Author: Stake DAO Association
Summary
This proposal updates the Stake DAO governance framework, originally established under SDGP-26, to reflect the upcoming migration from veSDT to vlSDT (SDGP-63) and to introduce a structured classification of proposals with tailored debate periods, voting durations, quorum thresholds, and execution rules. It also introduces a super-quorum mechanism for immediate execution, and a protective veto right for the Stake DAO Association.
Regulatory & Legal Notice
This proposal is a governance coordination document relating to the operation of a decentralised protocol and associated smart contracts. It is provided for informational and technical purposes only.
Nothing in this proposal constitutes or shall be construed as:
(i) an offer, solicitation, or recommendation to purchase, sell, or hold any crypto-asset, token, or financial instrument;
(ii) the provision of investment advice, portfolio management, or any regulated financial service; or
(iii) an invitation to engage in any activity that would qualify as a regulated service under applicable laws.
The Stake DAO protocol operates through non-custodial smart contracts on public blockchain networks. The Stake DAO Association does not custody user funds, execute transactions on behalf of users, or act as an intermediary.
This proposal does not create any contractual relationship, fiduciary duty, or legally binding obligation between the Stake DAO Association, token holders, delegates, or any other participants.
Participation in governance is voluntary and carried out at the sole discretion and risk of each participant.
Regulatory frameworks that may be relevant include, without limitation:
- Regulation (EU) 2023/1114 on Markets in Crypto-Assets (“MiCA”);
- Swiss financial market regulations, including FINMA guidance;
- Any other applicable local laws depending on user jurisdiction.
Nothing herein should be interpreted as legal, financial, or tax advice.
No Agency or Partnership
Nothing in this governance framework shall be deemed to create any form of partnership, joint venture, agency, or similar relationship between token holders, delegates, the Stake DAO Association, or any other participants.
Token holders and delegates act independently and do not represent the Stake DAO Association.
Motivation
Context
The current Stake DAO governance framework was established under SDGP-26 (November 2023), which consolidated the previous SDIP, SDIR, and SDGP categories into a single unified SDGP framework. Under SDGP-26, all proposals follow the same process: 3 days of community feedback on the governance forum, followed by a 7-day voting period on Snapshot, with a 15% quorum requirement. Voting power is determined by veSDT holdings, and proposals are administered by veSDT holders.
With the adoption of SDGP-63, Stake DAO is transitioning to a vlSDT model that provides flat, non-decaying voting power (1 SDT locked = 1 vote). This creates the opportunity — and the necessity — to update the governance framework to:
- Reflect the new voting power model: Replace all references to veSDT with vlSDT as the governance token conferring voting rights.
- Introduce proposal categories with appropriate urgency levels: Not all decisions require the same deliberation timeline. A treasury reimbursement following a security incident (such as SDGP-65) requires faster action than a routine governance proposal, while introducing an agile framework for lending market parameter adjustments enables Stake DAO to fully decentralise the lending vault product.
- Strengthen governance legitimacy and security: Through differentiated quorum requirements, a super-quorum for immediate execution, and a protective veto mechanism for the Association.
- Introduce the possibility of delegating vlSDT voting power: for smooth execution of proposals and increased participation, users will be able to delegate their vlSDT voting power to delegates of their choice.
Limitations of the Current Framework
- One-size-fits-all timelines: SDGP-26 applies a uniform 3-day debate + 7-day vote process to all proposals, regardless of urgency or impact.
- No expedited path for emergencies: Critical situations (security incidents, exploit responses) are forced through the standard 10-day timeline (3+7), delaying necessary action. The recent Votemarket incident (SDGP-65) illustrated the need for a faster governance track.
- No formal veto safeguard: There is currently no explicit mechanism to prevent the execution of a malicious proposal resulting from a governance attack.
- No lending-specific governance path: With the launch of the Stake DAO curation vertical (SDGP-58), lending vault parameter adjustments require a governance process agile enough to allow for decentralised management.
Governance Principles
This framework is guided by the following principles:
-
decentralisation and open participation;
-
transparency and verifiability;
-
security and risk minimisation;
-
proportionality of decision-making processes;
-
and alignment with applicable legal frameworks.
