To participate in DAO governance, stakers or token holders must set a governance delegate address. Vote delegation is the process of granting a delegate the power to vote on your behalf, using your voting weight, on DAO governance issues. The delegate can be yourself (self-delegation) or a third party. A configured delegate can be changed or revoked at any time.
Delegation never involves the transfer of custody of assets but rather just the vote weight those assets represent in the Threshold DAO.
Third-party delegates are volunteers who actively participate in Threshold governance and wish to grow their influence over critical DAO decisions. Delegates provide ETH addresses to which other Threshold token holders and Threshold stakers can delegate their vote weight. Third-party delegates are subsequently responsible for voting on Threshold governance proposals with this vote weight that others have assigned to them.
Community members who are unsure or uninterested in governance and do not want to actively participate in proposals, discussions, and voting, can instead delegate to active DAO members who have demonstrated a commitment to Threshold. Delegating their vote allows token holders and stakers to have an indirect say in the DAO without being involved in day-to-day governance activities.
There is no compensation for third-party delegate contribution to governance.
The process for delegating liquid tokens and delegating staked tokens is distinct, and each are explained in the following subsections. It's not currently possible to delegate tokens deposited as LP in AMM pools (e.g. Curve), although this is an area for future improvement.