# Lido Finance > The latest news from across the Lido liquid staking ecosystem. Public Ghost content for AI and LLM tooling. This file includes a bounded export of public pages first, then recent public posts. Append `.md` to any post or page URL to get the content in Markdown (for example, `/example-post.md`). ## Pages ### About this site URL: https://blog.lido.fi/about/ Last updated: 2024-09-02T12:55:59.000Z Lido Finance is an independent publication launched in September 2024 by Blog Service Account. If you subscribe today, you'll get full access to the website as well as email newsletters about new content when it's available. Your subscription makes this site possible, and allows Lido Finance to continue to exist. Thank you! ### Access all areas By signing up, you'll get access to the full archive of everything that's been published before and everything that's still to come. Your very own private library. ### Fresh content, delivered Stay up to date with new content sent straight to your inbox! No more worrying about whether you missed something because of a pesky algorithm or news feed. ### Meet people like you Join a community of other subscribers who share the same interests. --- ### Start your own thing Enjoying the experience? Get started for free and set up your very own subscription business using [Ghost](https://ghost.org/?ref=blog.lido.fi), the same platform that powers this website. ## Posts ### Strengthening Ethereum Validator Operations with ValOS URL: https://blog.lido.fi/strengthening-ethereum-validator-operations-with-valos/ Last updated: 2026-09-01T14:06:17.000Z As Ethereum continues to evolve into a global digital infrastructure, the operational integrity of its validator set becomes increasingly important. Secure, resilient, and well-governed validator operations are foundational to Ethereum’s decentralization and long-term network security. As staking participation grows and infrastructure becomes more professionalized, the need for shared, transparent operational standards continues to grow. [ValOS (Validator Operations Standard)](https://www.valos.global/?ref=blog.lido.fi) is a community-driven framework designed to raise the bar for validator operations across the Ethereum staking ecosystem. Its aim is to establish best-in-class standards that enable node operators to manage operational risk effectively, demonstrate accountability, and operate critical infrastructure with transparency and discipline. To enhance its real-world applicability and long-term sustainability, Lido DAO funded the framework development and enablement through LEGO. More information can be found [here](https://research.lido.fi/t/strengthen-d-u-c-k-governance-assurance-and-real-world-adoption/9849?ref=blog.lido.fi). ## **A Framework for Staking Excellence** ValOS provides a structured approach to validator operations, helping node operators identify, assess, and mitigate risks inherent in running Ethereum staking infrastructure. ValOS focuses on principles, controls, and governance processes that can be adapted to a wide range of operator setups, from independent community validators to professional staking providers. By offering a common language and shared expectations, ValOS supports a more resilient and predictable validator landscape. This is essential not only for operators themselves, but also for the broader Ethereum ecosystem, which depends on reliable validator performance to maintain network security and user trust. ## **Open, Community-Led Foundations** ValOS builds directly on the foundations established by the [DUCK initiative](https://research.lido.fi/t/d-u-c-k-distributed-utilization-of-configurations-and-knowledge-proposal/5848?ref=blog.lido.fi), an open effort created to equip Node Operators with practical tools to mitigate real-world operational risks. Through DUCK, contributors from across the staking ecosystem collaborated to develop resources that address the realities of operating complex validator infrastructure. These resources include a comprehensive Risk Framework, a Mitigation & Controls Library, and a Communications Toolkit. Together, they provide Node Operators with actionable guidance for risk assessment, incident response planning, internal controls, and stakeholder communication. Importantly, these tools were designed for immediate use, lowering the barrier for operators to adopt more rigorous operational practices. ValOS formalizes and extends this work by introducing a dedicated organizational and governance structure to support long-term adoption, credibility, and continuous improvement. This evolution is critical for transforming ValOS into a durable standard that can be relied upon across the Ethereum staking ecosystem. ## **Toward Recognised Industry Standards** A key goal of ValOS is to become a recognised assurance and risk management framework for validator operations. Over time, ValOS is intended to support professional audits, assurance reviews, and industry-wide benchmarks for operational excellence in staking. For Node Operators, this provides a credible and transparent way to demonstrate that risks are actively identified, managed, and reviewed. For the broader ecosystem, including stakers, institutional participants, protocols, and DAOs, ValOS offers confidence that validator infrastructure is being operated in line with well-defined standards. By aligning best practices across operators, ValOS aims to reduce systemic risk, improving overall network resilience. This is particularly important as Ethereum’s staking layer continues to scale and attract increasingly diverse participants. ![](https://blog.lido.fi/content/images/2026/08/data-src-image-f4983a0d-543c-4d52-ac95-7a13664776b2.png) ## **Supporting Ethereum’s Long-Term Stability** Ethereum’s security model relies on the collective performance and reliability of its validators. Strengthening operational standards is therefore a core component of preserving Ethereum's decentralization and stability over time. To drive adoption and real-world implementation of ValOS, Lido DAO will allocate $60,000 to the “D.U.C.K. Funding Launch for Audit Participants” (DUCK FLAP) grant pool, through LEGO, to bootstrap the initial assurance reviews. The funds are aimed at supporting early Node Operators adopters by covering up to 50% of the assurance review costs. ValOS will play an important role in supporting Ethereum’s long-term health by encouraging higher standards, better risk management, and greater transparency across the validator ecosystem. By encouraging shared accountability and operational excellence, ValOS ensures that Ethereum’s staking infrastructure can continue to support the network’s growth in a secure and sustainable manner. Learn more about ValOS here: [www.valos.global](https://www.valos.global/?ref=blog.lido.fi) ### LDO Automated Buybacks: Overview URL: https://blog.lido.fi/ldo-automated-buybacks-overview/ Last updated: 2026-08-14T11:59:31.000Z The Lido DAO operates within open strategic cycles, publicly setting goals and appointing the Lido Foundations to deliver them. One of the key goals [set for 2025](https://research.lido.fi/t/hasus-goose-2-submission-a-product-line-approach-to-grow-lido-s-staking-ecosystem/8841?ref=blog.lido.fi#p-18760-ldo-more-than-governance-13) and [continued in 2026](https://research.lido.fi/t/lido-labs-goose-3-lido-s-next-chapter/10927?ref=blog.lido.fi#p-23526-h-311-ldo-tokenomics-alignment-14) was LDO alignment: tying LDO more directly to the Lido protocol’s success. At the core of the LDO alignment initiative sits NEST (Network Economic Support Tokenomics), an onchain mechanism that links protocol revenue to LDO acquisition, financed by DAO treasury surpluses. This article explains the design choices behind the NEST mechanism, how it works, its launch parameters, and the security approach. ## **Automated Buybacks: Design Rationale** The Lido DAO builds its governance mechanisms to the highest standards of transparency, security and decentralization. Protocol upgrades pass through fully onchain votes; Dual Governance gives stETH holders built-in oversight of DAO decisions; routine treasury allocations run through optimistic Easy Track motions. The same approach applies to LDO buybacks. Along the way, the simpler paths were weighed and rejected: - manual monthly buybacks introduce discretionary human intervention; - burning acquired LDO is a one-time signal, not a durable mechanism; - a simple revenue percentage split does not enforce surplus discipline and can activate with no actual treasury surplus. The DAO approved [the technical rails ](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x4267fe277e52a3550e82286af96948a258392ddd303df6b479c4d8f4664acdd0)and [mechanism design](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x022e901a6368573d18b150eecda563dd2ee17ad2aa6a0ef9772151cc7ba55187) to make buybacks transparent, permissionless, and under full DAO control. ## **How NEST Works** NEST is a programmatic system that uses a portion of Lido protocol revenue to acquire LDO, subject to certain thresholds and conditions [specified in LIP-36](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-36.md?ref=blog.lido.fi). In short, when staking revenue exceeds an operating baseline, a bounded share of the surplus is converted into LDO via CoW Swap. The more the protocol earns, the more LDO is bought. ![](https://blog.lido.fi/content/images/2026/08/buybacks-in-red--2-.png) ### **Modes of NEST** As onchain LDO liquidity is relatively shallow, NEST’s buyback mechanism is designed with two modes to optimize performance. In **Treasury-only mode**, the daily allocation converts to LDO in full and flows directly to the DAO treasury via an [Aragon Agent](https://etherscan.io/address/0x3e40D73EB977Dc6a537aF587D48316feE66E9C8c?ref=blog.lido.fi) contract. In **LP mode**, the daily allocation is divided in two: half purchases LDO, and the other half is wrapped into wstETH. Both parts are deposited as DAO-owned liquidity into a Curve v2 NG pool, and the LP tokens remain under DAO ownership. NEST is launched in Treasury mode, as LP mode delivers its benefits only under specific market conditions. The Curve pool is already deployed, so switching to LP mode later will only require an onchain vote. ### **Lido DAO Levers** The NEST mechanism is fully onchain and permissionless. The Lido DAO sets the key parameters and can change them by onchain vote. While at launch NEST tracks Lido protocol staking revenue only, its architecture is designed to accommodate additional revenue sources through future governance votes, with Lido's expanding product line in mind. ## **NEST Parameters** At launch, the NEST configuration approved by the DAO is: - **Revenue baseline**: $40M annualized (\~$109K/day) - **Surplus share**: 50% of daily surplus routed to NEST - **Daily cap**: $50,000 - **Annual cap**: $10M (rolling 365-day ceiling) - **Pool price-drift limit**: 2% on LP deposits (dormant at launch) - **Execution**: daily, permissionless, via CoW Swap using Stonks v2 - **Accounting**: cumulative across time, not day-by-day Each day, NEST compares the DAO's share of staking revenue against the revenue baseline. Then it adds 50% of the difference (the share set at launch) to a running NEST balance. While that balance is positive, NEST buys LDO daily within the specified caps. If the balance turns negative, purchases pause until new surplus restores it. ![](https://blog.lido.fi/content/images/2026/08/data-src-image-df858a80-4070-486d-9584-b3e1c1403ca8.png) The cumulative model was chosen to prevent the two failure modes of a daily-spend approach: overspending during consecutive good days and the inability to carry forward unused capacity. The $50,000 daily cap is the primary safety guardrail, bounding exposure over a six-day governance response window to approximately $300,000\. [Backtesting on 2024–2025 revenue](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894/100?ref=blog.lido.fi) showed the model would have delivered $7.09M, exactly its target spend, from $94.18M in total rewards. Full calculations and the comparison against alternative designs are documented in[ LIP-36](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-36.md?ref=blog.lido.fi) and [the Research forum discussion](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894/100?ref=blog.lido.fi). All parameter values are adjustable through a full DAO vote, so the DAO can tune them as protocol economics evolve. ## **Mitigating Risks** A programmatic mechanism that spends treasury assets daily introduces specific risks. This is how the mechanism's design addresses each: - **Discretionary error.** NEST mechanisms run solely on parameters approved by DAO vote, and said parameters are the only ones that determine the buyback. Changing parameters requires a DAO vote. - **Parameter manipulation.** All parameter changes (baseline, caps, surplus share, divergence tolerance, mode) require a full onchain vote. Easy Track is used only to fund the BuybackAllocator with stETH, never to modify configuration. - **Oracle, pool sandwiching, or price feed corruption.** The daily cap bounds maximum exposure during a corrupted-oracle scenario [to approximately $300,000 ](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894/99?ref=blog.lido.fi#p-25327-emergency-controls-13)over a six-day governance response window. OracleRouter price queries [can be paused independently](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-36.md?ref=blog.lido.fi#emergency-controls), per token. In LP mode, [a 2% price-drift limit](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-36.md?ref=blog.lido.fi#pool-skew-protection) blocks Curve deposits when the pool's internal EMA drifts from the OracleRouter reference price. - **Slashing or revenue shock.** The revenue source records zero until the protocol has fully recovered, so buybacks naturally pause without governance action. There is no manual reset lever: a negative balance recovers as surplus returns. The DAO can speed that up by raising the surplus share or lowering the baseline through an onchain vote. - **Operational incidents and keeper failure.** Three independent pause domains cover the system: the BuybackExecutor, Stonks order creation and settlement, and individual OracleRouter price feeds. Each can be stopped [by the Emergency Brakes multisig](https://docs.lido.fi/multisigs/emergency-brakes/?ref=blog.lido.fi#12-emergency-brakes-ethereum) or [the Treasury Management Committee](https://docs.lido.fi/multisigs/committees/?ref=blog.lido.fi#25-treasury-management-committee) without affecting the others. Daily execution itself is permissionless, so the mechanism does not depend on any specific keeper. Asset recovery remains available at all times through an onchain DAO vote. All NEST-purchased assets remain DAO-owned, and any movement outside the mechanism’s defined operational paths requires explicit DAO authorization. ## **LDO Accumulation Program Note** NEST should not be confused with the LDO Accumulation Program, a separate one-time treasury operation that the Lido DAO [approved on 13 April 2026](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x43be9ee8ce820d444f706e9dd763a223ebabf37be27931cc056888e6c2e48814). That program is a discretionary, committee-executed initiative rather than a structural mechanism, and is unrelated to NEST in design and governance. Batch parameters, execution updates, and further detail are published [on the Research forum](https://research.lido.fi/t/utilizing-market-opportunities-steth-ldo-trade/11358?ref=blog.lido.fi). ## **Further Reading** - [NEST Technical rails proposal](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x4267fe277e52a3550e82286af96948a258392ddd303df6b479c4d8f4664acdd0) - [NEST Automated LDO Buyback](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x022e901a6368573d18b150eecda563dd2ee17ad2aa6a0ef9772151cc7ba55187) Proposal - [LIP-36: NEST specification](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-36.md?ref=blog.lido.fi) ### Sharplink Selects Lido for $200 Million ETH Staking Allocation URL: https://blog.lido.fi/sharplink-selects-lido-for-200-million-eth-staking-allocation/ Last updated: 2026-08-14T10:29:03.000Z One of the largest corporate holders of ETH is putting wstETH on its balance sheet, custodied with Anchorage Digital. [Sharplink](https://www.sharplink.com/?ref=blog.lido.fi) (Nasdaq: SBET), one of the world's largest corporate holders of Ether ("ETH") and prominent industry advocate of Ethereum adoption, is deploying $200 million of its ETH treasury to staking through the Lido protocol. Sharplink will receive wstETH in return, and the staked ETH will be held in custody with Anchorage Digital. The allocation follows Anchorage Digital's [integration of wstETH last month](https://blog.lido.fi/anchorage-digital-expands-us-institutional-access-to-wsteth/), which opened access to Lido liquid staking for institutions custodying with the first federally chartered crypto bank in the US. It continues Sharplink's push this year to make its ETH treasury more productive for shareholders. ****Joseph Chalom, Chief Executive Officer, Sharplink** "This is an exciting expansion in making our ETH even more productive, leveraging wstETH’s composability while maintaining institutional-grade risk standards. Adding a staking protocol of Lido's caliber deepens the diversification of our treasury strategy and gives us access to one of the most liquid and widely integrated assets in Ethereum DeFi. It reflects our commitment to working with the top Ethereum protocols.” ## **The Choice Facing ETH Treasuries** Public companies are moving from simply holding ETH to staking it, and [over a third of all ETH is now staked](https://dune.com/hildobby/eth2-staking?ref=blog.lido.fi). Staking natively means waiting out Ethereum's validator entry queue. With ETH staked via Lido, rewards accrue from day one, and the wstETH held can be redeemed using the Lido withdrawal process, sold, or posted as collateral. ****Kean Gilbert, Head of Institutional Relations, Lido Ecosystem Foundation** *.