Specification
1. Voting Power: Migration from veSDT to vlSDT
Effective upon the deployment of the vlSDT contract (as approved under SDGP-63):
- All governance voting power shall be determined exclusively by vlSDT holdings.
- 1 vlSDT = 1 vote. Voting power does not decay over time.
- All references to veSDT in the governance framework, Snapshot space configuration, and related documentation shall be replaced by vlSDT.
- The Snapshot voting strategy shall be updated to read vlSDT balances (including checkpointed balances) as the sole source of voting power.
1.1 Voting Integrity Safeguards
Voting power must reflect legitimate economic ownership of vlSDT. The use of temporary voting power (including but not limited to flash loans, short-term borrowing, or other forms of artificial voting amplification) may be considered invalid for governance purposes.
The Stake DAO Association reserves the right, acting in good faith, to disregard or challenge votes that are reasonably suspected to arise from manipulation or technical exploitation.
2. Proposal Categories
This framework replaces the unified SDGP category from SDGP-26 with four proposal classes:
Category A — Stake DAO Governance Proposals (SDGP)
Scope: General governance decisions, including but not limited to: grant requests, fee adjustments, strategic partnerships, integration requests, protocol parameter changes, infrastructure upgrades, contributor rewards, etc.
| Parameter | Value |
|---|---|
| Forum debate period | 3 days minimum |
| Voting period | 7 days |
| Debate and vote | Sequential (debate first, then vote) |
| Quorum | 15% of total vlSDT supply |
| Approval threshold | Simple majority (>50% of votes cast, excl. abstentions) |
| Anticipated execution | If super-quorum is reached |
Process:
- Proposal posted on the governance forum with a minimum 3-day debate period.
- After the debate period, the proposal is posted on Snapshot for a 7-day vote.
- If quorum is reached and the proposal achieves a simple majority, the DAO Multisig may execute the approved action.
Category B — Emergency Proposals
Scope: Exclusively reserved for situations requiring immediate governance action. Examples include: responding to a security incident, authorizing emergency treasury disbursements to reimburse affected users (cf. SDGP-65), activating emergency protocol parameters, etc.
| Parameter | Value |
|---|---|
| Forum debate period | 24 hours |
| Voting period | 24 hours |
| Debate and vote | Concurrent (debate and vote run in parallel) |
| Quorum | 30% of total vlSDT supply |
| Approval threshold | Simple majority (>50% of votes cast, excl. abstentions) |
| Anticipated execution | If super-quorum is reached |
Process:
- Proposal posted simultaneously on the governance forum and Snapshot.
- The forum post must include a clear justification of the emergency nature of the proposal.
- Debate and voting run concurrently for 24 hours.
- The higher quorum requirement (30%) aims to ensure that emergency decisions carry broad community legitimacy despite the compressed timeline.
- If quorum is reached and the proposal achieves a simple majority, the DAO Multisig may proceed with execution without delay, subject to applicable security, technical, and legal validation.
Abuse prevention: Any proposer invoking the Emergency category for a matter that does not constitute a legitimate emergency may see the proposal vetoed by the Association (see Section 4 below). Community members are encouraged to flag inappropriate use of the Emergency category on the governance forum.
Category C — Minor Impact Proposals
Scope: Low-impact, routine, or housekeeping decisions that do not materially affect the protocol’s security, contract architecture, or strategic direction. Examples include: small bug bounty payments (e.g. $1,000), minor operational expenditures, cosmetic parameter updates, non-controversial administrative actions, answering to a short term RFP, etc.
| Parameter | Value |
|---|---|
| Forum debate period | 24 hours |
| Voting period | 24 hours |
| Debate and vote | Concurrent (debate and vote run in parallel) |
| Quorum | 30% of total vlSDT supply |
| Approval threshold | Simple majority (>50% of votes cast, excl. abstentions) |
| Anticipated execution | If super-quorum is reached |
Process:
- Proposal posted simultaneously on the governance forum and Snapshot.
- The forum post must clearly indicate why the proposal qualifies as minor impact.
- Debate and voting run concurrently for 24 hours.
