- Lyra Governance v2 shifts from a representative council model to a fully autonomous on-chain system, empowering token holders to directly govern the Lyra DAO.
- Token holders can stake LYRA tokens to receive stkLYRA, granting them proposal and voting rights in the governance process.
- Delegation allows token holders to allocate their governance powers to others, fostering a more inclusive and efficient decision-making environment.
- Treasury management and decentralized development will be facilitated by Lyra Governance v2, enabling any group or individual to propose funding and contribute to the protocol.
- The transition to Lyra Governance v2 aims to improve dependability, security, and reliability, fostering innovation and paving the way for a more secure and dependable ecosystem.
The scope of the Lyra DAO has expanded to include a wide range of traders, integrators, institutions, and communities across DeFi. As a result, the priority for Lyra Governance needs to shift from emphasizing speed and flexibility to focusing on dependability, security, and reliability.
Lyra Governance v2 signals a progression from a representative council model, introducing a fully on-chain system that allows LYRA token holders to directly govern the protocol and treasury. By staking LYRA tokens, holders receive stkLYRA tokens, which grant them proposal and voting rights in the governance process. The new governance system also supports cross-chain governance, enabling management of multiple protocol deployments and treasuries on different networks.
Token Rights and Delegation
In Lyra Governance v2, LYRA token holders can stake their tokens to receive stkLYRA, which grants them governance powers proportional to their balance. These governance powers enable token holders to vote and submit new proposals.
🗳️How to vote on a new proposal
- Head to https://app.lyra.finance/vote
- Select an active LEAP proposal
- After reading the details of the proposal and checking out the forums, select your ‘For’ or ‘Against’ stance
- Select ‘Submit Vote’ and sign the transaction
- You’ve now successfully voted on a LEAP 🎉
✍️How to create a new proposal
- Head to the Lyra Governance Forums and copy the available template. After looking at previous Lyra Request for Comments (LRFC) to understand the structure, write your proposal including title, summary, motivation and specification.
- Discuss the proposal with the community and share your reasons why you authored the proposal
- After some discussion, the LRFC is proposed on Snapshot for stkLYRA holders to signal approval or dismissal.
- The LEAP is submitted to the Lyra Governance system for stkLYRA holders to vote on.
- If approved, the LEAP's payload is sent to the relevant timelock for automatic execution. If rejected, no further action is taken.
- You’ve now successfully submitted a LEAP, head to forums to answer questions from the community 🎉
Lyra Governance v2 allows users to delegate one or both of their governance powers (proposal and voting rights) to other token holders. The delegation process in Lyra Governance v2 is designed to be user-friendly, enabling token holders to easily delegate their rights to others in the community. Token holders can choose to delegate both their rights to one user or delegate each right to different users, depending on their preferences and trust in the delegates. By doing so, Lyra Governance v2 fosters a more collaborative, decentralized, and efficient decision-making environment for the protocol's growth and development.
The delegation tool will launch in the coming months.
Lyra Enhancement Action Proposals (LEAPs)
As with Lyra Governance V1, proposals that impact the protocol, treasury, or governance framework take the structure of Lyra Enhancement Action Proposals (LEAPs). They are adapted from industry-standard frameworks like EIP and BIP and require a specific structure, including a simple summary, abstract, motivation, specification, rationale, test cases (for code-related proposals), and a copyright waiver. You can view current and past LEAPs here.
The life cycle of a LEAP can be seen in the image below involving several stages, from creation and community discussion to off-chain signalling (optional), on-chain proposal submission, and finally, execution or rejection.
Treasury and Decentralized Development
In Lyra Governance v2, the system takes ownership of all treasury assets currently held in multisig safes on Ethereum, Optimism, and Arbitrum. This means that any movement of DAO funds requires passing a proposal. Any group or individual can make a proposal to governance for funding.
As Lyra continues to decentralize, it is essential to make it easy for multiple independent groups to contribute to the protocol and receive funding from the DAO. Decentralizing the development process is vital for the protocol's long-term success, as it allows improvements to be made without relying on a single group. When implemented effectively, it can increase development speed, improve overall quality, and foster innovation. However, before governance v2, coordinating this process required significant effort.
With on-chain governance, any team or individual ("service provider") can easily apply to the DAO for funding directly. Token holders will be responsible for assessing applications from service providers and setting the project direction, high-level goals, and objectives in collaboration with the community. Any service provider can work to implement these goals and propose their solution to the DAO, creating a multi-team structure that fosters decentralized development.
The Road Ahead
The transition to Lyra Governance v2 marks a significant step towards dependability and decentralization in the Lyra project. As the community embraces the new governance system, it will foster innovation, improve overall quality, and pave the way for a more secure and dependable ecosystem. The project will continuously refine its governance framework to better serve stakeholders and ensure an efficient, secure, and user-friendly process.