* "We're seeing a clear shift in how institutions hold Ethereum, and Sharplink's allocation is a strong example. Treasuries want their ETH working for them without losing liquidity, and Lido has become the standard for doing it at scale. With wstETH, a holder of this size can stake while keeping the flexibility its strategy demands." ## **stETH at Scale** Institutions need to know they can move a position at size, use it while it is staked, and that risks have been assessed independently. That scale is reflected in the roughly $16.5 billion of ETH staked via Lido. stETH is integrated across more than 100 protocols, with around $10 billion in active use as collateral. For longterm holders, this means wstETH can be used in DeFi while the underlying ETH continues earning staking rewards, putting committed capital to work without selling it. ****Vasiliy Shapovalov, Executive Director, Lido Labs Foundation** "I'm excited to see Sharplink increasing the use of Ethereum native staking protocols and the DeFi ecosystem. Being bullish ETH is being bullish on major Ethereum-based applications." Lido holds A+ ratings from the independent frameworks [Staking Rewards](https://www.stakingrewards.com/defi/0xae7ab96520de3a18e5e111b5eaab095312d7fe84?ref=blog.lido.fi) and [Credora](https://www.linkedin.com/pulse/steth-receives-rating-how-credora-built-first-asset-level-5fmbf/?ref=blog.lido.fi), and [Lido is Web3SOC certified](https://blog.lido.fi/lido-receives-web3soc-certification-for-institutional-defi-diligence/) by the security firm Cantina, following a review of its governance, financial resilience, security and compliance. --- ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. Learn more at [lido.fi/institutional](https://lido.fi/institutional?ref=blog.lido.fi). ### **About Sharplink, Inc.** Sharplink (NASDAQ: SBET) is a leading institutional-grade Ethereum treasury platform designed to give public market investors smarter, more productive exposure to ETH. Ethereum underpins the majority of global stablecoin, tokenized real-world assets and decentralized finance settlement. Sharplink was founded in 2019 and is headquartered in Miami, Florida. Learn more at [sharplink.com](http://sharplink.com/?ref=blog.lido.fi). ### A New Lido Core Upgrade for Protocol Sustainability and a Leaner Ethereum URL: https://blog.lido.fi/a-new-lido-core-upgrade-for-protocol-sustainability-and-a-leaner-ethereum/ Last updated: 2026-07-27T14:55:19.000Z ## **TLDR:** Lido Core continues to evolve alongside Ethereum. This upgrade introduces major improvements across its staking modules, strengthening protocol health and sustainability, improving alignment with Ethereum's roadmap, while advancing decentralization that benefits both Lido and the broader ecosystem. - **Curated Module v2** introduces native support for 0x02 validators, bonding and penalty mechanisms, operator classification, and streamlined governance. It will gradually replace the legacy Curated Module as stake migrates to the new module. - **Community Staking Module** expands permissionless participation with the new Identified DVT Cluster (IDVTC) operator type, alongside technical improvements that make the module more reliable and operator-friendly. - **Simple DVT Module** refines to improve its long-term economic and operational sustainability. No action is required from stakers. The upgrade is handled entirely at the protocol level. ## About Lido Core Lido Core is the main liquid staking infrastructure of the Lido protocol, where user-deposited ETH is algorithmically allocated to validators run by a diverse set of both permissioned and permissionless Node Operators (NO) through various Staking Modules. The term was established to distinguish the protocol’s foundational architectureーa single pooled modelーfrom new modular staking primitives (stVaults) launched as a part of [Lido V3](https://blog.lido.fi/lido-v3-is-live-modular-infrastructure-for-a-new-paradigm-of-ethereum-staking/). ![](https://blog.lido.fi/content/images/2026/07/2.-Izzy---s-quote--s-.png) [Isidoros Passadis](https://x.com/IsdrsP?ref=blog.lido.fi), Chief of Staking at Lido Labs Foundation ## Curated Module v2: Evolving the Largest Lido Staking Module The Curated Module has been the cornerstone of the Lido validator set since the protocol launched in 2020, securing around 90% of all staked ETH in Lido Core as at July 2026\. As Ethereum staking continues to evolve, Lido contributors continue advancing the modules to keep Lido Core aligned with Ethereum's roadmap while ensuring long-term protocol sustainability. Curated Module v2 (CMv2) is the next major step in that evolution, introducing the market-driven operator economics framework, streamlined operations, new mechanisms and dedicated Node Operator types that empower operators to strengthen Ethereum's decentralization. To ensure smooth adoption the new module will be introduced in two phases: - **Phase 1**: Core structural changes, including native 0x02 validators support, operator classification and improved incentive alignment, bond-based security and penalty mechanisms, and lower governance friction. - **Phase 2**: Flexible stake distribution mechanism, custom fees, and a strike system. ### 0x02 Native Support The Pectra upgrade introduced 0x02 Withdrawal Credentials (WC) and consolidations, enabling validators to increase their maximum effective balance from 32 ETH to 2,048 ETH. The Lido protocol initially introduced 0x02 with the launch of stVaults in December 2025\. Learn more about this novel modular staking primitive [here](https://lido.fi/stvaults?ref=blog.lido.fi). Now, Curated Module v2 brings that capability to Lido Core largest staking module. This enables the migration of more than 265,000 existing Curated Module validators from legacy 0x01 WC to 0x02 through validator consolidations. Curated validator migration will nearly double the share of ETH secured by compounding validators, increasing it from 32.06% to 52.21%. At the same time, it will reduce the total number of validators across the Ethereum network by roughly one third, from approximately 880,000 at the time of writing to \~628,000 post consolidations (not accounting for new validators that may join the network, or other consolidations). By reducing the number of validators, this migration is expected to meaningfully lower network congestion and Consensus Layer overhead specifically, while further aligning the Lido protocol with Ethereum's roadmap. Once completed, it should bring down the number of [attestation](https://ethereum.org/developers/docs/consensus-mechanisms/pos/attestations/?ref=blog.lido.fi#what-is-an-attestation) messages across the network by approximately 29% each epoch. ![](https://blog.lido.fi/content/images/2026/07/3.-Curated-stake-migration-and-consolidation--s-.png) ### Node Operator Types Rather than applying a one-size-fits-all model, CMv2 introduces operator classification that better reflects the diversity of Curated Node Operators. The new [Node Operator Type Framework](https://research.lido.fi/t/node-operator-type-assessment-framework-cmv2/11477?ref=blog.lido.fi) enables recognition of different levels of contribution to protocol growth, infrastructure resilience, Ethereum public goods and decentralization. These types include: - **Decentralization Operators** — entities that run Ethereum nodes across underrepresented geographies and diverse infrastructure and client combinations; - **Extra Effort Operators** — operators contributing additional value to the protocol beyond validator operations: through capital participation, service roles (such as the Lido Oracle or Deposit Security Committee), and governance alignment through LDO holdings and voting activity. - **Public Good Operators** — entities meaningfully involved in building and maintaining core Ethereum Consensus and Execution Layers (CL and EL) client software. These contributions are now reflected in the Curated Module v2 incentive structure, helping ensure that both the Lido protocol and Ethereum continue to thrive together. ![](https://blog.lido.fi/content/images/2026/07/4.-CMv2-NO-types--s-.png) This framework formalizes an approach Lido DAO has been following for years, supporting Ethereum client teams and public-good builders through participation in the Curated Module and LEGO grants. To help sustain development of CL and EL clients, seven client teams were onboarded as Curated Node Operators. As of July 1, 2026, they have collectively received 8,710 stETH (\~$21 million) in cumulative rewards for operating validators on behalf of Lido stakers. ![](https://blog.lido.fi/content/images/2026/07/5.-Ethereum-Client-Teams-stETH-Rewards--s-.png) Beyond CL and EL development support, improving client, geographic, and infrastructure diversity has remained a sustained focus for contributors and Node Operators since the Merge. Coordinated efforts have steadily reduced the protocol’s reliance on any single client, geographic region, or cloud provider, contributing to a more resilient and decentralized Ethereum network. By fostering balanced usage, Lido continues to strengthen Ethereum’s overall health and network resilience. Explore the [Validator and Node Operator Metrics (VaNOM)](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/VaNOM-Lido-on-Ethereum-Validator-Node-metrics-1vnpSDa7PtbyA6HX0bVNj1/latest?ref=blog.lido.fi) dashboard, which provides a detailed view of the progress made over the past five years. ### Bonding And Penalty Mechanisms The legacy Curated Module was built on trust, relying on operator reputation as a primary guarantee of alignment and reliability. Curated Node Operators were expected to perform to a high standard and compensate stakers and the protocol if losses arose. As the staking ecosystem matures, Curated Module v2 advances this alignment by introducing [ETH-backed bonding](https://research.lido.fi/t/future-of-the-curated-module-cmv2-landscape/10929/16?ref=blog.lido.fi#p-24792-h-2-bond-6) and [Penalty Framework](https://research.lido.fi/t/penalty-framework-cmv2/11732?ref=blog.lido.fi) that enable coverage in cases of operator underperformance, operational downtime, slashing, or EL rewards violations. Rather than replacing the existing reputation-based model, CMv2 complements it with new bond-based security and accountability mechanisms, better aligning operators’ behavior with stakers and strengthening Lido Core robustness. ### Streamlined Governance And Simplified NO Management The current CM design requires on-chain votes even for routine administrative changes, such as updating an operator address. This increases operational overhead and can delay responses to time-sensitive matters. Curated Module v2 streamlines governance by permissioning routine operational updates and administrative tasks to Node Operators and the [Curated Module Committee (CMC)](https://research.lido.fi/t/proposal-transition-the-lnosg-into-the-cmc/11341?ref=blog.lido.fi#p-24720-the-curated-module-committee-cmc-3) respectively. The DAO retains authority over the composition of the Node Operator set and parameters related to Node Operators and can override or veto changes when necessary. This approach reduces DAO overhead and reliance on off-chain coordination, while maintaining the security and oversight. ![](https://blog.lido.fi/content/images/2026/07/6.-Sasha---s-quote--s-.png) [Aleksandra Gusakova](https://x.com/sasha%5Fgusakova?ref=blog.lido.fi), Lido Core Product Lead at Lido Labs Foundation ## Lido CSM v3 Following 1.5 years of real-world battle-testing, the Community Staking Module has proven itself as a highly scalable and reliable permissionless staking avenue. Today, it stands as the largest alternative to vanilla solo staking in the ecosystem, securing over 770,000 staked ETH across estimated 335 active operators, representing roughly 8.5% of Lido TVL and 1.9% of the total network stake. However, the evolution of Lido’s permissionless staking continues. As part of the Lido Core upgrade, CSM is evolving to become even more resilient and operator-friendly. Alongside several under-the-hood technical optimizations, here are the primary new features that CSM v3 brings to permissionless operators: - [**Identified DVT Clusters (IDVTC)**](https://csm.lido.fi/type/idvtc-description?ref=blog.lido.fi)**:** This new Node Operator type creates a third pathway alongside the default and [Identified Community Staker](https://blog.lido.fi/unlock-exclusive-benefits-as-an-identified-community-staker/) (ICS) options to utilize CSM. IDVTC empowers independent community stakers to run distributed validators via Obol or SSV using the most optimized parameters available in CSM to date: - **Bond Requirements:** A low 1.5 - 0.5 ETH bond per key. - **Estimated Capital Efficiency:** Up to 3.1x compared to solo staking. To learn more about IDVTC and compare all available options, check out [lido.fi/csm](https://lido.fi/csm?ref=blog.lido.fi). ![](https://blog.lido.fi/content/images/2026/07/7.-CSM-Participation-Paths-vs.-Solo-Staking--s--1.png) - **Native Node Operator Reward Splitting:** Node Operators can now configure multiple destination addresses to receive rewards, each with customized proportions. This native splitter provides a seamless experience for operators who need to distribute rewards across various individuals or entities. For example, a group running validators as an IDVTC can now manage reward allocations to individual cluster members directly via the CSM widget. - **Agile Governance for Permissionless Staking Share Limit:** To allow the protocol to promptly react to market demand and scale permissionless staking capacity, traditional Aragon governance has been replaced with Easy Track. This enables faster increases to the module’s staking share limit. ## Simple DVT Module: What's Changing Following the recent [Snapshot vote](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x6ab9651fba999ba29ba780fe61d68cc23e7aeb83c841181c5c1933dec9197f37), the 72 regular clusters in the Simple DVT Module (SDVTM) have been wound down. The Simple DVT Module played a pivotal role in advancing Distributed Validator Technology (DVT) adoption across both Lido and the broader Ethereum ecosystem. It allowed significant expansion of the number of participating Node Operators in Lido Core by more than 300, making Lido's validator set substantially more diverse and decentralized. Operators from the wound-down clusters have a pathway to continue validating through Lido through the Community Staking Module (CSM) in one of three ways: 1. **Default** **permissionless path**. 2. **ICS:** Existing SDVTM solo and community stakers are eligible to claim ICS status if they choose to continue as solo operators. 