- The elevated quorum (30%) compensates for the shortened timeline, ensuring that even fast-tracked minor decisions have sufficient community awareness.
- If quorum is reached and the proposal achieves a simple majority, the DAO Multisig may execute.
Scope limitation: If a community member challenges the classification of a proposal as “minor impact” during the debate period, and the challenge is supported by substantive arguments, the proposer should consider withdrawing and resubmitting under Category A (SDGP).
Materiality Threshold:
A proposal shall not qualify as “Minor Impact” if it:
-
Affects smart contract logic;
-
Impacts user funds or risk parameters;
-
Introduces new integrations or counterparties;
-
Exceeds a threshold of $20,000.
In case of doubt, the proposal must default to Category A.
Category D — Lending Market Adjustment Proposals
Scope: Technical parameter adjustments for Stake DAO’s curated Morpho lending vaults. This includes, but is not limited to: adding or removing a lending market from a vault, adjusting supply caps, modifying collateral parameters, adjusting fees, changing roles, or any other vault parameter change.
| Parameter | Value |
|---|---|
| Forum debate period | 3 days |
| Voting period | 3 days |
| Debate and vote | Concurrent (debate and vote run in parallel) |
| Quorum | 15% of total vlSDT supply |
| Approval threshold | Simple majority (>50% of votes cast, excl. abstentions) |
| Anticipated execution | If super-quorum is reached |
Process:
- Proposal posted simultaneously on the governance forum and Snapshot.
- Debate and voting run concurrently for 3 days.
- The on-chain transaction implementing the parameter update may be submitted to the timelock during the voting period, provided that the timelock duration is at least 3 days. This means the transaction cannot be finalized before the vote concludes.
- If the vote passes (quorum met + simple majority), the timelocked transaction is allowed to execute upon timelock expiry.
- If the vote fails, the timelocked transaction must be cancelled before execution.
Rationale for concurrent execution and timelock: Lending market parameters may require timely adjustments to respond to market conditions. The 3-day duration aligns with the minimum timelock requirements of Morpho, and allows for decentralisation of the Morpho vaults while limiting the impact on the management agility of the vaults.
Lending Risk Acknowledgement:
Lending market parameter adjustments may materially impact risk exposure, liquidation thresholds, and user positions.
Participants acknowledge that such decisions involve financial risk and are made on a best-effort basis without guarantees of performance or safety.
Notice: Non-Binding Nature of Off-Chain Voting
Snapshot voting is an off-chain signalling mechanism and does not, in itself, trigger any automatic on-chain execution.
All approved proposals are subject to independent verification and discretionary execution by the DAO Multisig and/or relevant smart contract mechanisms.
Execution may be withheld where required for security, technical validation, or legal compliance.
3. Super-Quorum: Immediate Execution Mechanism
For all proposal categories (A, B, C, and D):
If 50% or more of the total vlSDT supply votes in favour of a proposal, the proposal becomes eligible for immediate execution, subject to the conditions below.
This super-quorum mechanism provides a path for rapid execution when an overwhelming majority of the community has already expressed its will. It applies uniformly across all categories.
Implementation details:
- The super-quorum is calculated as 50% of the total vlSDT supply (not 50% of votes cast), meaning it requires an absolute majority of all existing voting rights.
- Abstentions and “Against” votes do not count toward the super-quorum threshold.
- Once the super-quorum is reached, the DAO Multisig is authorized to execute the proposal without waiting for the remaining voting or debate period to expire.
- The DAO Multisig may proceed with execution, subject to:
- (i) technical validation,
- (ii) security review, where applicable, and
- (iii) confirmation that execution does not expose the protocol or its operators to material risk.
- The Snapshot vote remains open for the full duration for record-keeping purposes, but execution may proceed immediately.
4. Association Veto Right
The Stake DAO Association (Zug, Switzerland) is granted a protective veto right under the following conditions:
Nature of the Veto Right: The veto right is a protective safeguard exercised in good faith for risk mitigation purposes and does not constitute discretionary control over protocol governance.
Liability Limitation: The exercise or non-exercise of the veto right shall not give rise to any liability of the Stake DAO Association or its members toward token holders or third parties.
