Lido Finance Proposes Governance Shift for Bridge Management, SNOP Protocol Upgrade

Key Governance Proposals

Lido Finance has initiated a governance vote concerning two significant proposals: transferring bridge-related partnership management to the Lido Ecosystem Fund and upgrading the Standard Node Operator Protocol (SNOP) for Ethereum validators to version 3. These proposals aim to enhance operational efficiency, strategic flexibility, and overall resilience within its liquid staking ecosystem.

The Event in Detail

One central proposal seeks to transfer the leadership of bridge-related strategic partnerships and negotiations involving stETH and wstETH from the Network Expansion Committee (NEC) to the Lido Ecosystem Fund. This authorization would empower the Lido Ecosystem Fund to negotiate and execute strategic agreements with bridge counterparties on behalf of the Lido DAO. The NEC would transition to a subject matter expert role, providing expertise and best practices, with its membership slated for rotation to align with these new objectives. To safeguard the process, a Bridging Security Committee (BSC) would be established under Lido Labs Foundation, with the authority to pause or block partnerships presenting unresolved risks, escalating such cases to the DAO. This change would remove the previously approved 5-day DAO objection period for canonical bridge recognition. The Lido DAO would retain ultimate authority to cancel, amend, or override any executed strategic agreement.

Since November 2024, the NEC has facilitated the expansion of wstETH to four new networks, resulting in 10,000 wstETH bridged, and an all-time high of 38,000 ETH bridged on April 25, 2025.

The second proposal focuses on upgrading the Standard Node Operator Protocol (SNOP) for Lido Ethereum validators to v3. This revision is necessitated by the evolving validator withdrawal mechanics on Ethereum, particularly the introduction of triggerable withdrawals, which were not formalized when SNOP v2 was introduced. Key changes in SNOP v3 include the incorporation of triggerable withdrawals, adapting operator responsibilities and exit procedures; standardization of structure and definitions aligned with recent SNOP updates and Ethereum adjustments; an extended scope to include new modules such as Simple DVT and Community Staking; explicit responsibilities for Node Operators regarding validator exits, response times, withdrawal triggering, and reporting; and updated consequences for non-compliance across staking modules.

Market Implications

The proposed governance shifts signal a strategic pivot for Lido Finance towards enhanced operational agility and a focused "use case expansion" strategy, moving beyond a "market share race." Empowering the Lido Ecosystem Fund for bridge partnerships aims to unlock opportunities to improve the competitiveness and resilience of the Lido protocol in an evolving market. This move aligns with Lido's established goal of developing relationships and promoting the expansion of (w)stETH across blockchains. The establishment of the Bridging Security Committee (BSC) introduces an additional layer of security, addressing potential risks associated with cross-chain interactions.

The SNOP v3 upgrade directly responds to fundamental changes in Ethereum's staking mechanics. By incorporating triggerable withdrawals and clarifying Node Operator responsibilities, Lido aims to maintain the efficiency and security of its liquid staking solution, which is critical for the broader Ethereum ecosystem. The improved clarity and adaptability in validator management are expected to foster greater trust and stability in Lido's operations and the underlying stETH asset. While protocol upgrades are generally viewed positively, the market will observe how these governance and operational changes affect Lido's efficiency and the overall liquid staking landscape.

Broader Context

These proposals reflect Lido's ongoing efforts to balance scale with decentralization, securing its long-term role in Ethereum's staking economy. The shift in bridge management underscores the increasing complexity and strategic importance of cross-chain interoperability for liquid staking derivatives like stETH and wstETH. Lido's focus on Ethereum and Layer 2 ecosystems, coupled with its engagement with restaking protocols, demonstrates a proactive approach to market evolution. The update to SNOP is a direct consequence of Ethereum protocol changes, ensuring Lido's infrastructure remains robust and aligned with the network's advancements. These internal governance and protocol adjustments contribute to the maturation of the decentralized finance ecosystem, illustrating how major protocols adapt to technological developments and strategic imperatives while maintaining stakeholder confidence through transparent governance processes, such as its "dual governance" model where LDO holders propose and vote, and stETH holders have veto and delay powers.