3. **IDVTC**: Regular cluster participants, wishing to continue running DVT, can form new clusters. Compared with the Simple DVT cluster model, this approach allows operators to self-organize, and, in certain configurations, receive more favorable economic incentives than other CSM operator types. On top of this, the Lido DAO approved a grant framework to recognize the contributions of operators that participated within the Simple DVT regular clusters. Grant details can be found in the [Research Forum post](https://research.lido.fi/t/proposal-wind-down-the-simple-dvt-module-regular-clusters/11571?ref=blog.lido.fi#p-25444-grant-framework-3). ### Super Clusters Super Clusters, which consist of Advanced Node Operators and members of the Curated Module running larger validator sets, are not affected by this change. They continue operating as planned until the originally approved wind-down date. Their longer-term future, including a potential migration to another staking module or an earlier wind-down, will be evaluated separately based on market conditions and future governance decisions. ## What's Next The new Curated Module v2 is now live, and the stake migration from the legacy Curated Module will start soon. Given the current Ethereum activation queue of more than 40 days, this process will take time. The CM will remain available as a fallback and will gradually be wound down as stake migrates to CMv2. The Identified DVT Clusters operator type is also live, and the first eligible operators can claim the type. Applications for the next IDVTC assessment round close on September 21, while applications for the Identified Community Staker status close on September 7, giving prospective operators time to prepare their applications and cluster formation. Apply for ICS and IDVTC [here](https://csm.lido.fi/type?ref=blog.lido.fi). For all upcoming application deadlines through the end of 2026, see the [full assessment calendar on the Research Forum](https://research.lido.fi/t/community-staking-module/5917/212?ref=blog.lido.fi). ### Looking Ahead - **Curated Module v2: Phase 2**. With the foundations now in place, Lido contributors will continue preparing the second phase of CMv2\. It will introduce mechanisms that move Lido closer to a market-driven staking model, where stake can flow dynamically between Node Operators based on transparent parameters such as fees, performance, and contributions to the ecosystem. Follow the [discussion on the Research Forum](https://research.lido.fi/t/future-of-the-curated-module-cmv2-landscape/10929?ref=blog.lido.fi) to stay up to date with the latest proposals and development progress. - **0x02 CSM**.While this specific upgrade does not introduce permissionless 0x02 validator support within the current iteration of the CSM, the v3 codebase natively supports the credential type. The Lido DAO has [approved the launch of a dedicated module](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0xed2a3b1f796cefdd531abe14ba01363b2da7887434cefdd54ba71ffb6dff59a7) (0x02 CSM), targeted for Q4 2026, designed specifically to enable permissionless node operators using 0x02 withdrawal credentials. This new module will run alongside the existing CSM instance, offering operators full flexibility to choose their preference. To dive deeper into the solution, read the full[ 0x02 CSM Landscape](https://research.lido.fi/t/0x02-csm-landscape/11697?ref=blog.lido.fi). ### stVaults Digest: May-June 2026 URL: https://blog.lido.fi/stvaults-monthly-updates-may-june-2026/ Last updated: 2026-07-09T10:21:45.000Z [stVaults](https://lido.fi/stvaults?ref=blog.lido.fi) are Lido V3's new staking primitive, offering modular staking infrastructure with optional stETH minting. This article covers recent updates across stVaults and its Web UI: new products built on the platform, new features, and new custodian guides. --- ## **Entry Queue Status** The Ethereum validator entry queue kept growing through May, passing 60 days late in the month, before easing to an average of 50 days in June. ![](https://blog.lido.fi/content/images/2026/07/2889--1-.png) If you want to migrate to stVaults while avoiding the entry queue, consider [validator consolidation](https://blog.lido.fi/validator-consolidation-a-capital-efficient-way-to-migrate-to-stvaults/). Source validators keep accruing rewards throughout the migration, and after consolidation, stakers can access stETH, which unlocks DeFi composability, enhanced rewards, and liquidity for large staking positions. As a bonus, the stVaults [infra fee waiver has been extended through the end of August](https://research.lido.fi/t/default-risk-assessment-framework-and-fees-parameters-for-lido-v3-stvaults/10504/8?ref=blog.lido.fi). --- ## **Products Overview Hub** The[ stVaults Products Overview](https://lido.fi/stvaults-products-overview?ref=blog.lido.fi) is growing, with new products and use-cases built on the platform: - [Luganodes stVaults](https://lido.fi/stvaults-products-overview/luganodes-stvaults?ref=blog.lido.fi): isolated, non-custodial vaults for institutions, operated by Luganodes, with configuration under the client’s control. Full story [in the Lido blog](https://blog.lido.fi/lido-v3-luganodes-expanding-institutional-ethereum-staking-with-stvaults/). - [Nansen ETH Vault](https://lido.fi/stvaults-products-overview/nansen-eth-vault?ref=blog.lido.fi): stake ETH directly to Nansen-operated validators and earn staking rewards, with transparency into the validator operator. More details covered [in the blog](https://blog.lido.fi/lido-v3-nansen-transparent-ethereum-staking-with-stvaults/). - Pro-Delegators by Nuxian Labs: two products,[ Ethereum Staking](https://lido.fi/stvaults-products-overview/prodelegators-ethereum-staking?ref=blog.lido.fi) and[ Liquid Staking 90%](https://lido.fi/stvaults-products-overview/prodelegators-liquid-staking?ref=blog.lido.fi), both built and operated by the Pro-Delegators team. - Linea [Yield Boost](https://lido.fi/stvaults-products-overview/linea-yield-boost?ref=blog.lido.fi), built by the Linea Consortium with Consensys Staking as Node Operator: ETH bridged to Linea is partially staked on Ethereum mainnet through Lido V3, with staking rewards funding ecosystem incentives rather than treasury emissions. Users keep full custody and the same withdrawal guarantees. See all featured products on the[ Products Overview page](https://lido.fi/stvaults-products-overview?ref=blog.lido.fi). To get your vault featured on the hub, reach out to the team: - [For technical details](https://tally.so/r/NpWWeN?ref=blog.lido.fi) - [For marketing details](https://tally.so/r/dW9ldq?ref=blog.lido.fi) --- ## **stVaults Web UI** The stVaults Web UI gives vault builders and owners a simple, well-instrumented interface to set up and monitor their vaults. Recently, the stVaults team shipped several additions. ### **Anti-scam protections for stakers** The Web UI now warns stakers about risky transactions and blocks certain operations if the stVault setup would allow third-party actors to scam stakers. ### **Settling Lido fees in the UI** Lido fees need to be settled before performing certain actions with an stVault. Settlement is permissionless, so Vault Owners and Node Operators can now review and settle fees directly from the Web UI, without dropping to the CLI. ![](https://blog.lido.fi/content/images/2026/07/2891--1-.png) ### **Rebalancing in the web UI** The Lido stVaults Web UI now supports rebalancing: repaying stETH liability using ETH from the vault's own balance. For institutions, rebalancing simplifies the redemption fulfillment process. After a redemption request is fulfilled by minting stETH from the stVault and swapping it for ETH, the resulting stETH liability can be covered by rebalancing the position through the web interface. Previously, this required using the command-line interface or interacting with the smart contracts directly. With the update, vault owners can perform the operation themselves, within their usual approval and custody setup. ![](https://blog.lido.fi/content/images/2026/07/rebalancing--1-.png) --- ## **stVaults Doc Center** More custodian guides landed in the[ Doc Center](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi). - [Cactus Custody](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/cactus/?ref=blog.lido.fi): a new user guide covers how Cactus Custody clients create and manage stVaults through Cactus Link, the custodian’s DeFi connector, from an existing custody account. More context is covered in [the blog](https://blog.lido.fi/lido-v3-cactus-accessing-stvaults-via-cactus-link/). The[ Qualified Custodians overview](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi#whitelisting-smart-contract-addresses) now also lists the stVaults smart-contract addresses that need to be whitelisted before interacting, collected in one place. --- *Want to talk through stVaults for your vault, your product, or your roadmap?*[ *Get in touch*](https://tally.so/r/mVrkZa?ref=blog.lido.fi)*.* ### Anchorage Digital Expands U.S. Institutional Access to Lido’s wstETH URL: https://blog.lido.fi/anchorage-digital-expands-us-institutional-access-to-wsteth/ Last updated: 2026-07-02T12:54:04.000Z **Anchorage Digital clients can now access wstETH through the platform they already use for custody, staking, and settlement.** --- [Anchorage Digital](https://www.anchorage.com/?ref=blog.lido.fi) has integrated Lido liquid staking into its institutional platform, giving customers access to wstETH within one of the most established digital asset custody environments in the U.S. For institutional ETH holders, access is often the deciding factor. Many asset managers, hedge funds, corporate and protocol treasuries, and ETF issuers already understand the case for Ethereum staking. The harder question is whether staking can fit existing custody, governance, reporting, and settlement requirements. Anchorage Digital is relevant in that context because it is home to the first federally chartered crypto bank in the US, with infrastructure built around the policy and control needs of institutional clients. The integration gives Anchorage Digital clients access to [wstETH](https://help.lido.fi/en/articles/5231836-what-is-lido-s-wsteth?ref=blog.lido.fi), the non-rebasing wrapped form of stETH. Balances remain fixed, with staking rewards reflected through the token’s exchange rate relative to stETH. That structure fits cleanly with institutional custody and accounting workflows, and makes wstETH easier to integrate across DeFi and institutional platforms that do not support rebasing tokens. ****Nathan McCauley, Co-Founder & CEO at Anchorage Digital** "Liquid staking has become one of the most important building blocks for institutional participation in Ethereum. By integrating with Lido, we're giving institutions access to wstETH without the operational or security tradeoffs that have historically kept large allocators on the sidelines. It's another step in making advanced onchain infrastructure institution-grade." [stETH is the market-leading liquid staking token on Ethereum](https://dune.com/lido/lido-morning-coffee-dashboard?ref=blog.lido.fi), with the deepest liquidity and the widest integration footprint in the category. It represents ETH staked through the Lido protocol across a distributed set of 900+ node operators, and is integrated across major DeFi and institutional venues. It is also the underlying asset for regulated products in Europe, including [WisdomTree’s 100% staked stETH ETP](https://blog.lido.fi/wisdomtree-launches-first-fully-staked-eth-etp-backed-by-steth/). That combination of scale, liquidity, and integration depth has made stETH a reference point for how institutions hold Ethereum staking exposure, use it as collateral, and incorporate it into broader portfolio strategies. ****Kean Gilbert, Head of Institutional Relations at Lido Ecosystem Foundation** “Institutional adoption depends on whether access fits the way institutions actually operate. Anchorage Digital’s integration brings wstETH into an important US institutional platform and strengthens the role of stETH and the Lido protocol in institutional Ethereum staking.” The Anchorage Digital integration extends that institutional footprint into another important U.S. access point. It follows a broader pattern: ETF issuers are building products backed by staked ETH, treasury holders are moving [from passive ETH balances into staked positions](https://blog.lido.fi/what-the-enterprise-ethereum-alliance-treasury-deployment-signals-for-institutional-staking/), and custodian support for stETH and wstETH continues to widen across major jurisdictions. For institutions evaluating liquid staking, Anchorage Digital now offers access to the market-leading liquid staking token through a U.S. platform built for institutional custody, staking, and settlement. --- To learn more about institutional access to stETH and wstETH, [speak with the Lido Institutional team](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi). ### stETH Liquidity Held Its Ground During the KelpDAO Stress Event URL: https://blog.lido.fi/steth-liquidity-held-ground-during-stress-event/ Last updated: 2026-06-24T12:56:37.000Z **A major external shock tested ETH-denominated liquidity. stETH pricing moved, market depth got more expensive, but the core asset remained functional and resilient.** --- The April 2026 KelpDAO rsETH exploit was a significant external shock to restaking and ETH-denominated lending markets. This article focuses on secondary-market stETH and wstETH pricing/liquidity during the KelpDAO incident. It does not assess user outcomes in KelpDAO or EarnETH. The core point is narrower: stETH and wstETH were not the compromised asset path, and market data showed resilience under a significant external shock. --- ## **A large external shock, clearly bounded** **On April 18, 2026, attackers exploited KelpDAO’s LayerZero-based rsETH bridge path.** Public post incident analysis described the event as a cross-chain verification failure: approximately 116,500 rsETH, worth roughly $292 million, was released on Ethereum without a matching source-chain burn. The immediate stress channel was restaking collateral and lending-market exposure, not Lido core staking. **That distinction matters.** stETH and wstETH were not directly affected by the KelpDAO incident. Lido internal protocol mechanics functioned exactly as intended and these mechanics did not at all contribute to the market volatility that followed. The protocol also processed one of the largest periods of net outflows in its history. Markets still repriced risk, but participants could distinguish between a failure in a specific cross-chain restaking asset path and the liquidity profile of stETH as Ethereum’s largest liquid staking token. stETH pricing moved, then recovered toward normal levels. During the April 18 to 28 stress window, Curve main-pool daily VWAP reached a low of approximately 0.9941 ETH per stETH, or about -59 bps versus parity. CoinGecko aggregate stETH/ETH pricing reached a comparable low of approximately 0.9934\. By May 20, Curve VWAP was back near parity at 0.99980, with CoinGecko at 1.00008. ![](https://blog.lido.fi/content/images/2026/06/data-src-image-71e47d6c-4ed6-4e63-bfd2-f1b8b7220711.png) *Figure 1\. stETH/ETH pricing and Curve main-pool TVL. Curve main-pool VWAP is compared with CoinGecko aggregate stETH/ETH pricing; pool TVL and balances are shown below. Sources: Dune and CoinGecko API.* | Additional context: how to read Figure 1The top panel compares market pricing from the main Curve stETH:ETH pool with CoinGecko’s aggregate stETH/ETH price. The lower panel shows the Curve pool’s ETH and stETH balances and TVL. The chart is meant to show both price behavior and the liquidity base behind that price. | | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- ## **Liquidity depth remained actionable at $1 million notional** **Headline prices can look stable even when execution quality deteriorates. For that reason, liquidity depth is the more useful stress metric.** For a $1 million fixed-sell wstETH quote on Ethereum mainnet, the median daily quote impact across 236 observations was -1.6 bps. In the 30 days before the exploit, the median was -0.1 bps. During the 10-day stress window, the median moved to -5.0 bps, and the 7-day moving average reached a trough of -15.9 bps. **That was a real increase in execution cost, but not a disappearance of liquidity.** For a major external exploit affecting restaking collateral and lending-market utilization, wstETH/ETH execution remained measurable, routable, and interpretable. ![](https://blog.lido.fi/content/images/2026/06/data-src-image-9cf9621f-44ae-4e54-8226-f3e50348cc63.png) *Figure 2\. Quote impact for a $1m fixed-sell wstETH quote on Ethereum mainnet, shown as a 7-day moving average across the full Dune query date range. Source: Lido Dune query 5965996 / 9625248.