders have approved Dual Governance: a dynamic timelock system giving stETH holders a say in the governance of Lido DAO.

Here’s what happens next.

↓ pic.twitter.com/EE2O4vExdF

— Lido (@LidoFinance) June 30, 2025

If at least 1% of the entire stETH supply is locked against a proposal, it will automatically trigger an additional delay of between 5 and 45 days. Furthermore, if opposition reaches 10%, a “rage quit” mechanism will halt all governance activities until the opposing stakers exit the protocol entirely.

Lido states that Dual Governance is designed to prevent governance capture and ensure that Ethereum stakers have meaningful participation in decisions that impact the protocol. The feature addresses longstanding concerns about the power imbalance between ETH stakers using Lido and LDO token holders.

The system introduces multiple safety layers, including a Reseal Committee to manage delays, a Tiebreaker Committee to resolve deadlocks, and an Emergency Committee to intervene during critical failures. According to Lido, these structures will prevent rushed or harmful proposals from bypassing community scrutiny and provide a clear exit route for dissatisfied stakers.

Dual Governance is widely viewed as one of the most sophisticated DAO models in decentralized finance, aiming to align incentives between stakers and token holders while strengthening Ethereum staking’s overall security and inclusivity.

Meanwhile, in response to a targeted cyberattack that occurred in May, the Lido DAO launched an emergency vote to rotate one of its oracles—an essential bridge between real-world data and the blockchain.