Question 1

What is LDO?

Accepted Answer

LDO is the ERC-20 governance token of Lido DAO, used to influence governance decisions for the Lido liquid staking protocol. It represents governance voting power, rather than the liquid staking token users receive after staking ETH with Lido. Lido DAO manages key protocol parameters through votes by LDO holders, such as fees and the designation of node operators and oracles. Holding LDO is a condition for participating in these decisions, but holding the token itself is not the same as staking ETH or receiving protocol staking rewards.

Question 2

How is LDO voting power calculated and used?

Accepted Answer

LDO voting weight is proportional to the amount of LDO held by the voting address: the more LDO an address holds, the greater its voting weight in DAO decisions. The LDO contract is derived from MiniMe Token, and balances can be queried at any block height; this feature allows governance mechanisms to determine voting power based on a balance snapshot at a specified block, rather than looking only at balances when voting ends. The governance mechanism itself can also be upgraded. Governance on Ethereum takes place within the DAO architecture; for other networks, Lido documentation states that the relevant processes are implemented through committees and multisigs. Therefore, “holding LDO allows voting” does not mean that all day-to-day operations on every chain are completed through the same direct voting process.

Question 3

How does LDO differ from stETH, wstETH, and unstETH?

Accepted Answer

LDO, stETH, wstETH, and unstETH address different needs. LDO is used for DAO governance; users receive stETH when they stake ETH with Lido, and stETH represents the amount of ETH withdrawable from the Lido protocol while reflecting staking rewards and penalties; wstETH is the non-rebasing wrapped form of stETH, whose balance does not change on its own, while the amount of stETH represented by each token changes with the exchange rate. When an stETH holder requests a protocol withdrawal, their position in the withdrawal queue is represented by a non-fungible unstETH NFT. Therefore, holding LDO does not automatically create an stETH balance, entitlement to the wstETH exchange rate, or eligibility for the withdrawal queue; these assets have different accounting methods and uses.

Question 4

What matters does LDO governance actually decide?

Accepted Answer

Lido DAO's responsibilities go beyond voting. They include deploying and updating the liquid staking protocol, determining key parameters, approving incentives, managing node operators, and responding to emergencies. Node operator management in particular involves initial vetting, onboarding new operators, and taking appropriate action regarding existing operators when slashing occurs under underlying chain rules. To reduce the burden of conducting a full on-chain vote on each routine and less contentious matter, Lido has also developed the Easy Track mechanism. Its purpose is to reduce token holder voting fatigue and on-chain Gas costs, while providing relevant groups and node operators with greater execution autonomy under established safeguards.

Question 5

What is the relationship between Lido service fees and LDO holders?

Accepted Answer

Lido documentation states that protocol service fees accrue to the DAO and may enter reserve and development funds for research, development, liquidity mining incentives, protocol upgrades, and other DAO-approved uses. The funding path here is “protocol service fees enter funding arrangements managed by the DAO, and governance then determines how they are used.” This does not mean LDO holders automatically receive service fees or staking yield in proportion to their token holdings. LDO's disclosed role is governance; meanwhile, the stETH balance and the wstETH-to-stETH exchange rate are the accounting mechanisms described in the documentation as reflecting staking rewards and penalties. Understanding the difference helps avoid conflating DAO treasury management with token holder returns.

Lido DAO Token (LDO) Price