* | Additional context: chart methodologyFigure 2 uses the $1,000,000 fixed-sell wstETH quote series from the Lido Dune liquidity-depth query at [​​https://dune.com/lido/wsteth-and-steth-depth-on-cow-swap](https://dune.com/lido/wsteth-and-steth-depth-on-cow-swap?ref=blog.lido.fi). The chart shows a 7-day moving average across the full available date range and excludes all other notional levels. | | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- ## **Why stETH remained comparatively resilient** - Broad venue distribution: stETH and wstETH liquidity is not confined to one pool or one route. Curve is central, but aggregators, RFQ systems, lending venues, market makers, and institutional routing infrastructure all contribute to execution depth. - Clear risk boundaries: the incident centered on rsETH cross-chain accounting and lending collateral, not the stETH/wstETH asset path. - Transparent on-chain data: pool balances, DEX trades, routing depth, and secondary prices can be monitored in real time, supporting arbitrage and faster normalization. - Persistent ETH-denominated demand: stETH remains one of DeFi’s most recognized ETH staking collateral assets, with integrations that support both holding and swapping demand. --- ## **The takeaway: resilience where it matters** **The KelpDAO incident showed why liquidity must be evaluated under stress, not only in normal conditions.** For stETH, the April event showed that deep secondary markets, transparent on-chain pricing, and wide ecosystem integration can absorb a severe external shock without compromising the core staking asset. Pricing moved. Execution cost rose. The market remained functional. The outcome reflects years of liquidity building around stETH as a foundational Ethereum asset, and it remains a core advantage for users, integrators, and protocols that need staking collateral to be useful not just in quiet markets, but when markets are under pressure. --- | Sources and dataDune query 5965996 / 9625248 for wstETH/ETH liquidity depth; Dune queries 5596727 and 710202 plus CoinGecko API for stETH/ETH pricing. Data pulled May 20, 2026. | | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ### Lido Multichain: Network Support Changes (June 2026) URL: https://blog.lido.fi/lido-multichain-update-june-2026/ Last updated: 2026-06-23T10:44:06.000Z Following a Lido DAO Snapshot vote, the canonical status of wstETH bridge endpoints has been revoked on nine networks: zkSync Era, Mode, Scroll, Mantle, Swell, Zircuit, Soneium, Polygon PoS, and Lisk. If you hold wstETH on any of these networks, your funds are safe and no action is required. Revocation is a governance decision about where Lido concentrates its resources. It does not disable any bridge, invalidate any token, or affect your ability to hold, transfer, or bridge wstETH back to Ethereum. This article explains what canonical recognition is, what its revocation means for you, why these changes were made, and what to expect going forward. ## **What is Canonical Recognition?** When a bridge endpoint is formally recognized as canonical through Lido DAO governance, that bridge and token contract are identified as the official wstETH deployment on a given network. Recognition is more than a label: it comes with active monitoring, security oversight, incident response, integration support, and ongoing communication from Lido contributors. Maintaining that level of support across many networks requires meaningful resources. Through governance, the DAO has decided to concentrate those resources on networks where wstETH is seeing meaningful adoption. ## **What Does Revocation Mean For Stakers?** Any wstETH on the affected networks remains fully accessible. You can continue to hold it, transfer it, or bridge it back to Ethereum at any time, using the same infrastructure as before. Revocation of canonical status is a governance decision, not a technical one. It does not disable any bridge contract, invalidate any token, or change how the underlying contracts function. If you hold wstETH on any affected network, no action is required. If you'd prefer, you can bridge your wstETH back to Ethereum or to a network that retains canonical support. This is entirely optional, and there is no deadline to do so. *One thing to note: if your wstETH is deployed in third-party DeFi protocols (lending markets, liquidity pools, and so on) on these networks, those positions are governed by those protocols, not by Lido contributors. They are not directly affected by this vote, but Lido contributors will no longer monitor or support wstETH on these chains, so you may wish to review such positions yourself.* ## **Why Is This Happening?** As the Lido Multichain program matures, canonical recognition is being focused on networks where wstETH demonstrates meaningful adoption. For one or more of the following reasons, the networks listed above no longer meet that threshold: - The chain is being sunset, or its bridge infrastructure is being deprecated - The network's ecosystem strategy has shifted away from wstETH-relevant use cases - TVL and DeFi integration have remained consistently low since launch Because canonical recognition carries ongoing costs, including monitoring, security oversight, incident response, and user support, these resources are being concentrated where they create the most value. ## **What Changes Going Forward?** Active monitoring, marketing support, and ecosystem development for wstETH on the affected networks will be sunset. References to these networks will be updated across the [Lido Multichain page](https://lido.fi/lido-multichain?ref=blog.lido.fi), [Lido Docs](https://docs.lido.fi/deployed-contracts/?ref=blog.lido.fi#legacy-contracts), and [Help Center](https://help.lido.fi/en/collections/3641672-lido-multichain?ref=blog.lido.fi). The bridge infrastructure itself remains in place, and existing holdings are unaffected. The same DAO vote authorized the [Network Expansion Committee (NEC)](https://research.lido.fi/t/establishing-the-network-expansion-committee/8788?ref=blog.lido.fi) to handle similar revocations in the future without a full DAO-wide vote. To keep the process transparent while reducing operational overhead, any future revocation will require unanimous NEC support and a public forum announcement explaining the rationale. If an affected network later seeks renewed canonical recognition, it can re-apply through the NEC under the endorsement principles in place at that time. --- *The information provided on this page is for general informational purposes only and does not constitute financial or legal advice. Bridging involves significant risks, and individuals should conduct their own thorough research and seek advice from qualified professionals before participating. For more detailed information, please refer to our*[ *Terms of Use*](https://lido.fi/terms-of-use?ref=blog.lido.fi) *and the*[ *Lido FAQ*](https://lido.fi/faq?ref=blog.lido.fi)*.* ### Lido V3 & Luganodes: Expanding Institutional Ethereum Staking with stVaults URL: https://blog.lido.fi/lido-v3-luganodes-expanding-institutional-ethereum-staking-with-stvaults/ Last updated: 2026-06-12T15:50:30.000Z ## **Product Overview** [Luganodes](https://luganodes.com/?ref=blog.lido.fi) is an institutional-grade staking provider, built out [of the Lugano Plan B Program](https://planb.lugano.ch/?ref=blog.lido.fi), an initiative by Tether and the City of Lugano. Luganodes delivers proven reliability through geographically distributed, Tier IV bare-metal/hybrid data centers, maintaining a 100% validator participation rate. It is backed by independent SOC 2 Type II and ISO/IEC 27001 certifications, and further protected by institutional slashing insurance through Chainproof at no additional cost. The Luganodes stVaults bring compliance-ready ETH staking to Lido V3, a new staking primitive built for asset managers, ETF and ETP issuers, DAOs, and enterprise treasuries. They let institutions deploy dedicated, segregated validator infrastructure under a non-custodial framework, staking their ETH through Luganodes-run validators. Each vault is isolated and private, with the client in full control of its configuration and parameters. Clients retain custody of their withdrawal credentials and mint stETH on their own terms, and each client's assets stay segregated, with clear accounting per vault. ## **The Institutional Staking Tradeoff** Institutional ETH staking has historically required a compromise between liquidity and performance optimization. Direct staking offers operator selection and potentially stronger validator outcomes, but leaves capital illiquid: withdrawals must clear the Ethereum Exit Queue, which could stretch to weeks when exits surge, as they did in September 2025 (over 46 days). On the other hand, traditional liquid staking provides immediate liquidity, but removes operator choice and averages validator performance across a broad pool. For many platforms and asset managers, the inability to combine liquidity with performance-driven operator selection has constrained the development of staking-native yield strategies. stVaults resolve the native staking vs. pooled staking tradeoff, enabling institutional stakers to tap into stETH liquidity while maintaining full control. ## **Why Lido stVaults** stVaults introduce a new architecture where institutions can retain liquidity and composability without giving up control over validator selection and attribution. Lido V3 stVaults provide the foundational infrastructure required to meet institutional requirements at scale: - **Unparalleled liquidity:** By enabling the minting of stETH against assets held in staking vaults, stVaults allow institutions to maintain optional liquidity alongside staked ETH. - **DeFi ecosystem adoption:** Broad support for stETH and wstETH across the DeFi ecosystem allows institutions to deploy liquidity efficiently while continuing to earn staking rewards. - **Security of the Lido protocol:** Lido's battle-tested, audited infrastructure provides an institutional-grade security foundation. [Lido is Web3SOC certified](https://blog.lido.fi/lido-receives-web3soc-certification-for-institutional-defi-diligence/) by Cantina. Vault-level isolation and on-chain attribution provide the reporting clarity and operational control institutional clients require, supporting stronger compliance and auditability. ## **Integration and Security Approach** Luganodes is an [identified Lido V3 Node Operator](https://docs.lido.fi/run-on-lido/stvaults/operational-and-management-guides/node-operators-identification/?ref=blog.lido.fi) under the stVault Professional Operator category. In the Luganodes stVaults, ETH is staked through Luganodes' institutional infrastructure, and validator monitoring, performance management, and operational overhead sit with Luganodes. Standard Ethereum staking risks apply; for the full breakdown, see Lido's [Risk Assessment Framework for stVaults](https://research.lido.fi/t/risk-assessment-framework-for-stvaults/9978?ref=blog.lido.fi). The following measures have been implemented to support the security of Lido V3 and Luganodes stVaults\*: - **Compliance and certifications:** ISO 27001:2022, SOC 2 Type II, and GDPR-aligned operations, with regular third-party audits including Quantstamp - **Key management:** Remote signers, with keys held in secured environments rather than on validator hosts - **Slashing insurance:** Luganodes provides Chainproof coverage to institutional clients - **Smart contracts:** Lido V3 stVaults smart contracts have undergone audits by [Certora](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi) (including [formal verification](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Formal%20Verification%20Report%20-%2012-2025.pdf?ref=blog.lido.fi)), [MixBytes](https://github.com/lidofinance/audits/blob/main/MixBytes%20Lido%20V3%20Security%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Consensys Diligence](https://github.com/lidofinance/audits/blob/main/Consensys%20Diligence%20Lido%20V3%20Security%20Audit%20-%2011-2025.pdf?ref=blog.lido.fi), [Composable Security](https://github.com/lidofinance/audits/blob/main/Composable%20Security%20Lido%20V3%20Oracle%20V7%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Ackee Blockchain](https://github.com/lidofinance/audits/blob/main/Ackee%20Blockchain%20Vault%20Wrapper%20Report%2001-2026.pdf?ref=blog.lido.fi), and [Sigma Prime](https://github.com/lidofinance/audits/blob/main/Sigma%20Prime%20-%20Lido%20BLS%20Library%20Security%20Assessment%20Report%20v2.0%20-%2001-2026.pdf?ref=blog.lido.fi). An ongoing [Immunefi bug bounty](https://docs.lido.fi/security/bugbounty?ref=blog.lido.fi) offers white hats up to $2M in rewards. - **Built-in operational controls:** the stVaults’ design gives Vault Owners end-to-end control of the funds: supply/withdraw ETH, mint/repay stETH, monitor vault health parameters and metrics, trigger ETH withdrawals from validators, and perform rebalancing and vault closure or disconnect from the Lido protocol (Web UI support for these actions arriving in H2 2026). *\* Audits, bug bounties, and operational controls are intended to reduce but do not eliminate underlying protocol or market risks. Additional risks may remain or be unidentified.* ## **What It Means for Institutions** Luganodes brings institutional ETH staking to Lido V3 stVaults: isolated, non-custodial vaults that keep custody and operator choice with the institution, with stETH liquidity on demand. To set up Luganodes stVaults, [get in touch with the Luganodes team](https://www.luganodes.com/product/lido-v3-stvaults?ref=blog.lido.fi). For more on Lido V3 stVaults, visit [lido.fi/stvaults](http://lido.fi/stvaults?ref=blog.lido.fi). ## **Further reading** - [Luganodes on stVaults Products Overview](https://lido.fi/stvaults-products-overview/luganodes-stvaults?ref=blog.lido.fi) - [Lido V3 Documentation](https://docs.lido.fi/run-on-lido/stvaults?ref=blog.lido.fi) - [Lido V3 Whitepaper](https://docs.lido.fi/lido-v3-whitepaper/?ref=blog.lido.fi) - [Luganodes: Lido V3 stVaults for institutional ETH staking](https://www.luganodes.com/blog/lido-v3-stvaults-institutional-eth-staking?ref=blog.lido.fi) - [Lido V3 & stVaults](https://lido.fi/stvaults?ref=blog.lido.fi) ### Lido Poolside Recap: Tokenholder Update, May 2026 URL: https://blog.lido.fi/lido-poolside-recap-tokenholder-update-may-2026/ Last updated: 2026-06-01T09:30:20.000Z The May 2026 Lido Poolside Tokenholder Update covered the state of the staking market, Lido protocol Q1 financials, the impact of the Kelp DAO rsETH incident in April on the market and Lido protocol specifically, an assessment of 2026 targets, a deep dive into protocol security features, and next steps for Lido DAO. Read the highlights below or [watch the full recording](https://www.youtube.com/live/rM1NYuzQq50?ref=blog.lido.fi). ## **Agenda** 1. Financials & Execution 2. Kelp Incident Response 3. Tokenholder alignment and LDO Buybacks 4. State of the Market 5. Security Stance 6. Next Steps ## **Key Points** - Q1 closed with a $3M treasury surplus, delivering three consecutive months of positive operating results despite challenging market conditions. - When April's [bridge exploit at Kelp DAO left rsETH significantly underbacked](https://research.lido.fi/t/kelp-incident-review-earneth-exposure-response-and-risk-framework-changes/11579?ref=blog.lido.fi), Lido DAO joined the industry-wide DeFi United response, contributing 2,500 stETH and activating EarnETH's first-loss protection (144 ETH burned). As a result, EarnETH depositors faced no losses. EarnETH is now operating normally. - The 2026 annual targets established in December are no longer achievable given current market conditions. The Lido Foundations are cutting back on their spending for staking objectives, prioritizing profitability in staking, and are also exploring new products that build on the security expertise of Lido contributors. - New product preview: Wisp is a privacy-first agent system built around local controls and attested TEE execution: [the waitlist is now open](https://usewisp.io/?ref=blog.lido.fi). - Security is being repriced across DeFi after a string of major exploits this year. No Lido staking user funds have ever been lost in five years of operation, and the protocol carries top-tier third-party security ratings (Web3SOC Grade A; Credora and StakingRewards A+). This supports the strategic direction toward new products that leverage Lido protocol’s brand in security. - The Automated LDO buyback design and parameters were [approved via Snapshot](https://snapshot.org/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x022e901a6368573d18b150eecda563dd2ee17ad2aa6a0ef9772151cc7ba55187) vote, with onchain deployment expected in July 2026\. Batch #1 [of the LDO Accumulation program](https://snapshot.org/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x43be9ee8ce820d444f706e9dd763a223ebabf37be27931cc056888e6c2e48814) deployed 471 stETH into LDO at an average price of $0.3745. ## **Introduction** ### **Lido Protocol Fundamentals** Lido is the leading liquid staking protocol on Ethereum. Alongside [liquid staking](https://lido.fi/how-lido-works/lido-staking-protocol?ref=blog.lido.fi), the Lido ecosystem offers modular infrastructure for custom staking setups [via stVaults](https://lido.fi/stvaults?ref=blog.lido.fi), and DeFi-native yield strategies through [EarnETH](https://stake.lido.fi/earn/eth?ref=blog.lido.fi) and [EarnUSD](https://stake.lido.fi/earn/usd/?ref=blog.lido.fi). The Lido protocol is governed by Lido DAO, a decentralized autonomous organization of LDO tokenholders.