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

TL;DR

It is proposed to incorporate the Lido Labs BORG Foundation that supports Lido DAO's goals by fostering research, development, deployment and facilitating maintenance of the Lido protocol, smart contracts, applications and infrastructure.

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 Labs BORG Foundation.
• The Lido Labs 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 goals of Product line for the staking ecosystem (stETH token), Market for validators (NO Set) and LDO alignment (Governance).
• The Lido Labs BORG Foundation is limited to engage only in the activities identified in the Purposes (described below in the Motivation section).
• Similar to the Lido Alliance BORG proposal that was previously approved, the Lido Labs BORG Foundation will be a BORG established as an exempted limited guarantee foundation company in the Cayman Islands without members or beneficiaries. The foundation structure of the Lido Labs 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 Labs BORG Foundation. No budget and funding requests are made in this proposal, the Lido Labs 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 Labs BORG Foundation

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

• researching, developing, deploying and helping to maintain the Lido on Ethereum protocol, canonical Lido smart contracts and related Lido applications and infrastructure (as applicable, with the relevant Lido DAO approval),
• organizing and participating in events, webinars, AMAs, workshops, and other initiatives to foster community collaboration, knowledge sharing, and awareness of the Lido protocol & ecosystem,
• developing and maintaining a Node Operator Portal, creating and maintaining technical and operational documentation, knowledge base articles, guides, and tutorials for those interested in participating as Node Operators (NO) in the Lido on Ethereum protocol,
• helping develop proposals for, and support, mechanisms and processes through which the NO community utilizing the Lido protocol is organized and managed, (including supporting NO onboarding/offboarding processes, potentially via DAO-approved subgovernance groups or Multisigs),
• developing and supporting Lido DAO’s governance processes and ecosystem (e.g. Snapshot/Aragon voting processes, Easy Track, Dual Governance - as applicable subject to DAO voting for any protocol changes),
• identifying opportunities for collaboration with other Ethereum staking projects and fostering new cross-protocol initiatives within the Ethereum staking community, including any technical integrations,
• identifying opportunities for grants related to staking or the wider Ethereum ecosystem and facilitating the process for such initiatives (e.g. via the Lido Ecosystem Grants Organisation), and
• undertaking other ancillary and related services to the foregoing, (collectively, the “Purposes”).

The Lido Labs BORG Foundation will propose and advance GOOSE initiatives aligned with its Purposes, subject to current and future EGG approvals. It will do this by:

• Developing innovative staking solutions to boost stETH adoption, such as tailored options for institutions and improved node operator mechanisms,
• Collaborating with the Lido Ecosystem BORG Foundation and ecosystem partners to enhance Ethereum's decentralization and resilience while delivering appealing staking products,
• Advancing governance processes (e.g., Dual Governance) with a focus on security and DAO culture.

Important Benefits of Lido Labs BORG Foundation

Assists with Decentralized Administration

The formation of the Lido Labs BORG Foundation assists Lido DAO with having infrastructure within a new entity that is bound by and restricted to the Purposes, with a public organization structure monitored by Lido DAO.

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). 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 Labs BORG Foundation, with the Board responsible for monitoring compliance (and having the authority to directly replace individual multisig members if necessary). As with the current Lido Contributors Group entities, the Lido Labs BORG Foundation will also continue to publish reports detailing the crypto assets held in the multisigs.

Easier Compliance

The formation of the Lido Labs 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 Labs 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 Labs BORG Foundation.

Committees and Multisigs

• The Lido Labs BORG Foundation will help oversee and seek to legally “wrap” the following committees (and their multisig(s)): Lido Ecosystem Grants Organization (LEGO) and the Community Lifeguards sub-committee, Gas Supply Committee, Relay Maintenance Committee, GateSeal, Emergency Brakes, Treasury Management Committee, Simple DVT Module Committee, Community Staking Module Committee, Delegate Oversight Committee (the “Multisigs”).
• It will further create a new operational funds multisig. The Board of Directors shall propose configurations/Easy Track factories for this multisig ie. security limit amounts, limit periods, address and verified signers on the forum two weeks before an on-chain vote, and request that proposed configuration (new or changes to existing) be included in the nearest omnibus vote on Aragon.
• In general, the Lido Labs BORG Foundation would have the ability to adopt other 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 Labs BORG Foundation will have the ability to assume some of the 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 Labs BORG Foundation.
• For the nominated multisigs to be wrapped, existing multisig members will be required to execute multisignature participation agreements with the Lido Labs BORG Foundation, acknowledging and agreeing it now oversees those multisigs. This is expected to lead to improved accountability of the multisigs (as described above under Benefits section) in addition to more liability protection for multisig members through agreements with the Lido Labs BORG Foundation.
• Existing contracts with third parties such as vendors and contributors can either be novated or assigned to Lido Labs BORG Foundation, as applicable (from Lido Contributor Group entities or affiliates).

Implementation

• The Lido Labs BORG Foundation will be established immediately upon approval, adopting bylaws and governance as outlined. Funding from the DAO treasury is expected to start in April 2025, with budgets managed via multisigs under the BORG framework.
• The Board will include reputable Lido community members and a professional Cayman Islands-based Web3 director for technical and legal expertise. Initial directors are @konstantin, @EvgeniyEmelyanov, @skozin, and a Hash Directors representative.
• 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.
• ATC, PML and RCC will stop funding requests after their deadlines. Unused funds may support migration for up to two months before being returned 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 Labs 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 Labs BORG Foundation as described herein.