Lido Finance’s decentralized governance body – Lido DAO – has voted against a proposal to sell 10 million LDO tokens (1% of the supply) for $14.5 million in DAI to venture capital firm Dragonfly Capital.
Out of the total of 609 votes, 43 million LDO tokens, accounting for 66.61%, were cast to reject the proposal.
The voting that concluded on Monday essentially had three choices for the members – agree to the proposal, agree to the sale but with a one-year lockup on the LDO tokens, or reject it entirely.
The original proposal had no mention of the token vesting period, which drew significant criticisms in the forum discussion.
Speculation of a possible conflict of interest intensified after an unknown whale wallet backed the proposal. This led to the addition of an option with at least a one-year lock-up period.
With the “Treasury Diversification #2” proposal, the liquid staking protocol essentially sought to secure two years of operating runway for Lido DAO in stablecoins in a bid to ensure stability to the Lido ecosystem as well as its core contributors.
If the DAO members hadn’t rejected the proposal, Dragonfly Capital would have received 10 million LDO tokens at $1.45 each.
Reacting to the results, Lido Finance stated that it will analyze the proposal again on the basis of all the discussions in the research forum before commencing voting.
“The Lido DAO has voted on a recent governance proposal to diversify the treasury, with the outcome being ‘No – Proposal needs more work’. Therefore the proposal will be revisited based on the discussion on the research forum and a fresh vote that accommodates that feedback will be moved asap.”