[ Through the governance process](https://lido.fi/governance?ref=blog.lido.fi), the tokenholders set parameters, approve upgrades to the Lido protocol, manage Lido DAO Treasury allocations, define goals, and authorize grants, notably for the[ Lido Labs](https://research.lido.fi/t/establishment-of-lido-labs-borg-foundation-as-a-lido-dao-adjacent-foundation/9344?ref=blog.lido.fi),[ Lido Ecosystem](https://research.lido.fi/t/establishment-of-lido-ecosystem-borg-foundation-as-a-lido-dao-adjacent-foundation/9345?ref=blog.lido.fi), and[ Lido Alliance](https://research.lido.fi/t/organize-the-lido-alliance-program-as-a-lido-dao-adjacent-borg/8173?ref=blog.lido.fi) Foundations (together the “**Lido Foundations**”). **Lido Foundations** operate under defined DAO oversight and intervention rights and, by their bylaws, are required to follow tokenholder-approved directives. Lido Labs Foundation develops and maintains the protocol’s codebase, upgrades, and new features, while Lido Ecosystem Foundation leads ecosystem growth, partnerships, and business development for staking adoption; and Lido Alliance Foundation supports Lido's horizontal expansion and growth initiatives that fall outside the specific scopes of Labs and Ecosystem. ## **Financials** ### **Lido Protocol: Operational Model** The Lido protocol’s core operational model remains unchanged. Users deposit ETH into the Lido protocol and receive stETH (staked ETH) in return, a liquid token that can be utilized across the broad DeFi ecosystem. ETH is allocated through the Staking Router into various Staking Modules. Ethereum staking rewards flow back to the Lido protocol, with 90% distributed to stakers, approximately 4% (depending on the Staking Module) allocated to Node Operators, and the remainder directed to the Lido DAO Treasury. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-e5537cca-4845-434c-9bb0-5fbd97f7d3af.png) ### **Financial Position: Q1 2026** The DAO closed Q1 2026 with positive operating results in all three months despite challenging market conditions. Key reads from the table: - $2.98M treasury surplus across Q1 (Treasury Surplus = Total Net DAO Revenue − Total Lido Foundations' expenses) - $5.32M Core Protocol Operating Result for the quarter (Core Protocol Operating Result = Net DAO Staking Revenue − Core Staking Protocol Operating Expenses) - Stronger unit economics: with the DAO take rate at an all-time high (\~6.10%, +23%), net staking revenue grew despite ETH price headwinds (derived metric, not visible in the table below). - Treasury Management contributed $0.77M to revenue in Q1 from the DAO's stETH APY, sUSDS, and (T)MMF positions. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-e98f4bfb-65d8-45ee-86d0-c86f96d021ec.png) The DAO Treasury stood at approximately $121M as of April 30, 2026, down from around $157M at the start of the year. The decline of \~$36.5M was driven primarily by the ETH price effect on the DAO's stETH position (-$31.6M) and the DeFi United contribution (-$5.7M). ![](https://blog.lido.fi/content/images/2026/05/data-src-image-18a88111-2f63-4487-9d54-913be18cda56.png) ## **The April Kelp DAO Incident** A[ LayerZero](https://layerzero.network/?ref=blog.lido.fi) bridge exploit left[ Kelp DAO’s](https://kelpdao.xyz/?ref=blog.lido.fi) rsETH underbacked by more than 100,000 ETH. At the time, the rsETH/ETH loop [was one of the largest restaking positions on Aave](https://governance.aave.com/t/rseth-incident-report-april-20-2026/24580/?ref=blog.lido.fi), placing DeFi borrowers, lenders, and downstream protocols at risk. The EarnETH vault had direct rsETH exposure of approximately $20M. Lido DAO joined a broader coordinated response: **the DeFi United initiative**, which raised approximately 132,000 ETH from[ Aave](https://governance.aave.com/t/rseth-incident-report-april-20-2026/24580/137?ref=blog.lido.fi), Ethena, [Mantle](https://forum.mantle.xyz/t/passed-mip-34-strategic-credit-facility-for-aave-dao-rseth-exploit/9417?ref=blog.lido.fi), Ether.fi and others. [Lido DAO contributed 2,500 stETH](https://research.lido.fi/t/lido-dao-contribution-to-coordinated-rseth-relief-effort/11483?ref=blog.lido.fi) (approximately $5.7M at the time of transfer) to the DeFi United effort and approved the burn of EarnETH shares valued at 144 ETH through EarnETH’s first-loss protection. Together, the two actions ensured EarnETH depositors faced no losses. The broader initiative also helped stabilize the affected markets. The EarnETH vault was frozen for 27 days. The duration reflected a deliberate choice: until the DeFi United effort was resolved, the vault's damage could not be evaluated with certainty. The final outcome was 0% loss for depositors, whilst the worst-case scenario was up to approximately 12%. Letting users withdraw at no haircut before the resolution could have harmed those who remained in the vault if the rescue failed. Setting any haircut in advance would have harmed early withdrawers. The decision from the EarnETH vault’s curator was to wait for certainty on the damage; when it arrived, withdrawals unfroze. EarnETH withdrawals are now unfrozen and operating normally. EarnUSD withdrawals were neither frozen nor affected by the incident. For more context, [see postmortem](https://research.lido.fi/t/kelp-incident-review-earneth-exposure-response-and-risk-framework-changes/11579?ref=blog.lido.fi). ### **Updated Risk Policy for Lido Earn** Three risk policy changes are now in effect and shall be followed by the curator: 1. **Dependency-level risk review.** Material allocations now receive a full-chain review across bridge, oracle, lending market, liquidity venue, unwind route, governance, and counterparty risks, plus a combined-failure stress test. 2. **Predefined unwind playbooks.** Leveraged positions require documented exit paths before deployment. 3. **Formalized first-loss activation criteria.** Clearer criteria determine when and how first-loss protection activates for future incidents. The rsETH position in EarnETH is being unwound by the curator and is unlikely to meet the updated risk requirements. Future allocation decisions shall follow the systemic risk process. ## **Tokenholder Alignment & LDO Buybacks** A few properties continue to anchor the Lido protocol’s structural alignment with LDO tokenholders: - All protocol fees flow to the DAO Treasury. - Tokenholders retain exclusive authority over treasury allocations via the governance process. - Lido Foundations are moving to quarterly financial reporting in 2026\. The Q1 financial report is being finalized for June publication, and a detailed first-half business report is targeted for Q3. - Automated buybacks are in development. Taken together, these properties earned Lido a 12/12 score on the [Aragon Token Ownership Index](https://otf.aragon.org/tokens/ldo?ref=blog.lido.fi). ### **LDO Accumulation Program: Batch #1** Under the discretionary trade program [approved by Lido DAO via Snapshot](https://snapshot.org/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x43be9ee8ce820d444f706e9dd763a223ebabf37be27931cc056888e6c2e48814), [1,000 stETH was requested](https://dao.lido.fi/easy-track/motions/1017?ref=blog.lido.fi) from Treasury for Batch #1\. As of the call, 471 stETH had been deployed into LDO at an average price of $0.3745\. Batch #1 closes May 29; full results will be posted to the research forum within a week of that date. Contributors will then take stock and propose the way forward, including refining parameters. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-f1ffa4d1-0f03-473f-8bef-abb8ab7c7094.png) ### **NEST Automated Buyback Architecture** Network Economic Support Tokenomics (NEST) is a rule-based onchain mechanism designed to acquire LDO when Lido protocol’s revenue and the market present favorable conditions. The mechanism establishes a direct link between protocol performance and LDO: when the DAO generates surplus, a portion is automatically deployed into LDO buybacks and DAO-owned LDO/wstETH liquidity. Its design and parameters were [approved by the DAO via Snapshot vote](https://snapshot.org/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x022e901a6368573d18b150eecda563dd2ee17ad2aa6a0ef9772151cc7ba55187). ![](https://blog.lido.fi/content/images/2026/05/data-src-image-29cfc591-440d-48c0-869e-a41d6b5282bb.png) NEST has two modes: LP and Treasury. In LP mode (the proposed launch configuration), LDO is paired with wstETH and deployed as DAO-owned liquidity in a Curve v2 NG pool. In Treasury mode, LDO goes directly to the DAO treasury. Switching between modes requires an onchain vote. With the NEST design approved, the next step is deploying the mechanism onchain. This requires a DAO Aragon vote, tentatively expected to take place in July. The **LDO Accumulation Program** continues executing in parallel unless the DAO pauses its Easy Track motions. ## **Market State** The Ethereum staking landscape could be viewed across five primary segments: - **Simple liquid staking** — traditional liquid staking without added layers or leverage (e.g., stETH by Lido protocol, rETH by Rocket Pool). Users deposit ETH and receive a liquid staking token in return. - **Exchange staking** — staking through centralized exchanges such as Binance, Coinbase, or Kraken. These custodial products keep users’ ETH offchain, meaning it generally can’t be utilized in DeFi. - **Delegated staking** — delegated or self-staking, typically preferred by institutional stakers, custodians, and funds. This generally involves larger deposits, lower staking rewards, and illiquidity, as ETH is locked in staking. - **APR Maxis** — high-complexity strategies like restaking and leveraged staking that aim to amplify rewards through additional mechanisms (e.g., Ether.fi, StakeWise). - **Other/uncategorized** — smaller or unidentified setups, such as bespoke institutional products or non-pooled staking. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-9568f8d8-ebd1-412d-9de2-67b5909f22a2.png) The Ethereum staking market has shifted significantly since the start of the year, with the largest shifts in May. The biggest move was in Delegated Staking, which grew sharply on institutional inflows from Grayscale and BitMine, each contributing significant ETH staked through a handful of node operators. By contrast, APR Maxis contracted sharply on two compounding pressures: EigenLayer reducing its restaking incentives, and the April Kelp DAO incident, which triggered widespread unwinding of leveraged staking loops across DeFi. The Lido protocol felt this too, but far less than peers: its total TVL fell only about 5%, much of it that same leveraged unwinding rather than broad user outflow. Simple LST, Exchange Staking, and Other categories were largely stable through the period; the Lido protocol continues to hold approximately 90% of the Simple LST segment. ## **Lido Protocol: Share by Segment** ### **APR Maxis** ![](https://blog.lido.fi/content/images/2026/05/data-src-image-52d0cb0c-1f11-4c72-b515-fa5ac4c42d39.png) The Lido protocol’s share within the APR Maxis segment fell from 39% in December to 29% in May. The drivers: - EarnETH TVL dropped from 111,000 ETH to 58,000 ETH following the Kelp incident; EarnUSD TVL fell from $9.2M to $7.6M. - stETH deposited in EigenLayer declined materially as Ether.fi unwound its position. - stETH in leveraged (re)staking strategies fell across the board. ### **Delegated Staking** ![](https://blog.lido.fi/content/images/2026/05/data-src-image-ff13ca7d-42fd-4288-a4eb-56886cb51188.png) The Lido protocol’s share in the delegated staking segment moved from 1.0% in December to 1.3% in May, a slight improvement but below plan. stVaults TVL stands at approximately 5,500 ETH against a 1.05M ETH annual target. [WisdomTree’s](https://www.wisdomtree.eu/?ref=blog.lido.fi) stETH ETP holdings grew approximately 23.4% year-to-date (from roughly 17,000 to roughly 21,000 ETH), a positive directional signal. The institutional players currently entering staking prefer the simplest available path of native staking. Two factors are slowing stVaults uptake: 1. Practically, [the Ethereum entry queue](https://www.validatorqueue.com/?ref=blog.lido.fi) is congested with BitMine and ETF-related inflows, leaving institutional capital queued ahead of products like stVaults. 2. Institutional appetite for advanced DeFi strategies is still building, and the recent wave of hacks across DeFi has made these players more apprehensive. Meaningful stVaults adoption is expected from Q4 2026 onward. ### **2026 Targets Reassessment** The annual targets set in December 2025 are no longer achievable. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-6d7d24a2-7527-4a4b-bddf-a863aeff4c82.png) The DAO take rate hit an all-time high of 6.10% in May (4.96% in December, +23%), following the Curated Module fee adjustment proposal. The other deviations from plan are largely influenced by external market and ecosystem conditions: ETH price decline, network-wide APR compression, Ethereum entry queue of 50+ days, and the Kelp incident's contagion effects on Lido Earn and Lido Core TVL. ### **The Path Forward** Given current conditions, two priorities guide the near term: 1. **Keep staking sustainable** and **reduce spending on staking goals** that are out of reach at current market parameters. 2. **Explore and build new products that leverage the Lido protocol’s established staking infrastructure and security track record.** Prototype and ideation work is underway in the DeFi area. ## **Lido Protocol Security Stance** Security is being repriced across DeFi. This creates pressure in segments exposed to protocol complexity and validates Lido protocol’s position in simpler staking. Third parties are signaling their preference through product decisions: [on SparkLend](https://spark.fi/?ref=blog.lido.fi), high-leverage ETH borrowing in e-mode [accepts only wstETH as collateral](https://x.com/sparkdotfi/status/2051281352839053552?ref=blog.lido.fi). Risk mitigation is central to Lido protocol design and development. As a result: no staking user funds have ever been lost since the launch in 2020, and the protocol holds top-tier ratings (Grade A or A+) across major third-party security and risk assessments. - [Web3SOC](https://web3soc.com/?ref=blog.lido.fi) Grade A: assessed across operational, financial, security, and regulatory dimensions for institutional audiences. - [Credora](https://credora.io/?ref=blog.lido.fi) A+ rating: covering token structure, audit history, governance architecture, and risk modifiers. - [StakingRewards](https://www.stakingrewards.com/?ref=blog.lido.fi) A+ rating: provider risk assessed across Business, Operations, Reliability, and Security. The security architecture operates across seven sequential layers: Spec and Research, Development, Audits, Release, Voting, Post-release, and Incident Response. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-c1f3363f-89ec-4790-b3d8-23caf7f424b8.png) Most failures across the industry trace back to the human layer, not code. Lido contributors' approach is to limit what any individual can do, and to rely on automated circuit breakers to contain the damage from a compromised person, so that no single failure causes catastrophic loss. Multisig signing thresholds scale with the value and access of each wallet, and the DAO retains ultimate control. Even multisigs with protocol roles can only take defensive actions like pausing or turning contracts off, never resuming or changing them on their own. Pauses are time-limited, and any substantive protocol change requires a full onchain vote. ### **Composability** The Kelp incident highlighted how composability can expose even a well-secured protocol to others' mistakes. The approach to owning more of the stack is case-by-case, guided by three criteria: 1. **Best-in-industry quality.** If a component benefits from market competition keeping quality high, source it externally. The competitive dynamic does the work over time. 2. **Misalignment risk.** If reliance on a third-party operator introduces meaningful risk, and the relevant function is feasible to support internally, that function may be transitioned into the organization’s infrastructure. 3. **Commercial terms.