Organize the Lido Alliance Program as a Lido-DAO-Adjacent BORG

Summary

Following the approval of the Lido Alliance Proposal in May, Lido DAO contributors have worked with MetaLeX to propose the creation of a LIDO Alliance workgroup, including through the incorporation of a Lido-DAO-adjacent cybernetic organization (BORG) to “legally wrap” the “Alliance workgroup” and the related assets and activities.

The Lido Alliance BORG Foundation consists of a memberless, beneficiary-less Cayman foundation whose purposes are restricted to furthering the Alliance Program, including submitting or facilitating the proposal of worthwhile Lido DAO Allies to Lido DAO and owning and holding assets contributed by such Lido DAO Allies in onchain multisigs.

The Bylaws and other legal docs of the Lido Alliance BORG Foundation provide for legal checks-and-balances between the entity and Lido DAO (explained below).

To complement the legal check-and-balance mechanisms expressed in the Lido Alliance BORG’s legal documents, the multisigs for holding the Lido Alliance BORG’s operational budget will use Easy Track — which gives Lido DAO an onchain veto over spending of these assets. The assets contributed by Lido Allies will be subject to legal checks-and-balances with the DAO and held in a transparent 4/7 multisigs staffed by the BORG Personnel. The BORG personnel hope to eventually transition these multisigs to MetaLeX’s forthcoming technology stack to provide a more full-featured set of onchain checks-and-balances mirroring the prescribed legal arrangements.

This proposal seeks to inform Lido DAO and the broader Lido community of the details of the Lido Alliance BORG and to obtain a signal of the Lido DAO’s support for the structure through an approval of the proposal. If the proposal is approved, the Lido Alliance BORG will be incorporated as described herein. More details regarding BORGs and legal aspects around them can be found in Motivation and Implementation sections of the original proposal at the research forum.

Detailed Proposal

The Lido Alliance BORG is requesting an initial budget of $125,000 for 2024, as part of the st2024 v2 EGG request approved in July and is expected to require a yearly budget of $250,000 from 2025 to operate, which will be requested through subsequent EGG requests. The budget includes director fees, local law firm fees, contributor compensation and any other operational expenses, following the EGG budget requests framework. For every new EGG request, a retro review of the last EGG spend for the Alliance BORG will also be included.

The Board of Directors of the BORG is responsible for running all aspects of the Lido Alliance program and is in charge of the BORG overall. The Directors must sit on all multisigs of the BORG. The initial Directors of the BORG would initially be adcv and Hillstone of steakhouse. Any future Directors would be approved by Lido DAO and the Board. An individual Director can be removed either by the Board itself or by Lido DAO. An individual Director may also unilaterally resign.

The Guardians of the BORG are additional members of the BORG’s multisigs appointed by the Board. They generally should follow the Board’s instructions but may refuse to sign a multisig transaction based on security or compliance considerations. The initial Guardians of the BORG would be shik_happens, mac3w, jenya_k, olga_k, Alexander_Lukin

All Lido Allies must be approved by the Board and Lido DAO, and the BORG would hold all tokens contributed by Lido Allies in the Alliance Multisigs, which will (at minimum) be 4/7 multisigs consisting of the Directors and the Guardians. Lido DAO’s co-approval is required for all usages of the Lido-Ally-contributed tokens as a security measure–this requirement is initially imposed by virtue of the BORG’s Bylaws, and Lido contributors and MetaLeX hope to create additional onchain enforcement of these rules as well, though the technical ability to do so may vary from chain to chain.

Lido Alliance Allies/Partners Multisig address - 0x92ABC000698374B44206148596AcD8a934687E66 with following signers:

• adcv : 0xcC692077C65dd464cAA7e7ae614328914f8469b3,
• Hillstone : 0xed85c7bd46dde10e1c48bbd78e9fa63076c5736c,
• shik_happens : 0x734a30ABE434012FD413666b2210a4D1aca6ec7B,
• mac3w : 0x76E0Cd4b34912Cf5381625704bCAFf232D26fFEE,
• jenya_k : 0x30E317df005B5599e372400bf360895A027120dc,
• olga_k : 0xcb408B2c5e45E43DF0F3B2d665873F805D435598,
• Alexander_Lukin : 0x1EAF931aabbB02Ca8A416040cF5b35C73Fff2A8a

