Delegate Incentivization Program 2.0

TL;DR

This proposal seeks DAO approval to make the Delegate Incentivization Program a standing governance mechanism, funded under the approved 2026 EGG request. The proposed program is designed to auto-renew annually, pay delegates in USD-denominated stablecoins, remove gas reimbursements, and migrate the operational and payment rails to the Lido Labs Foundation.

This extension does not introduce any additional funding for 2026. Funding for subsequent years remains subject to annual EGG approval.

Motivation

This proposal extends the previous Delegate Incentivization Program (DIP) as a permanent governance mechanism, supporting expert, long-term-aligned delegates trusted by LDO holders, unless and until Lido DAO explicitly decides the program is no longer needed.

Today, more than 51M LDO are delegated on Aragon (source), part of that delegated to public delegates. Delegates participate in nearly 100% of votes, review on-chain proposals, track governance timelines, provide structured feedback to contributors, and actively represent the Lido DAO community's interests across public channels.

This group forms an important layer of Lido DAO’s decision-making process. Preserving its capacity, continuity, and sustainability is critical for:

• stable quorum formation,
• consistent governance outcomes,
• reliable contribution of delegated LDO to governance decisions,
• scalable delegation growth without sacrificing decision quality.

The last year of the program demonstrated that delegate incentivization materially improves governance reliability, with every quorum achieved involving active delegate participation. DIP 2.0 transitions the program from a time-bound experiment into a durable DAO primitive.

Scope of Changes

DIP 2.0 introduces the following updates:

• The program is open-ended and remains active unless and until amended or discontinued through a DAO governance vote. The program may be terminated, paused, or modified at any time via the DAO's governance process, including by discontinuing or not renewing its funding.
• 2026 program funding moves under the 2026 Ecosystem Grant gRequest, no additional funding for 2026 is requested.
• Future-year budget requests are handled via the standard annual EGG process.
• To be eligible for compensation, a delegate should hold ≥1M LDO delegated on Snapshot and ≥1M LDO delegated on Aragon. This requirement will take effect in Q3 2026, following a two-quarter transition period. During the transition period, the existing eligibility criteria remain applicable.
• Compensation switches from LDO (TWAP) to USD-denominated stablecoins, which aims to improve budgeting predictability and reduce short-term volatility, while long-term alignment is maintained through delegated LDO.
• Eligibility snapshot timing updated: delegation snapshots now occur on the first day of the first voting slot of each quarter, replacing the pilot’s snapshot that used to be taken on the first calendar day of each quarter.
• Gas reimbursement is discontinued due to significantly lower Ethereum transaction costs.
• Agora will no longer participate in the Delegate Oversight Committee. Accordingly, the two committee members from Agora are proposed to be replaced by contributors to the Lido Labs Foundation.
• Qualitative reporting simplified; focus shifts to direct monitoring and intervention.

Program Conditions

• Total 2026 annual budget: stays unchanged, up to $300,000, determined and approved as part of the annual grant request.
• Quarterly cap for 2026: up to $75,000, representing one quarter of the approved annual budget.
• Future-year budgets: the annual budget for each subsequent year will be defined and approved at the time of the corresponding grant request (EGG).
• Maximum compensation per delegate: $15,000 per quarter.
• Distribution model: All eligible delegates receive equal portions of the quarterly pool.

Eligibility and Merit-Based Criteria

To qualify for incentives in a given quarter, a delegate must:

• Hold ≥1M LDO delegated on Snapshot and ≥1M LDO delegated on Aragon.

  Transition period: The current program requires delegation on only one platform (Snapshot or Aragon). This requirement remains in effect for Q1 and Q2 2026. Starting Q3 2026, delegation on both Snapshot and Aragon will be required.

• Be the first delegate selected by a delegator address in a quarter: delegated LDO from an address counts toward the ≥1M threshold only for the first delegate as of the first day of the first voting slot in that quarter, as an anti-sybil measure, if multiple delegations are made.

• Participate in ≥70% of all votes during the quarter.

• Maintain an active public delegate thread, including:

  • vote rationales,
  • feedback,
  • participation in proposal discussions,
  • on-chain votes verification.

Program Process and Timeline

• Eligibility snapshot: Eligible delegates will be determined on the first day of the first voting slot of each quarter.
• Quantitative performance review (Voting Power, participation, reasoning): Conducted at the end of each quarter.
• Incentive distribution: Executed during the following quarter, after publication of:
  • voting participation,
  • eligibility confirmation,
  • equalized payout calculation.

Qualitative Oversight

Based on last year’s experience, the Delegate Oversight Committee concluded that formal qualitative scoring has become low-signal and repetitive.

Proposed revised approach:

• Quarterly qualitative reports are removed.
• The Delegate Oversight Committee monitors delegate behavior continuously.
• Issues are addressed directly with delegates.
• Persistent problems may result in removal from the incentivization program, subject to a decision of the committee.

Delegates and community members are encouraged to flag concerns to support accountability.

Operational Rails and Execution

The Delegate Incentivization Program operates as a grant-based program, which Delegate Oversight Committee multisig has been adopted by the Lido Labs Foundation, following Lido DAO approval (see here).

Therefore, funding and execution of the program will follow and be subject to Lido Labs Foundation’s standard payment procedures, including applicable due diligence. No individual agreements with delegates are required. Participation in the program and fulfillment of the published eligibility criteria are sufficient to qualify for incentive distribution, which payment is then subject to the above-mentioned checks.

No changes to delegate-facing requirements, eligibility criteria, or incentive structure result from this transition.

Delegate Oversight Committee

Committee Responsibilities

• Maintain the public delegate registry.
• Determine delegate eligibility based on the approved criteria.
• Publish quarterly reports, including quantitative performance review and incentives details.
• Submit the list of eligible wallet addresses for payout.
• Coordinate with Lido Labs Foundation to execute distributions under established internal procedures.
• Address delegate performance issues when required.

Committee composition

It is proposed to update the composition of the Delegate Oversight Committee by replacing the two Agora members with contributors to the Lido Labs Foundation. While Agora facilitation was valuable during the program's early stages, it is no longer required for a settled ongoing program.

Accordingly, the following rotation is proposed:

• Charlie → Kate_Alekseeva
• Marcela → nikita.p

The current 3/5 setup remains unchanged.

Next Steps

If the proposal is approved:

• The current DIP will transition to DIP 2.0 without interruption, moving from a time-bound pilot to a standing governance mechanism.
• The updated mandate and eligibility criteria will take effect, with a two-quarter transition period (Q1–Q2 2026) for the dual-platform delegation requirement.
• Operational and payment rails will formally transition to the Lido Labs Foundation.
• The Delegate Oversight Committee composition will be updated as proposed.
• Quarterly monitoring and reporting will continue under the revised oversight framework.
• Future-year funding will be proposed through the standard annual EGG process.