** Some parts of the stack are simply much cheaper to procure externally than to keep inside. ## **Lido DAO: New Bets** ### **Strategic Direction** In addition to keeping staking sustainable while tightening costs, the goal is to explore new products that leverage Lido protocol’s brand in security to create new revenue sources for the DAO. Several concepts are in prototype and ideation; more will be shared as customer validation progresses. ### **Wisp: Confidential AI** The first product to reach public preview is[ Wisp](https://usewisp.io/?ref=blog.lido.fi), an AI harness utilizing confidential LLMs that runs prompts inside an attested hardware-sealed TEE; identity, all files and stored memory stay on the user’s machine. Wisp follows a familiar pattern in the Lido ecosystem: contributors built a solution tailored to their operational needs after existing AI tools raised concerns about privacy and handling of sensitive information. The project is now being explored for broader external use cases. A public waitlist is open at [usewisp.io](http://usewisp.io/?ref=blog.lido.fi). ## **What’s Next** Additional DeFi products are being prototyped to leverage Lido protocol’s established security track record and generate new revenue sources for the DAO. Earlier-stage concepts aren't being discussed publicly until they've been validated. ## **Additional Resources** - Full recording (YouTube link will be added after publication) - [NEST buyback proposal on Snapshot](https://snapshot.org/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x022e901a6368573d18b150eecda563dd2ee17ad2aa6a0ef9772151cc7ba55187) and[ original research forum thread](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894?ref=blog.lido.fi) - EarnETH postmortem (link will be added after publication) - [Aragon Token Ownership Index: Lido score](https://otf.aragon.org/tokens/ldo?ref=blog.lido.fi) - [Wisp Waitlist](https://usewisp.io/?ref=blog.lido.fi) Lido Poolside community calls run monthly. Tokenholder Update sessions are quarterly. [Subscribe via Luma](https://luma.com/lido?ref=blog.lido.fi) for updates on upcoming events. --- *This material is for informational purposes only and is not investment, legal, business, financial, or tax advice.* *No representation or warranty, express or implied, is made as to its accuracy, completeness, or timeliness. No information in this material should be interpreted as a recommendation or relied upon as a guarantee of any specific outcome. Past performance is not indicative of future results. Any opinions or forward-looking statements reflect the current judgment of the Foundations as of the date of this publication and are subject to change without notice. Parties should conduct their own independent evaluation before making any decisions.* ### Lido V3 & Cactus: Accessing stVaults via Cactus Link URL: https://blog.lido.fi/lido-v3-cactus-accessing-stvaults-via-cactus-link/ Last updated: 2026-05-29T08:45:11.000Z [Cactus Custody](https://www.mycactus.com/?ref=blog.lido.fi), an institutional digital asset custodian, now supports [Lido V3 stVaults](https://lido.fi/stvaults?ref=blog.lido.fi) through Cactus Link, its DeFi connector. Cactus Custody clients can create and manage stVaults from their existing custody account. Cactus Custody is the institutional digital asset custody solution of [BIT](https://www.bit.com/?ref=blog.lido.fi) (formerly Matrixport), founded in February 2019\. The platform safeguards digital assets across 60+ blockchain ecosystems for over 400 institutional clients, including investment funds and asset managers, exchanges, OTC providers, payment platforms, mining pools, and institutional DeFi participants. Cactus Custody holds a Hong Kong Trust or Company Service Provider (TCSP) license and a Bhutan Gelephu Mindfulness City Authority (GMCA) Financial Services Licence (FSL), with SOC 1 Type II and SOC 2 Type II attestations (Deloitte) [covering its custody operations](https://www.mycactus.com/trust-center?ref=blog.lido.fi). Its architecture combines HSM-backed cold storage with an institutional MPC offering, giving clients a choice between qualified-custodian and self-custody-style configurations. Cactus Custody [is one of the Qualified Custodians](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi) supporting stVaults, Lido protocol's modular staking infrastructure. stVaults introduce a single-operator architecture that enables large staking entities (including institutions, ETFs, ETPs, and asset managers) to deploy dedicated, customizable vaults with control over validator choice, fee terms, and infrastructure, while retaining on-demand liquidity through optional stETH minting. Compared to pooled staking approaches, stVaults are designed to address the control-versus-liquidity tradeoff, enabling stakers to run validators with their chosen counterparty, define geographic or jurisdictional parameters, and configure MEV routing and insurance mandates to meet specific internal risk and policy requirements. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-d2333bc2-e1f0-49eb-b92e-0569bb2197d3.png) The integration builds on Cactus Custody’s existing support for stETH and wstETH. Institutions holding Lido liquid staking tokens in custody can now combine them with stVault operations and other DeFi protocols accessible through Cactus Link. ![](https://blog.lido.fi/content/images/2026/05/Cactus_quote_Sam.png) ## **How It Works** The connection runs through [Cactus Link](https://chromewebstore.google.com/detail/cactus-link/chiilpgkfmcopocdffapngjcbggdehmj?ref=blog.lido.fi), a browser extension that operates similarly to a standard hot wallet. Setup is two steps: 1. Install [the Cactus Link extension](https://chromewebstore.google.com/detail/cactus-link/chiilpgkfmcopocdffapngjcbggdehmj?ref=blog.lido.fi) and confirm DeFi account permissions with the Cactus Custody administrator. 2. [In the stVaults Web UI](https://stvaults.lido.fi/?ref=blog.lido.fi): click 'Connect Wallet', then 'Browser' in the dialog window. Once connected, vault owners can create stVaults and perform day-two operations: supplying or withdrawing ETH, minting or repaying stETH, monitoring vault health, triggering rebalancing or closure, and following emergency procedures. Full setup steps are [in the Cactus Custody user guide](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/cactus/?ref=blog.lido.fi). Administrators must whitelist the stVaults smart contract addresses before interaction; the address list is available in the [Qualified Custodians overview](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi#whitelisting-smart-contract-addresses). This flow is for vault owners: institutions that want to create and operate their own vault. Support varies by jurisdiction, entity, and onboarding scope. Before creating a vault, teams should confirm availability and policy settings with their Cactus account manager. ### **Security & Risk** Standard Ethereum staking risks apply — for the full breakdown, see Lido's [Risk Assessment Framework for stVaults](https://research.lido.fi/t/risk-assessment-framework-for-stvaults/9978?ref=blog.lido.fi). The following measures have been implemented to support the security of Lido V3\*: - **Smart contracts.** Lido V3 stVaults smart contracts have undergone audits by [Certora](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi) (including [formal verification](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Formal%20Verification%20Report%20-%2012-2025.pdf?ref=blog.lido.fi)), [MixBytes](https://github.com/lidofinance/audits/blob/main/MixBytes%20Lido%20V3%20Security%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Consensys Diligence](https://github.com/lidofinance/audits/blob/main/Consensys%20Diligence%20Lido%20V3%20Security%20Audit%20-%2011-2025.pdf?ref=blog.lido.fi), [Composable Security](https://github.com/lidofinance/audits/blob/main/Composable%20Security%20Lido%20V3%20Oracle%20V7%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Ackee Blockchain](https://github.com/lidofinance/audits/blob/main/Ackee%20Blockchain%20Vault%20Wrapper%20Report%2001-2026.pdf?ref=blog.lido.fi), and [Sigma Prime](https://github.com/lidofinance/audits/blob/main/Sigma%20Prime%20-%20Lido%20BLS%20Library%20Security%20Assessment%20Report%20v2.0%20-%2001-2026.pdf?ref=blog.lido.fi). An ongoing [Immunefi bug bounty](https://docs.lido.fi/security/bugbounty?ref=blog.lido.fi) offers white hats up to $2M in rewards. - **Custody-side controls.** Interactions with stVaults contracts are performed via Cactus Link. - **Built-in operational controls.** stVaults’ design allows Vault Owners to end-to-end control the funds in the vault: supply/withdraw ETH, mint/repay stETH, monitor the vault health parameters and metrics, trigger ETH withdrawals from validators, perform rebalancing and vault closure or disconnect from the Lido protocol (Web UI support for these actions arriving in early Summer 2026). *\* Audits, bug bounties, and operational controls are intended to reduce but do not eliminate underlying protocol or market risks. Additional risks may remain or be unidentified.* For institutions, the key point is that stVaults can be operated with a familiar security model: on-chain actions may be gated by your existing Cactus Custody policies, while Lido V3 contracts have undergone audits and include clearly defined emergency procedures. Teams should still run their own diligence on smart-contract, operational, and regulatory risks, and ensure internal approvals and monitoring are in place before going live. [Book a call](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi) with the Lido Institutional team for further details. ## **Further Reading** - [Cactus Announcement](https://blog.mycactus.com/announcements/cactus-lido-stvaults/?ref=blog.lido.fi) - [Qualified Custodians Overview](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi) - [Cactus Custody Integration Guide](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/cactus/?ref=blog.lido.fi) - [stVaults Documentation](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [stVaults 101](https://lido.fi/how-lido-works/stvaults-basics?ref=blog.lido.fi) ### stVaults Monthly Updates: March-April 2026 URL: https://blog.lido.fi/stvaults-monthly-updates-april-2026/ Last updated: 2026-07-08T17:51:10.000Z stVaults are a new staking primitive introduced in Lido V3\. They resolve the native staking vs. pooled staking tradeoff by giving Node Operators full control over validator operations, with the option to offer clients stETH liquidity and DeFi integrations. Here's what’s new with stVaults in April. --- ## **Entry Queue Status** The Ethereum validator entry queue stretched to \~54 days by late April. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-1947b4b7-da90-422b-931e-94dcf8b4d47d.png) With the entry queue running long, Lido contributors have surfaced two options that help stakers begin migration and take full advantage of stVaults: - [**Validator consolidation**](https://blog.lido.fi/validator-consolidation-a-capital-efficient-way-to-migrate-to-stvaults/): this approach enables stakers and operators to migrate stake into an stVault, while largely bypassing the entry queue. Source validators continue accruing rewards throughout the migration. This unlocks DeFi composability, enhanced rewards, and liquidity for large staking positions. - [**0% infra fee extended through the end of June**](https://research.lido.fi/t/default-risk-assessment-framework-and-fees-parameters-for-lido-v3-stvaults/10504/6?ref=blog.lido.fi): this limited-time offer waives Lido’s base stVaults fee to offset the cost of stVault migration, especially for cases where validator consolidation is not possible. --- ## **Products Overview Hub** stVaults now have a [dedicated products page](https://lido.fi/stvaults/stvaults-products-overview?ref=blog.lido.fi). The discovery hub showcases leading vault-based products built on the platform. There are three products are listed at launch: - [**RockSolid AutoPlus Looped ETH Vault**](https://lido.fi/stvaults-products-overview/rocksolid-autoplus-stvault?ref=blog.lido.fi): public-access looped ETH yield strategy, built by RockSolid and curated by Tulipa Capital. - [**Northstake Staking Vault Manager (SVM)**](https://lido.fi/stvaults-products-overview/northstake-svm?ref=blog.lido.fi): institutional staking vault manager, built by Northstake. - [**Ebunker stVaults**](https://lido.fi/stvaults-products-overview/ebunker-stvaults?ref=blog.lido.fi): institutional vault product, built by Ebunker. To get your vault featured on the Lido stVaults Products Overview, reach out to the team by filling out these forms: - [For technical details](https://tally.so/r/NpWWeN?ref=blog.lido.fi) - [For marketing details](https://tally.so/r/dW9ldq?ref=blog.lido.fi) ![](https://blog.lido.fi/content/images/2026/05/data-src-image-1f78a56d-38af-4185-900f-b908e1f85ce3.png) --- ## **DeFi Wrapper: Lido Earn Connector** The DeFi Wrapper added a connector to [Lido Earn](https://blog.lido.fi/lido-earn-expands-with-earneth-and-earnusd/), opening a clean path between vault-issued stETH and composable DeFi. Builders working with the Wrapper can route stake to Earn as part of their strategy without bolting on extra plumbing. --- ## **stVaults Web UI** The stVaults Web UI provides a simple, well-instrumented interface for vault builders and owners to monitor vault performance. In April, the stVaults team launched new tooling: ### **Handling large deposits and consolidations in key metrics** With the current entry queue, [unguaranteed deposits](https://docs.lido.fi/contracts/predeposit-guarantee?ref=blog.lido.fi) and [validator consolidations](https://blog.lido.fi/validator-consolidation-a-capital-efficient-way-to-migrate-to-stvaults/) are a normal part of running a vault. However, they can also produce one-off spikes in APR and CarrySpread. The Web UI and CLI now detect these as statistical outliers and exclude those days from rolling calculations. Users now receive a warning on the stVault details page when this happens. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-98b289a6-d35a-4a99-866b-c5dbe846fbad.png) ### **Oracle Report Status Indicator** The Overview page now shows the oracle report’s date and status. Users can manually request it by clicking the “Apply fresh report” button, or it gets applied automatically before any action that requires one. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-0ff754dc-630d-41c9-a7b6-7a00866c061d.png) ### **stVault Address Overview** The stVaults Web UI now displays a list of important addresses associated with the stVault: Dashboard, VaultHub, OperatorGrid, and LazyOracle. Users who need a specific address to use in Etherscan or the CLI can find it on the stVault details page. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-d51b9ee6-bf2c-49d4-abf4-65bd697d24b4.png) ### **Permissions Page Improvement** The Permissions settings page now displays technical names for roles and permissions, making it easier for users who work across both the Web UI and CLI to identify roles consistently. Full role descriptions are now also accessible directly in the UI. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-e528c2fa-0008-4971-8ac2-afda7eb45676.png) ### **Validators Page: Status, Top-ups & Withdrawals** Users can now see their validators' status on the Beacon Chain and (depending on their role) top them up from the stVault balance, or perform partial or full withdrawals. All in the Web UI, no CLI required. Another step toward enabling institutional stakers to exercise granular control over funds via the web interface. ![](https://blog.lido.fi/content/images/2026/05/data-src-image-932d1cd1-52ca-424a-a746-a9179ccbf21d.png) ![](https://blog.lido.fi/content/images/2026/05/data-src-image-76f98803-b5c1-4a75-bdd3-ceda6bc49c13.png) ![](https://blog.lido.fi/content/images/2026/05/data-src-image-1ddd4992-caeb-4ea1-9bab-a67905ca1958.png) --- ## **stVaults CLI v1.6 → 1.8** ### **New Capabilities** Strategy contracts connected to StvStrategyPool now have full CLI support: dedicated read/write commands and timelock governance flows (propose/execute) at the same level as pools. Etherscan contract verification is handled directly by Factory commands. A new statistic-by-reports-full command gives operators a detailed report-by-report performance breakdown. The Distributor supports claim and snapshot-based distribution mode. Operators can pause and resume minting for stv-steth-pool. The metrics methodology is now fully documented. ### **Metric Accuracy** netAPR, CarrySpread, and accrued-fee calculations were refined to stay accurate when fee withdrawals or stETH minting happens mid-period. Accrued fee is now computed off-chain from IPFS data, so the numbers are correct even if the latest oracle report hasn’t been applied on-chain yet. ### **Reliability & Security** A dedicated security pass hardened input validation, URL handling, and cache processing across the CLI. Gas estimation handles low-balance accounts correctly. JSON output is clean and pipe-friendly for scripting. Addresses in tables are clickable block-explorer links, and IPFS now supports CIDv1. [Full changelog](https://github.com/lidofinance/lido-staking-vault-cli/blob/develop/CHANGELOG.md?ref=blog.lido.fi) → --- ## **stVaults Doc Center** The [Doc Center](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) is live: a single home for stVaults guides, references, and how-tos. The first major addition is [**Qualified Custodians**](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi), with two user guides covering the workflows institutional stakers and their custodians may use: - [**Fireblocks**](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/fireblocks?ref=blog.lido.fi) — accessing stVaults via WalletConnect - [**Copper**](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/copper?ref=blog.lido.fi) — accessing stVaults via CopperConnect More guides are landing through May. --- ## **Lido Poolside: Institutional (Apr 23)** April's Lido Poolside Call was dedicated to institutional staking, with Adam Levine (CEO, Fireblocks Trust Company), Credora, and FalconX, covering DeFi access from qualified custody, Credora's first public asset-level rating on a liquid staking token (stETH at A+), and what's next for institutional Ethereum staking. [Lido Poolside: Institutional, April 2026](https://youtu.be/ullzt1Tn7oU?ref=blog.lido.fi) --- ## **What’s Next** A number of exciting stVaults developments are planned for May – stay tuned! 