Operational funds would be held separately at the discretion of the Board and are currently expected to be held in 3/5 multisig (topped up using Easy Track on a quarterly schedule). Mentioned Easy Track set is requested to be added with a following configuration for the operational multisig:

• AllowedTokensRegistry: 0x4AC40c34f8992bb1e5E856A448792158022551ca
• TopUpAllowedRecipients: (address TBD)
• AllowedRecipientsRegistry: (address TBD):
  • allowedRecipients: 0x606f77BF3dd6Ed9790D9771C7003f269a385D942;
  • limit: 250,000 * 10^18 (i.e. $250K);
  • periodDurationMonths: 3

Lido Alliance Operational Multisig address - 0x606f77BF3dd6Ed9790D9771C7003f269a385D942 with following signers:

• adcv : 0xcC692077C65dd464cAA7e7ae614328914f8469b3,
• Hillstone : 0xed85c7bd46dde10e1c48bbd78e9fa63076c5736c,
• shik_happens : 0x734a30ABE434012FD413666b2210a4D1aca6ec7B,
• mac3w : 0x76E0Cd4b34912Cf5381625704bCAFf232D26fFEE,
• olga_k : 0xcb408B2c5e45E43DF0F3B2d665873F805D435598

The permitted purposes of the BORG are to further the Lido Alliance Program as it was approved by Lido DAO.

The BORG Personnel (including the Directors and Guardians) do not owe any direct duties to Lido DAO or Lido community members, but owe duties to the BORG entity, and the BORG entity’s purposes are restricted to fulfilling the Lido Alliance Program, which benefits the Lido DAO and broader Lido community.

Alliance Multisig Members have obligations to identify material conflicts of interest and, in certain circumstances, disclose them to the Lido community.

Lido DAO approval would be required for any liquidation of the entity or any amendment of the entity’s documents that adversely affect the Lido community or any sub-constituency thereof.

The BORG has a ‘supervisor’, which is a statutory role in the Caymans intended to monitor a foundation company’s compliance with the entity’s own rules. The initial supervisor, intended to be temporary, is MetaLeX Pro LLC, the same law firm that led the creation of the BORG in consultation with various Lido contributors. This role is currently un-compensated and MetaLeX has committed to perform the role without additional compensation for up to three months. The final supervisor is expected to be a “Lido OpsBORG” or similar entity, which is currently in ideation phase and will be separately proposed to Lido DAO once various details are finalized.

If an “Adverse Event” occurs, Lido DAO may directly appoint an “Emergency Supervisor” for the BORG. “Adverse Event” is defined to include egregious violations of law or the BORG’s own rules by the BORG or BORG Personnel in connection with the BORG’s activities, certain crimes independently committed by BORG Personnel (whether or not related to the BORG’s activities), and sustained deadlocks within the BORG’s governance/decision-making. The Emergency Supervisor would have broad powers under the BORG’s Bylaws and Caymans law, including the power to investigate the Adverse Event, bring lawsuits against BORG personnel in the name of the BORG and to remove and appoint Directors. The Emergency Supervisor role is intended to be temporary and the Emergency Supervisor must resign once the Adverse Event is handled or, in any event, the Emergency Supervisor’s tenure is automatically terminated after 12 months if not renewed by Lido DAO. Lido DAO also has the power to directly set the compensation of Emergency Supervisors.

The BORG Personnel are indemnified by the BORG entity, within certain customary limits. This indemnification would be paid solely out of operating funds and not any of the Lido-Ally-contributed assets, unless Lido DAO approves to use additional funds of the BORG to indemnify the BORG personnel who acted on behalf of the BORG.

The BORG Personnel would not have personal liability to the BORG for their BORG-related activities except to the extent they engage in gross negligence, willful misconduct, or fraud.

The BORG Personnel must satisfy various eligibility criteria including not being subject to sanctions, not having previous egregious criminal convictions, and being reasonably sophisticated regarding blockchain technologies.

Voting

Note: The Lido Alliance program has already been approved by the Lido DAO.

This proposal requests the following:

• Recognition of the DAO adjacent BORG structure of the Lido Alliance program with its many check and balance mechanisms including, but not limited to, setting up on-chain tooling of the operational multisig (configuration above) to enable DAO vetoes
• Approval of the initial budget to operate the Lido Alliance BORG

By voting Approve, you indicate support for funding and operating the Lido Alliance BORG as described herein.

By voting Reject, you indicate you do not support funding and operating the Lido Alliance BORG as described herein.