Scope of the veto: The Association may decline to execute (or instruct the DAO Multisig not to execute) a proposal that has been approved by governance if, and only if, the Association determines in good faith that:
- The proposal is the result of a governance attack (e.g., flash loan-based voting manipulation, vote buying, or coordinated manipulation by a malicious actor);
- The proposal would cause material and irreversible harm to the protocol, its users, or its treasury;
- The proposal violates applicable law or would expose the Association or its members to legal liability.
- The Association has clearly stated in the forum, before the end of the debate period, that the category used was not the correct one and that the proposal should be republished as a standard SDGP.
Procedural requirements:
- The Association must publish a written justification for any veto within 48 hours of exercising it.
- The justification must be posted on the governance forum and clearly state the grounds for the veto.
- The veto is subject to community override: following a veto, the community may resubmit the proposal under Category A (SDGP) with standard timelines.
If the resubmitted proposal is approved with a quorum of at least 20% of the total vlSDT supply, the Stake DAO Association shall use reasonable efforts to implement the outcome, unless doing so would:
(i) violate applicable law;
(ii) expose the Association or its members to legal or regulatory liability; or
(iii) pose a material risk to the security or integrity of the protocol.
Limitations:
- The veto right is a protective mechanism and shall not be used to override legitimate governance decisions based on policy disagreement.
- The Association shall maintain a public log of all vetoes exercised, including the date, proposal reference, and grounds.
5. Delegation of voting power
Once vlSDT is live, users will be able (but not obligated) to delegate their vlSDT voting rights to a delegate of their choice. This will be done thanks to the standard delegation strategy of Snapshot. vlSDT holders who have delegated their voting rights will always be able to override their delegate’s vote on a proposal by voting themselves.
This will increase the participation in proposals, especially in a context where, with the new governance framework, the number of proposals is expected to increase. It will also help reaching super-quorum which is nearly impossible otherwise.
Delegation Disclaimer:
Delegation does not transfer ownership of vlSDT and does not create any fiduciary duty between the delegator and the delegate.
Delegates act independently and are not agents, representatives, or fiduciaries of the Stake DAO Association.
6. Summary Table
| Parameter | Cat. A (SDGP) | Cat. B (Emergency) | Cat. C (Minor) | Cat. D (Lending) |
|---|---|---|---|---|
| Forum debate | 3 days (before vote) | 24h (concurrent) | 24h (concurrent) | 3 days (concurrent) |
| Voting period | 7 days | 24h | 24h | 3 days |
| Quorum | 15% | 30% | 30% | 15% |
| Approval | Simple majority | Simple majority | Simple majority | Simple majority |
| Super-quorum | 50% total supply | 50% total supply | 50% total supply | 50% total supply |
| Timelock pre-submit | No | No | No | Yes (≥3 days) |
7. Transition Provisions
- This framework takes effect immediately if accepted by governance, apart from the veSDT to vlSDT migration and the delegation framework that will take effect upon deployment of the vlSDT contract and the completion of the Snapshot space update to vlSDT-based voting.
- The unified SDGP category from SDGP-26 is superseded by this framework. Existing proposal numbering (SDGP-XX) is retained for continuity.
Limitation of Liability
To the fullest extent permitted by applicable law, neither the Stake DAO Association, its board members, contributors, delegates, nor any multisig signers shall be liable for any direct or indirect loss arising from:
- governance decisions,
- proposal execution or non-execution,
- smart contract interactions,
- or reliance on governance outcomes.
All actions are undertaken on a best-effort basis within a decentralised environment.
No participant should rely on governance outcomes as guarantees of any economic or technical result.
Vote
For (Yes): Approve the updated governance framework as described, including the four proposal categories, super-quorum mechanism, and Association veto right.
Against (No): Reject the proposal and maintain the current governance framework.
Abstain: Take no position on this proposal.
References
- SDGP-26 — Simplification of Proposal Categories into a Unified SDGP Framework
- SDGP-63 — Migration from veSDT to vlSDT
- SDGP-65 — Refund of Affected Users from the March 12, 2026 Incident
- SDGP-58 — Curation Vertical
- Stake DAO Governance Documentation
This proposal follows the Stake DAO Proposal Framework.