1. **stVaults UI** 1. Anti-scam protections for stakers 2. Native Lido fee settlement in the UI 3. Rebalance and exit flows 2. **Products Overview** 1. New product listings 3. **Docs** 1. More custodian guides --- *Want to talk through stVaults for your vault, your product, or your roadmap?*[ *Get in touch*](https://tally.so/r/mVrkZa?ref=blog.lido.fi) ### The Blueprint for Implementing Liquid Staking for ETH ETFs URL: https://blog.lido.fi/blueprint-for-implementing-liquid-staking-for-eth-etfs/ Last updated: 2026-05-15T13:24:10.000Z The first generation of Ethereum ETFs proved there is a massive appetite for ETH in a regulated wrapper. But as we transition into the "Staking Era" of ETH products, the conversation has shifted from "if" to "how." We recently explored why liquid staking could be considered structurally better suited to [exchange-traded products than native staking](https://blog.lido.fi/how-liquid-staking-unlocks-higher-rewards-for-eth-etfs-and-etps/). This blog goes deeper into the legal and technical architecture that makes implementation work. We have already seen this move from theory to reality with the launch of the [WisdomTree Physical Lido Staked Ether ETP](https://blog.lido.fi/wisdomtree-launches-first-fully-staked-eth-etp-backed-by-steth/) (LIST) – the first product of its kind to be fully backed by stETH. For an ETF issuer, integrating liquid staking is not just a financial decision; it is a technical and legal engineering feat. By using stETH, issuers can bypass the operational bottlenecks of native staking while maintaining the rigorous compliance standards expected by institutional investors. Here is how the legal and technical architecture works under the hood. ### **1\. Liquid vs. Native Staking: The Efficiency Gap** Before diving into the architecture, it’s important to understand why most users believe liquid staking is the superior choice for a regulated product compared to native staking. In a native staking model, ETF issuers face a trade-off between rewards and liquidity. To facilitate daily redemptions without being trapped by the Ethereum validator exit queue, native-staking issuers typically must keep a significant "liquidity buffer" of unstaked, idle ETH – often as much as 50%-60% of the fund. This creates a significant performance drag: - **Traditional Native-Staked ETP:** Only \~50% of assets are generating rewards. If the staking rate is 3.0%, the "blended yield" for the \[user/staker\]is roughly **1.5%**. - **Liquid-Staked ETP (via stETH):** The fund can be **100% staked** because stETH is liquid and can be exchanged for ETH on secondary markets to meet redemptions, the need for an idle cash buffer is removed. The staker can now capture the full **3.0%** staking rewards rate. For the issuer, this moves the needle from a partial, inefficient reward generation to a product that is 2x more efficient. ### **2\. The Legal Framework: Commodities, Receipts, and the 1933 Act** The primary legal hurdle for any US-based ETH ETF is its registration status. Most proposed staked ETH ETFs, including recent filings by [VanEck](https://blog.lido.fi/vaneck-files-for-lido-staked-eth-etf/) are registered under the **Securities Act of 1933 \[33 Act\]**, rather than the Investment Company Act of 1940 \[40 Act\]. - **LSTs as "Receipts," not "Securities":** A key legal argument, supported by recent [SEC staff statements](https://www.sec.gov/newsroom/speeches-statements/corpfin-certain-liquid-staking-activities-080525?ref=blog.lido.fi), is that liquid staking protocols like Lido perform **administrative** rather than **entrepreneurial** functions. In this view, stETH is treated as a "staking receipt" – a digital proof of ownership for the underlying ETH and its accrued rewards, rather than a new investment contract. - **The Custody Nexus:** From the above-mentioned statements, it may be understood that the fund must ensure that the assets are held by a "qualified custodian." Technical integrations with institutional-grade providers such as Fireblocks, Copper, and BitGo enable issuers to hold stETH in the same secure environments used for "spot" ETH, thereby satisfying regulatory requirements for asset segregation and protection. ### **3\. The Tech Stack: Oracles and the Daily Rebase** In a traditional ETF, the Net Asset Value (NAV) is calculated at the end of every trading day. A native staking position is notoriously difficult to price daily because rewards are locked in the consensus layer and validator balances fluctuate. Liquid staking solves this through a robust **Oracle and Accounting Architecture**: - **Automated Accounting:** Lido protocol’s AccountingOracle performs a daily "frame" update. It aggregates data from both the Ethereum Execution and Consensus layers, factoring in staking rewards, execution layer tips, and MEV. - **The Rebase Mechanism:** This data triggers an on-chain rebase, increasing the fund’s stETH balance to reflect rewards. For an ETF issuer, this turns a complex "consensus layer" calculation into a simple "token balance" check, which is far easier to audit and report for daily NAV. ### **4\. Modular Infrastructure: Lido V3 and "stVaults"** One of the most significant technical advancements for institutions is the launch of [**Lido V3**](https://lido.fi/stvaults?ref=blog.lido.fi). Traditionally, liquid staking meant joining a massive, permissionless pool. For a regulated ETF, this can sometimes present "know your validator" (KYV) concerns. The Lido protocol’s new **stVault architecture** allows for a more customisable approach: - **Isolated Staking:** By default, ETH staked within an stVault is kept separate from all other protocol participants. This means the fund’s assets are not pooled with retail users, ensuring that slashing risks or performance fluctuations elsewhere cannot impact the ETP’s specific holdings. - **Configurable Staking:** Large issuers can now use modular smart contracts to define exactly which node operators they want to use (e.g., choosing only SOC 2-compliant or geographically specific operators). - **Staking Without Minting:** For funds that may face internal accounting hurdles with "holding a new token," the V3 architecture can support staking exposure without requiring the fund to mint or hold the liquid token itself, instead managing the position via a third party market maker, AP or dedicated vault with “liquidity on-demand”. ### **5\. The Creation & Redemption Flow** The technical magic of an stETH-backed ETF lies in the **Authorized Participant (AP)** workflow. In a natively staked fund, if a large staker redeems their position, the fund might have to [wait weeks for a validator to exit the queue](https://www.validatorqueue.com/?ref=blog.lido.fi) to get the ETH back. With a liquid staking structure: - **Secondary Market Liquidity:** APs can source stETH or ETH from deep secondary markets. - $100m liquidity within 2% depth - $50B of redemptions facilitated - **Instant Finality:** As stETH is a liquid ERC-20 token, redemptions can be settled almost instantly using market liquidity, rather than being at the mercy of the Ethereum validator exit queue (which can range from days to weeks during periods of high demand). ### **Why This Matters for the Next Wave of Institutional Adoption** The combination of legal structure and staking mechanics enables an ETH ETF to evolve from a passive price tracker into a reward-bearing digital asset. By abstracting the complexities of validator management into a transparent, on-chain token, issuers can focus on what they do best: providing secure, regulated access to the world’s most productive digital asset. The infrastructure is ready. The legal pathways are clearing. The next generation of ETH ETFs won't just hold the asset; they will put it to work. > ETF issuers evaluating staked ETH products can connect with the [Lido Institutional team](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi) to discuss structure, custody, and implementation. ### Cross-Chain Security Principles: Why Lido’s Network Expansion Committee Chose Chainlink CCIP URL: https://blog.lido.fi/cross-chain-security-principles-why-lidos-network-expansion-committee-chose-chainlink-ccip/ Last updated: 2026-05-14T18:55:36.000Z Cross-chain bridge exploits have resulted in nearly [$3 billion in hacked funds](https://defillama.com/hacks?ref=blog.lido.fi), making cross-chain infrastructure one of the most important security decisions for any asset expanding beyond its origin chain. The Kelp / LayerZero exploit has further highlighted the importance of carefully evaluating bridge security, operational safeguards, and issuer controls when expanding assets across networks. Lido contributors are publishing this post to explain the security principles behind the protocol’s cross-chain strategy for Wrapped Staked Ether (wstETH), address community concerns over bridging standards across DeFi, and explain why Chainlink CCIP was selected as the official cross-chain infrastructure for wstETH. As wstETH continues its multi-chain expansion, user protection, DAO sovereignty, and maintaining the highest security standards are fundamental priorities for the protocol. ## **From Canonical Bridges to Chainlink CCIP** Currently, most cross-chain wstETH deployments rely on canonical bridges. [The Network Expansion Committee (NEC)](https://research.lido.fi/t/establishing-the-network-expansion-committee/8788?ref=blog.lido.fi), acting on behalf of the Lido DAO, reviews these deployments and formally recognizes them to make sure they adhere to the security standards and that the DAO retains ownership of these contracts. However, in practice this means that each cross-chain deployment is unique in terms of the set-up and requires monitoring of various systems rather than a single technical solution. Further, since the majority of recognized bridges are optimistic in nature, this approach reduces the efficiency of wstETH liquidity and arbitrage (since there is a 7+ day waiting period to withdraw back to mainnet). Due to this, in November 2025 NEC chose to adopt Chainlink’s [Cross-Chain Interoperability Protocol (CCIP)](https://docs.chain.link/ccip?ref=blog.lido.fi) as the official cross-chain infrastructure for wstETH. With this integration, all cross-chain transfers of wstETH will be secured by Chainlink CCIP by leveraging the [Cross-Chain Token (CCT)](https://docs.chain.link/ccip/concepts/cross-chain-token/overview?ref=blog.lido.fi) standard. Chainlink CCIP is already being used by wstETH on transactions between Ethereum, MegaETH, Monad and more. In the coming months, CCIP will be progressively implemented for wstETH bridges on the rest of the [supported chains](https://lido.fi/lido-multichain?ref=blog.lido.fi) in stages, with thorough multi-step execution. In addition to securing cross-chain wstETH transfers, Chainlink CCIP also powers [Lido’s Direct Staking rails, enabling](https://blog.lido.fi/lido-staking-goes-cross-chain-via-chainlink-ccip/) users to stake ETH directly from L2 networks (e.g., Arbitrum, Base, and Optimism) and receive wstETH. ## **Bridge Security Considerations for wstETH** Recent cross-chain security incidents, including the Kelp / LayerZero exploit, have prompted questions from the community about how bridge design, operational controls, and safeguards apply to wstETH’s multi-chain expansion. The following table summarizes key architectural and operational considerations relevant to wstETH’s use of Chainlink CCIP, and highlights how this setup addresses the security principles prioritized by Lido DAO contributors. | | Chainlink CCIP | LayerZero | | ---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | Decentralization | • 16 independent node operators validate all bridge lanes • Transparent security model easily communicated to end-users | • Default 2/2 DVN configuration • Limited decentralization options for DVN setups• Lack of standardized bridging configurations leads to different risk profiles on different chains | | Safeguards | • Native support for rate-limiting defined on a per chain lane basis • Extensive offchain monitoring and alerting to halt lanes during abnormal chain activity • Siloed deployments (each lane interacts only with mainnet) rather than a meshed bridging network.• Lido DAO retains governance oversight, minting limits, and emergency-response controls | • Rate limiting requires custom engineering as an extension• Safety and risk logic implementation, including active monitoring, outsourced to asset issuers | | Sovereignty | • CCIP preserves issuer control over all token contracts • No CCIP-specific logic required to be within token contract deployments• Eliminates structural vendor lock-in risk which ensures flexibility for future upgrades | • OFT tightly couples ERC20 to LayerZero infrastructure• Technical vendor lock-in makes it harder to migrate to alternative solutions in the future | Chainlink CCIP provides decentralization, native safeguards, and issuer control as part of its protocol-level design. These properties align closely with the security requirements Lido contributors identified for wstETH’s multi-chain expansion and help reduce exposure to risks associated with cross-chain transfer infrastructure. ### **1) Decentralized by Default, Secure by Default** The original priority for the NEC was to select a cross-chain architecture that delivers strong security-oriented design to minimize to the fullest extent possible potential bridge failure risk for wstETH holders and integrated DeFi applications.Aligned with the DAO’s security-first stance, CCIP does not rely on a single verifier, machine, or infrastructure provider. Rather, every CCIP bridge lane is secured by a minimum of 16 independent node operators that achieve decentralized consensus on every cross-chain interaction. CCIP node operators implement infrastructure diversity, including on-premise bare-metal and multi-region cloud deployments, along with operating robust RPC infrastructure with multiple layers of redundancies and verification checks. Robust cross-chain security and decentralization is a fundamental property built into the CCIP protocol itself. During the October 20, 2025 AWS outage that impacted major web services and other cross-chain providers, [CCIP experienced no downtime and remained fully operational](https://x.com/chainlink/status/1980329607460188315?s=20&ref=blog.lido.fi) thanks to this infrastructure diversity. Node operators in the Chainlink ecosystem include global enterprises, leading Web3 DevOps teams, and experienced Chainlink ecosystem projects, including organizations that also operate infrastructure for the Lido protocol such as P2P, Stakefish, StakingFacilities, and Everstake. CCIP was chosen because these defense-in-depth principles are incorporated into its protocol foundation, helping reduce exposure to the types of risks that have affected some cross-chain systems. ### **2) Availability of Built-In Safeguards** An important consideration in selecting CCIP was that the protocol provides built-in safeguards by providing native support for issuer-managed rate limits. Such rate limiting can serve as circuit breakers that intentionally limit the flow of wstETH