Establishment of Lido Ecosystem BORG Foundation as a Lido-DAO-Adjacent Foundation

TL;DR

It is proposed to incorporate the Lido Ecosystem BORG Foundation that supports Lido DAO's goals by fostering institutional and ecosystem growth.

The proposal specifies important benefits of this foundation and what committees and multisigs will be wrapped within it from its inception.

No funding is requested in this proposal.

SUMMARY - KEY POINTS

• Following the approval of the Lido Alliance BORG Foundation, the creation of a new Lido-DAO-adjacent organization (“BORG”) is proposed to serve Lido DAO and the broader Lido community – the Lido Ecosystem BORG Foundation.
• The Lido Ecosystem BORG Foundation will support the general goals set forth by the Lido DAO through its deliberative process. In particular, it will help facilitate GOOSE/ReGOOSE/GOOSE-2 goal of enabling ecosystem growth to increase the adoption of Lido protocol and stETH, with a core focus of addressing and meeting institutional requirements.
• The Lido Ecosystem BORG Foundation is limited to engage only in the activities identified in the Purposes (described below in the Purposes section).
• Similar to the Lido Alliance BORG proposal that was previously approved, the Lido Ecosystem BORG Foundation will be a BORG established as an exempted limited guarantee foundation company in the Cayman Islands without members or beneficiaries. The structure of the Lido Ecosystem BORG Foundation allows for Lido DAO to have a more active role in its governance and minimizes reliance on traditional decision-making processes and rules.
• This proposal solely concerns the formation and operation of the Lido Ecosystem BORG Foundation. No budget and funding requests are made in this proposal, Lido Ecosystem BORG Foundation will submit a new EGG budget proposal for its proposed scope of work at a later date in a separate proposal.

Purposes of Lido Ecosystem BORG Foundation

The Lido Ecosystem BORG Foundation is designed to assist the Lido DAO by:

• developing and managing relationships with institutions, projects and DAOs that wish to participate in the Lido ecosystem, which may include rewards share programs (e.g., by staking using Lido protocol directly or allowing for others to do so, including any facilitation of their users);
• promoting the expansion and the use of (w)stETH across blockchains and other projects;
• streamline the process for expanding (w)stETH to new networks;
• educating the Ethereum community on Lido protocol;
• provisioning and distributing appropriate incentives towards high impact projects to (i) strategically boost liquidity in crucial stETH applications, and (ii) identify and aid potential applications that can enrich the stETH ecosystem; and
• undertaking other ancillary and related services to the foregoing (collectively, the “ Purposes”).

Important Benefits of Lido Ecosystem BORG Foundation

Assists with Institutional Partnerships

The formation of the Lido Ecosystem BORG Foundation assists Lido DAO through the establishment of a legal entity to enter into strategic partnerships with institutional partners that is bound by and restricted to the Purposes. This unlocks institutional efforts and improves responsiveness to current opportunities and challenges.

Additional Accountability and Transparency

This framework presents a better accountability and transparency mechanism than the current Lido DAO adjacent entities by allowing Lido DAO to directly appoint/remove directors in addition to an individual or entity to serve as the Emergency Supervisor if an “Adverse Event” occurs (as defined in the Bylaws below). Emergency Supervisor is appointed directly by Lido DAO through a vote and serves as a ‘liaison’ between the Lido community and Lido Labs BORG Foundation and acts as an enforcer, helping to ensure Lido Labs BORG Foundation complies with its public commitments by monitoring its performance and adherence to its own rules (as defined in the Bylaws). Accountability of “unwrapped” multisigs’ members is enhanced because they will be subject to the policies and Purposes of the Lido Ecosystem BORG Foundation, with the Board responsible for monitoring compliance (and having the authority to directly replace individual multisig members if necessary). This accountability is further reinforced by the publication of reports detailing the crypto assets held in the multisigs.

Easier Compliance

The formation of the Lido Ecosystem BORG Foundation is designed to allow it, as needed, to procure relevant licenses or approvals for the activities that fall within the Purposes.

Power to Indemnify Contributors For Liability Claims Against Them

The Lido Ecosystem BORG Foundation will be permitted to help reduce the potential liability risks of Lido contributors by entering into traditional indemnification arrangements with contributors that provide services to the Lido Ecosystem BORG Foundation.

Committees and Multisigs

• The Lido Ecosystem BORG Foundation will help oversee and seek to “wrap” the Rewards Share Committee, Liquidity Observation Lab (LOL) Multisigs, SAFE DAO Tokens multisig wallet and Network Expansion Committee activities.
• It will further create a new operational funds multisig. The Board of Directors shall propose configurations / Easy Track factories for this multisig such as security limit amounts, limit periods, address and verified signers on the forum at least two weeks before an on-chain vote, and request that proposed configuration (new or changes to existing) to be included in the nearest omnibus vote on Aragon.
• It would also have the ability to adopt newly formed committees and multisigs, provided their activities align closely with the Purposes.
• If through any operational or regulatory analysis conducted post formation within the migration period, it is discovered that any of the above mentioned multisigs are unsuitable for wrapping within the Lido Labs BORG Foundation, then the DAO will be updated as to any new proposed strategy regarding those multisigs.

Gradual Migration of Contracts and Multisigs

• The Lido Ecosystem BORG Foundation will have the ability to assume some existing service contracts between PML or ATC and Lido contributors dedicated to the activities within the scope of the Purposes. This transition will be done through a gradual assignment of these agreements to the benefit of Lido Ecosystem BORG Foundation.
• For the nominated multisigs to be wrapped, existing multisig members will be required to execute multisignature participation agreements with the Lido Ecosystem BORG Foundation, acknowledging and agreeing that it now oversees those multisigs. This is expected to lead to improved accountability of the multisigs (as described above under the Important Benefits section) in addition to more liability protection for multisig members through agreements with the Lido Ecosystem BORG Foundation.
• Existing contracts with third parties such as vendors can either be novated or assigned to Lido Ecosystem BORG Foundation, as applicable (from Lido Contributor Group entities or affiliates).

Implementation

• The Lido Ecosystem BORG Foundation will be established immediately upon approval, adopting bylaws and governance as outlined. Funding from the DAO treasury is expected to begin in April 2025, following necessary approvals, with budgets managed via multisigs under the BORG framework.
• The initial directors will include @adcv of Steakhouse a respected Lido community member and @sen876 a Cayman Islands-based independent director from Web3-specialist directorship service provider Marfire.
• A detailed proposal for the Foundation’s work, deliverables, and budget for April–December 2025 will be submitted to the DAO in February-March 2025.
• Existing entities and multisigs (ATC, PML, RCC) will cease drawing funds after their respective deadlines, and unused funds may support operational migration for up to two months before returning to the DAO treasury. Consequently, all currently used on-chain environments will be switched off for ATC, PML, and RCC via Aragon vote.

Links to Key Documents

• Bylaws - describes operational processes;
• Memorandum and Articles of Association; and
• Multisignature Participation Agreement.

By voting “Support the proposal” in the Snapshot vote, you indicate support for the establishment of the Lido Ecosystem BORG Foundation and its Purposes as described herein.

By voting “Reject the proposal” in the Snapshot vote, you indicate you do not support the establishment of the Lido Ecosystem BORG Foundation as described herein.