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LidoDAO, the governance body that controls Lido Finance, has voted to reject a proposal that would have sent 1% of the LDO token supply to Dragonfly Capital in exchange for about $14.5 million in DAI.
LDO is the native token on the Lido Finance protocol, which issues the Lido Staked Ether (stETH) token. DAI is the dollar-pegged stablecoin issued by the Maker Protocol. If it had passed, crypto VC Dragonfly Capital would have received 10 million LDO tokens at $1.45 each.
A total of 609 votes were cast across three options, but the proposal was ultimately rejected with 43 million total tokens in favor of rejection. Nine whales whose collective 40.3 million tokens comprised the vast majority of the weight of the votes.
The other two options were each in favor of the proposal either with a one-year lockup on the LDO tokens or with no lockup.
This vote was for the first half of the total 20 million LDO token allocation stipulated in the proposal. The second portion of 10 million LDO tokens could be sold to LidoDAO’s treasury, but it is unclear whether that vote will take place following this first rejection. Lido’s treasury is currently valued at about $228 million as of the time of writing.
The July 18 proposal issued by DAO member Jacob Blish aimed to secure a two-year runway for LidoDAO to carry out its functions in the Lido Finance protocol without worrying about further fundraising. Blish stated:
“This will ensure Lido and its core contributors are able to continue the important work needed for the protocol in the long term and to flourish as an autonomous, self-governing collective.”
Blish added that the proposal specifies accumulation of stablecoins to ensure that Lido can remain in a “steady state to ensure survivability and security for Lido independent of further market actions.”
Lido community members appear nonchalant about the outcome of the vote as the project’s Discord and Twitter accounts have been silent since the results came in. With the rejection, the proposal will go back to the drawing board and possibly be voted on again.
Dragonfly Capital, led by Haseeb Qureshi and Bo Feng, has at least 57 companies in its crypto and Web3 investment portfolio. The firm closed a $650 million funding round in April.
Lido allows ETH investors to stake their coins in preparation for the Ethereum network’s transition to Proof-of-Stake (PoS) consensus expected by September.
Related: Lido co-founder discusses the future of Ethereum at EthCC
The LDO whale who swung their considerable weight of 17 million tokens to reject the proposal has voted in favor of another ongoing vote at LidoDAO that will add a developer to one of the project’s multi-sig wallets if passed. This proposal is designed to increase the security of the protocol’s funds.