Establish the stVaults Committee

Background

Lido contributors are preparing to launch the V3 Protocol upgrade, which is currently in testing and planned for release later this fall. You can read more about V3 and stVaults in the announcement post or the white paper.

Committee purpose

The Lido V3 stVaults risk assessment framework allows for flexibility in fees and the reserve ratio for specific vaults, depending on specific circumstances, such as the Node Operator(s) involved, or particular business cases. To handle requests from Vault Owners and Node Operators for non-default terms, as well as to monitor stVaults’ performance, it is proposed to create an stVaults Committee.

Responsibilities

Committee members should pursue two primary objectives, in this order:

1. Ensure protocol security and resilience
2. Enable stake growth and DAO fee efficiency

It is proposed that the committee multisig, acting on-chain on behalf of the committee, where committee decisions should be made by consensus, will be granted the ability to configure stVaults and/or Node Operator Tiers, within the confines of the Easy Track optimistic governance process:

• Set the reserve ratio for specific tiers or vaults.
• Define the default and custom tier grids for node operators.
• Set DAO fee values for specific vaults and for tiers within a given node operator’s grid.
• Bad debt compensation management between vaults/tiers in complex cases like mass slashing.

The committee should primarily rely on the stVault risk framework when assessing situations and making decisions. All on-chain actions will go through Easy Track, the Lido DAO optimistic governance process, which enables LDO-holders to object to Easy Track motions over a 72-hour period.

Funding

No additional funding is required other than transaction gas for committee on-chain actions, which will be requested from the Gas Supply Committee.

Committee setup

Address: 0x18A1065c81b0Cc356F1b1C843ddd5E14e4AefffF

Signing threshold: 3/5

List of signers:

• @Mol_Eliza, co-author of the assessment framework and Lead Analyst at Lido Labs.
• @mikgur, co-author of the risk assessment framework and Analytics Team Lead at Lido Labs.
• @Marin, Head of Protocol Relations at Lido Ecosystem.
• @KimonSh, Head of Node Operator Mechanisms at Lido Labs.
• @dmitrii_v, Lead Product Manager and contributor on the stVaults team at Lido Labs.

Note. Committee members must avoid conflicts of interest; if any potential overlaps arise, they must disclose the associated conflict(s) and the committee must decide on how to proceed with the affected cases/assessments (e.g., recusal of affected member(s) from the relevant decision).

The committee’s lifespan

The committee will remain in place until its responsibilities are fully automated or stVaults are decommissioned.

Tokenholders may object to the committee’s in-flight motions made via Easy Track; alternatively, full on-chain votes can also be made that override committee-set values, or to set new values directly. Ultimately, if the DAO disagrees with the committee’s overall performance, it has the power to dissolve the committee, instruct the committee to replace participating members via a governance vote, or entirely substitute the committee for another committee or mechanism.

Reporting

All committee actions will be tracked via Easy Track. In addition, the Committee will create a dedicated analytics dashboard to monitor stVaults performance — specifically, fee efficiency and stVaults’ impact on the overall protocol.