5 August 2022: Special Edition: Lido Spotlight
5 August 2022: Special Edition: Lido Spotlight
Aragon smart contracts secure the Lido protocol and Lido DAO.
For this special edition of The Eagle, we’ll be talking about how Lido uses Aragon OS to secure their liquid staking service and DAO.
Lido is the de facto liquid staking service of Ethereum, securing over $7.2 billion of assets. The project is built atop the Aragon OS, with some bespoke features they added on later.
Lido is a great example of what DeFi protocols and DAOs can do with Aragon as its base layer.
Lido: a complete implementation of the Aragon OS
Lido uses the Aragon OS for their liquid staking service. They use the permission management capabilities of the Aragon ACL (Access Control List), running all the staked ETH (stETH) through Aragon contracts.
According to Victor Suzdalev, core governance at Lido, the ACL saved their team over six months of development time:
Lido also uses Aragon to run the Lido DAO, governed by the LDO token. Here are the aspects of Aragon OS they implement in their DAO:
Voting app: for the community to govern and change paremeters of the protocol.
Finance app: for one-time payments to contributors.
Tokens app: for token vesting schedules.
Agent app: to interact with external contracts.
Building on the Aragon OS base
Lido built their own custom functionalities to fit their needs: EasyTrack, a notification system, and a vote timelock.
EasyTrack is an optimistic government implementation that executes daily operational proposals unless contested, keeping the number of proposals that token holders need to vote on much lower. This on-chain, optimistic voting method helps Lido move fast and prevent voter fatigue for noncontentious proposals.
Listen to Victor Suzdalev speak about EasyTrack in this video:
They implemented a voting notification system, helping voter partipation stay high, at an average of 5.7% of the network. They’re one of the most active DAOs in the ecosystem when it comes to voter participation rate!
They also added an objection-only period at the end of votes to prevent malicious proposals from passing at the last moment. This timelock gives the team 12-24 hours to respond to a malicious proposal, because voters can only cast or change their vote to “no” in the final 12-24 hours of a vote.
A key player in the Ethereum Ecosystem
In less than two years, Lido has become a key player in the Ethereum ecosystem and an important piece of the puzzle as Ethereum transitions to Proof of Stake in the next few weeks.
Recently, Aragon's Core Team sat down with Lido at ETHBarcelona to talk about the future Aragon core. We’re very excited to keep working with the team and growing the ecosystem!
Learn more about Lido:
You can find stats on Lido and stETH on Dune Analytics.
Find them on Twitter, Github, and their website.
Or check out our blog on Lido’s implementation of the Aragon OS:
Have a great weekend!
—the Comms team