Lido DAO Votes on Tiered Rewards Proposal
The Lido Decentralized Autonomous Organization (DAO) is currently voting on a proposal that could revolutionize the rewards structure for ETH stakers. The aim of this tiered rewards system is to incentivize partnerships with other Web3 communities and attract more capital into the Ethereum liquid staking protocol.
Lido Looks to Grow ETH Staking Market Share
With nearly 32% of all staked ETH, Lido has already made significant strides in the market. In fact, this percentage surpasses the combined staked ETH on popular platforms like Coinbase, Binance, and Kraken. As a result, Lido staked ETH (stETH) has become the 8th largest digital asset by market capitalization.
However, Lido is not satisfied with its current market share. The Lido DAO is now seeking to expand its presence even further by making its proposition more attractive to potential partners.
Under the proposed system, interested participants would need to commit 2,500 ETH to Lido over a period of 12-24 months. This strategy aims to entice more wallets, institutions, crypto services, neobanks, and custody services to embrace the staking protocol.
More Rewards For Lido Stakers
Currently, stakers who choose Lido as their staking platform receive 90% of the staking rewards generated. The remaining 10% is split equally between node operators and the Lido DAO Treasury.
Now, under the proposed tiered rewards system, the Lido DAO plans to allocate a portion of its 5% share to the most dedicated stakers. The rewards will be distributed based on different percentages depending on the size of the staker’s commitment. Stakers with up to 50,000 ETH will receive 30% of the additional rewards, while the largest stakers committing 700,000 ETH or more will receive half of the DAO’s rewards share.
New Responsibilities for the Lido DAO
In addition to increasing earning potential for stakers, the proposal also introduces new responsibilities for the Lido DAO. The DAO will now be tasked with encouraging sustainable growth within the ecosystem.
One notable measure proposed is a rewards deduction mechanism designed to discourage cycle staking. Cycle staking involves unstaking and restaking assets periodically to maximize rewards. This practice can hinder the stability and growth of the staking ecosystem.
To oversee the implementation of this new rewards structure, the Lido DAO plans to establish a dedicated “Rewards Share Committee.” This committee will be responsible for onboarding new participants and overseeing payouts. They will have control over a multi-signature wallet, granting them the authority to whitelist, filter, and distribute rewards.
As of now, the vote has been live for a week, and over 27 million Lido governance tokens (LDO) have been deployed. The support for these changes from DAO members has been overwhelming, further indicating the desire for a more incentivized staking ecosystem.
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Editor Notes: The Future of Staking with Lido DAO
The proposed tiered rewards system by Lido DAO has the potential to revolutionize the staking landscape for ETH and other Proof-of-Stake tokens. By incentivizing partnerships and attracting more capital, Lido aims to solidify its position as a major player in the market.
If implemented successfully, this new rewards structure could open up new opportunities for individuals, institutions, and crypto services to participate in the Ethereum liquid staking protocol. Additionally, the focus on sustainable growth and discouraging harmful practices like cycle staking demonstrates Lido DAO’s commitment to long-term success.
As the vote progresses, it will be interesting to see how the Lido DAO and its members shape the future of staking. Stay informed about the latest developments in the crypto world by visiting Uber Crypto News.