👨‍🔬 Governance Lab #098

Lab Report #098 - Lido's Dual Governance Mechanism, Obol's Delegate Reputation System, Drift's Strategic Buyback Program, Announcing Forse for Polygon Ecosystem Grants and more

May 15, 2025

gm frens 👋

welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and DAO Governance. As always, we've filtered through the noise to bring you the governance signals (and drama) that matter.

At a Glance 👀
💧 Lido introduces Dual Governance with dynamic timelock mechanism for contentious proposals
🟩 Obol discusses Delegate Reputation Score system with compensation for active governance
🔄 Drift Foundation unveils Strategic Buyback & Incentive Proposal to fuel ecosystem growth

Let’s dive in 🏊

Mechanism

Lido DAO introduces Dual Governance mechanism

Lido DAO has introduced LIP-28, the full plan for its Dual Governance mechanism with dynamic timelock that allows stETH holders to exit when facing contentious proposals. The system features an escrow where stakers can signal disagreement with governance decisions.
Two key thresholds govern the system: a "first seal" (1% of TVL) that extends the timelock proportionally when crossed, and a "second seal" (10% of TVL) that triggers a "rage quit" mechanism blocking execution until dissenters can exit. The design allows for de-escalation through escrow withdrawals or proposal cancellation.
Three specialized committees will handle edge cases: an Emergency Committee (4/7 quorum to activate emergency mode), a Tiebreaker Committee (structured as a "multisig of multisigs"), and a Reseal Committee (5/6 quorum) for protocol deadlocks. Community members have praised this as "one of the most well thought-out governance designs in Ethereum's history."

Reputation

Obol Collective discusses introduction of a Delegate Reputation Score with compensation structure

The Tally team has proposed a governance upgrade to Obol that features a Delegate Reputation Score (DRS) system and compensation mechanism. The plan allocates 165,000 OBOL tokens (10% of staking rewards) to reward active delegates and introduces a scoring system weighing participation (55%), forum activity (20%), and voting metrics (25%).
The DRS classifies delegates as "Active" (>65% score), "Inactive" (<65%), or "Ghost" (no votes), with token holders only eligible for staking rewards when delegated to active delegates. Implementation costs are estimated at $65,000 for development, audits, and UI integration with Tally.
If approved, development would begin May 29 with launch targeted for July 16, 2025. The proposal reinforces Obol's commitment to incentivizing active governance participation rather than passive token holding.

Buyback

Drift Foundation unveils Strategic Buyback & Incentive Proposal

Drift Foundation has introduced DIP-4, a Strategic Buyback & Incentive Proposal allocating $1M USDC to programmatically purchase DRIFT tokens based on relative price performance versus other Solana tokens and internal KPIs. The proposal frames buybacks as strategic capital allocation to acquire DRIFT at favorable prices for ecosystem growth reinvestment. Drift protocol would use the fund for growth through incentive matching with partners and direct incentives to projects building on Drift liquidity.
A program designed by Drift Labs would handle execution, sending bought-back tokens to the security council. If the full $1M isn't deployed within 3 months, criteria can be adjusted or funds returned to the DAO. The proposal positions this as both a growth mechanism and alignment tool connecting ecosystem economic output to the DRIFT token.

Proposal Tracker™️

💬 DISCUSSION | Paladin DAO - Restructuring Paladin The Rebranding

Summary: This proposal introduces a complete rebranding of Paladin DAO as part of its broader restructuring initiative, aiming to unify multiple products under a cohesive brand identity. With Rings and Paladin products now managed under the same DAO, the team proposes rebranding to "Trevee, liquidity's conduit". The proposal includes logo options, color palette, and font selections. Implementation would involve updating the UI, building a new landing page, and renaming social media accounts.

💬 DISCUSSION | Arbitrum DAO - Invest in Builders & Ignite ARB Demand with q/acc

Summary: This proposal introduces Quadratic Accelerator (q/acc) as an evolution of traditional web3 grant programs. Unlike conventional grants where tokens are often liquidated, q/acc creates self-sustaining token economies through competitive applications, Automated Bonding Curves, quadratic funding, token lock-ups, and fair-launch mechanisms. The q/acc process allocates 90% to teams and 10% between Arbitrum DAO and q/acc, locks ARB in bonding curves, and establishes liquid token listings. The proposal requests $1.05M in ARB to deploy on Arbitrum One and launch 10 projects.

💬 DISCUSSION | Fluid DAO - Current issues with ETH-USDC pool

Summary: This proposal addresses Fluid's ETH-USDC pool performance issues during extreme market volatility. Despite leading in trading volume and fees, the pool's v1 design triggers rebalancing during sharp price movements, causing LP losses that exceed fee income. Solutions include: DEX v2 (launching June-July) for sophisticated LPs; a "quick fix" with 500,000 vested FLUID tokens for affected users, $400k monthly FLUID rewards until v2, and pool range updates. The team prefers reducing the current 30% range to 15%, doubling fees despite increasing rebalancing losses by 20-30%. The treasury holds ~30% of FLUID supply with 0.2% monthly emissions, and the protocol is increasingly profitable.

From the Lab

A Stablecoin Conversation with Luca Prosperi

In our latest blog post, we continue the Interview Series—a collection of sessions with industry leaders sharing one big idea with our team. For Session 002, we share insights from our discussion with Luca Prosperi, co-founder of M0, who explores how stablecoins should function as the monetary layer for a new financial system rather than just payment tools.

▶︎ READ the post

Announcing Forse for Polygon Ecosystem Grants Program

We're excited to announce that Forse is now powering ecosystem analytics for the Polygon Community Grants Program.

We're building comprehensive analytics infrastructure to measure impact, track growth, and enhance transparency across the entire Polygon grants ecosystem.

Look out for ongoing development updates on the Forse Polygon Terminal over the coming weeks on our channels.

▶︎ READ the full announcement