across chains during extreme market volatility, systemic stress, or operational disruption. CCIP rate limits are defined on a per chain lane basis, including a rate limit capacity (max amount per transaction) and a rate limit refill rate (rate at which available capacity is replenished). The specific rate limit configuration for each wstETH CCIP bridge lane can be seen on the [CCIP Directory for wstETH](https://docs.chain.link/ccip/directory/mainnet/token/wstETH?ref=blog.lido.fi). A second consideration was the availability of siloed deployments, where each bridge only interacts between Ethereum Mainnet and the destination chain, rather than a meshed set-up where all bridge lanes interact with each other. In this case, if something were to go wrong with a single chain, it is contained to that specific lane rather than the full bridging set-up. Furthermore, CCIP is covered by extensive offchain monitoring and alerting infrastructure to detect and react to any abnormal activity with the underlying blockchain networks, such as unexpected finality violations, chain re-organizations, or other network abnormalities. Finally, Lido contributors are working with Chainlink to add secondary confirmations as an additional safeguard measure, where large wstETH transactions require an additional attestation before confirmation. ### **3) Issuer Sovereignty Without Vendor Lock-in** The NEC sought a multi-chain expansion strategy that prioritized long-term sovereignty, ensuring the protocol maintains control over all wstETH deployments, without any form of vendor lock-in. The NEC also considered whether cross-chain infrastructure choices could introduce dependencies that may limit future flexibility or make later migrations more complex. By adopting Chainlink’s [Cross-Chain Token (CCT)](https://docs.chain.link/ccip/concepts/cross-chain-token/overview?ref=blog.lido.fi) standard for wstETH, sovereignty is maintained over all token contracts. By eliminating the requirement to embed any CCIP-specific logic within wstETH token deployments, the CCT standard ensures flexibility for future upgrades, governance-led adjustments, and shifts in cross-chain architecture. Importantly, this prevents structural lock-in, allowing for the maintenance of long-term control over the wstETH multi-chain strategy. ## **Securing Cross-Chain wstETH** The decision to choose Chainlink CCIP serves as a broader imperative for the DeFi ecosystem: multi-chain expansion is a mission-critical infrastructure choice. Asset issuers must evaluate cross-chain systems with the same rigor they apply to custody, governance, and smart contract security. The selection of interoperability infrastructure must move beyond considerations of convenience or ecosystem reach. Instead, asset issuers must evaluate their cross-chain strategy based on the most rigorous security and architectural standards: - What is the actual security floor that users inherit by default? - Are operational safeguards natively embedded within the infrastructure, or does the issuer need to implement additional controls independently? - Does the underlying architecture preserve issuer control, or does it introduce hidden, proprietary dependencies? - Can protocol governance evolve the cross-chain design over time without being constrained by structural lock-in? The selection of Chainlink CCIP was driven by the protocol’s ability to provide the clearest and most secure answers to these fundamental requirements. ## **Building a Secure DeFi Ecosystem** As more value moves across chains, infrastructure will increasingly be evaluated on its ability to securely support critical assets at scale. Cross-chain infrastructure must be secure by default, operationally resilient, and aligned with issuer sovereignty. Chainlink’s defense-in-depth model acts as the definitive standard for cross-chain interoperability, and a rigorous path for sustainable multi-chain expansion. This rigorous standard and alignment with these security principles is why the NEC selected Chainlink CCIP as the official infrastructure for wstETH. ### What The Enterprise Ethereum Alliance Treasury Deployment Signals for Institutional Staking URL: https://blog.lido.fi/what-the-enterprise-ethereum-alliance-treasury-deployment-signals-for-institutional-staking/ Last updated: 2026-05-08T14:14:32.000Z ### EEA’s treasury deployment through the Lido protocol solves a practical question for institutional ETH holders: how to participate in staking while preserving liquidity and flexibility. Institutional access to Ethereum is no longer a theoretical question. ETPs are live, custody infrastructure is in place, and more treasuries are holding ETH directly. For many institutional ETH holders, the next question is what to do with that ETH beyond holding it. Leaving ETH unstaked means missing out on staking rewards. Native staking can address that, but it brings its own operational overhead: validator operations, custody setup, reporting processes, internal risk controls, and Ethereum's entry and exit queues. Those queues matter for treasuries. ETH waiting to enter the validator set is not yet receiving staking rewards, while exits are governed by Ethereum’s queue mechanics rather than treasury timing. Currently, the validator [entry queue is around 56 days](https://www.validatorqueue.com/?ref=blog.lido.fi), while the exit queue is around 7 days, with an additional sweep delay of nearly 8 days. Liquid staking offers a different route: ETH can participate in staking while stETH remains liquid and usable across existing workflows. Against that backdrop, [EEA’s treasury deployment through the Lido protocol](https://entethalliance.org/eea-treasury-deployment-ethereum-native-staking-infrastructure/?ref=blog.lido.fi) is an important example of an Ethereum-focused institution applying staking infrastructure to its own treasury. EEA has long focused on Ethereum advocacy, standards development, and enterprise coordination. By staking part of its treasury through Lido and receiving stETH, EEA is engaging directly with Ethereum-native infrastructure in practice. *"Treasury decisions come down to three questions. Can we exit when we need to? Does our custody stack support it? Has a regulated institution already vetted it? Lido's stETH answers yes on all three."* [***Redwan Meslem***](https://www.linkedin.com/in/redwanmeslem/?ref=blog.lido.fi) ***\- Executive Director at the Enterprise Ethereum Alliance*** *“For institutions, the next phase of Ethereum is about moving from observation to operational use. EEA’s decision to engage directly with staking infrastructure reflects that shift, and we’re pleased to see stETH included as part of that process.”* [***Kean Gilbert***](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi) ***\- Head of Institutional Relations at Lido Ecosystem Foundation*** ## **stETH as Institutional Ethereum Infrastructure** Lido is Ethereum's [largest liquid staking protocol](https://dune.com/lido/lido-morning-coffee-dashboard?ref=blog.lido.fi). stETH is a liquid representation of staked ETH that remains usable across custody, collateral, DeFi, and access workflows while the underlying ETH is staked. For many institutions, custody determines what is viable. stETH's availability through custody and infrastructure providers such as [Bitgo](https://blog.lido.fi/bitgo-becomes-first-us-custodian-to-enable-native-eth-staking-via-lido/), [Fireblocks](https://blog.lido.fi/bringing-liquid-staking-to-the-fireblocks-network/), and [Copper](https://blog.lido.fi/lido-brings-liquid-staking-to-coppers-clearloop/) means treasury teams can engage in liquid staking within platforms and processes they already use. [WisdomTree's European staked ETH ETP](https://blog.lido.fi/wisdomtree-launches-first-fully-staked-eth-etp-backed-by-steth/) shows stETH's role in regulated access products, while its use as collateral across DeFi reflects its role in onchain market infrastructure. Institutions also need visibility into how the infrastructure works. Public protocol data, governance records, node operator performance reporting, and ecosystem analytics help show how the Lido protocol functions in practice. For treasury teams, liquidity is not a nice-to-have. A position needs to work in practice, not just on paper. stETH's deep liquidity supports treasury management, collateral use, and access product design. ## **What This Means For ETH Treasuries** For ETH treasuries, the relevance is practical. The question is not only whether to stake, but whether the staking route fits existing constraints around custody support, liquidity planning, reporting, collateral use, and governance visibility. stETH brings staking participation into infrastructure institutions already use, rather than forcing staking to sit outside existing workflows. EEA's deployment through Lido shows that model being used by one of Ethereum’s longest-standing institutional organizations. To discuss how stETH fits your treasury strategy, [get in touch with the Lido Institutional team](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi). ### Lido Receives Web3SOC Certification for Institutional DeFi Diligence URL: https://blog.lido.fi/lido-receives-web3soc-certification-for-institutional-defi-diligence/ Last updated: 2026-05-06T13:47:25.000Z Lido has received [Web3SOC certification from Cantina](https://cantina.xyz/web3soc?ref=blog.lido.fi), following a point-in-time assessment covering governance, financial resilience, security, and legal and compliance posture. Web3SOC exists because traditional diligence frameworks were not designed to assess protocols where governance is onchain, operations are distributed, and technical considerations cover smart contracts, validator infrastructure, and key management. Developed by Cantina, a security firm specialising in DeFi protocol assessment, Web3SOC shares structural principles with SOC 2 and ISO 27001 while covering areas those standards do not reach The certification sits alongside stETH's A+ ratings in both [Staking Rewards' risk framework](https://www.stakingrewards.com/defi/0xae7ab96520de3a18e5e111b5eaab095312d7fe84?ref=blog.lido.fi) and [Credora's DeFi ratings framework](https://reports.credora.io/steth/REP-STETH-20260317-V1.pdf?ref=blog.lido.fi), giving institutional teams independent, third-party reference points for reviewing protocol, market, and DeFi risk. ## **What The Assessment Covered** Cantina assessed Lido DAO and the Lido protocol across operational, financial, security, and regulatory domains: - **Operational:** governance processes, contributor coordination, and operating practices. - **Financial:** economic design, capital resilience, and related financial controls. - **Security:** smart contract security, application robustness, infrastructure resilience, attack resistance capabilities, and incident response procedures. - **Regulatory:** legal and compliance posture, including relevant institutional considerations. The report gives institutional teams a structured assessment across each domain, designed to support internal risk, compliance, and counterparty review processes. It is available on request to institutional evaluators and counterparties conducting diligence. ## **What This Means for Institutional Evaluators** stETH already backs [a regulated ETP on major European exchanges](https://blog.lido.fi/wisdomtree-launches-first-fully-staked-eth-etp-backed-by-steth/), is accepted as collateral on institutional venues, and is integrated across leading custody providers, centralized exchanges, and DeFi applications. The teams behind those integrations need consistent, reviewable information about the infrastructure they depend on. Web3SOC gives those teams a single structured assessment covering all four areas, designed to fit alongside their existing diligence workflows. Instead of assembling information from scattered public materials or running bespoke review processes, teams can work from a single assessment designed for institutional review. With over $21 billion in ETH staked through the Lido protocol, and stETH increasingly embedded in regulated products and institutional workflows, the diligence record around Lido matters. Web3SOC certification adds a structured, third-party-assessed layer to that record, helping institutional teams review the governance, security, resilience, and transparency behind stETH. Institutional evaluators [can request access](https://cantina.xyz/contact/web3soc?ref=blog.lido.fi) to the full private Web3SOC certification report from Cantina. ### Exiting ~7,000 Validators: A Case Study in Optimizing Ethereum Validator Exits URL: https://blog.lido.fi/exiting-7k-validators-a-case-study-in-optimizing-ethereum-validator-exits/ Last updated: 2026-04-30T12:30:32.000Z In December 2025, [A41 announced their decision to wind down validator operations](https://research.lido.fi/t/a41-node-operator-intention-to-wind-down-operations-request-for-dao-vote/10954?ref=blog.lido.fi) and, as a part of this wind down, conclude its participation as a Lido Curated Node Operator (NO). While A41 provided a reasonable amount of time as a heads up, it did request that it would like to deprecate all infrastructure by January 31, 2026, thus contributors from the Lido Analytics workstream modeled an exit strategy for the 6,918 validators A41 operated to minimize staking reward loss during the process. This strategy combined coordinated voluntary exits, batch execution, and sweep-cycle-aware timing, resulting in: - **4.42x reduction in reward loss** compared to the \~78 ETH organic exits baseline - **Total losses brought down to 17.64 ETH** by a batched execution approach - Average skimming **wait time reduced from the historical 4.5 days to \~0.8 days** The case study below presents the approach and key assumptions, operational execution, and lessons learned from the exit. ## How It Started Shortly after the announcement, Lido contributors initiated the [governance process](https://vote.lido.fi/vote/195?ref=blog.lido.fi#:~:text=Set%20A41%20Node%20Operator%20soft%20target%20validators%20limit%20to%200%2C%20as%20requested%20on%20the%20Forum.%20Item%201.3.) to facilitate the operator’s exit, during which the DAO approved setting A41’s targetValidatorsCount parameter to 0. This parameter sets the target value for the number of validators to be deposited to a specific Node Operator, while 0 signals the allocation mechanism should direct exit requests to deposited validators run by that NO. ## Exit Parameters When the exit process was being planned, several network parameters were particularly relevant in determining both the expected exit timeline and the protocol cost associated with validator withdrawals: - **Ethereum network APR:** 3.0% - **Validator sweep cycle:** 8.5 days - **Average validator skimming time:** 4.5 days - **Maximum exit churn limit:** 256 ETH per epoch - **Validator queue length:** - **Entry queue:** \~9 days - **Exit queue:** \~19 days For a refresher on the terms above, please see [Ultimate Guide to ETH Staking Withdrawals by Consensys](https://consensys.io/shanghai-capella-upgrade?ref=blog.lido.fi). ### A41 Validators At the time of the announcement, A41 operated 6,918 active validators within the Curated Module (2.51% of Lido deposited validators). The majority of A41 validators were clustered within a similar index range. The distribution of validators’ indices plays an important role in shaping the exit strategy. The index determines when validators become eligible for withdrawal in accordance with Ethereum sweep cycle. During this cycle, the blockchain *sweeps* through the validator set (starting from the validator with index 0), and in each slot identifies up to 16 validators eligible for either a partial or full withdrawal. In the next slot, the process continues from where it left off, progressing sequentially through the whole Ethereum validator set. Once the last validator is reached, the cycle restarts from the beginning. Given their index distribution, a significant portion of A41 validators entered the sweep pipeline at roughly the same point in the cycle, around the transition from the third to the fourth day, as illustrated below. ![](https://blog.lido.fi/content/images/2026/04/image-1.png) ## Exit Modelling And Planning To determine the most efficient exit strategy for minimizing staking reward loss under A41’s requested wind-down timeline, contributors from the Lido Analytics workstream evaluated potential exit scenarios and their impacts on execution timing and rewards, that could be foregone during the process. ### Organic Exit Capacity To determine whether these exits could occur organically, contributors analyzed historical Lido withdrawals, simulating how many validators could reasonably be expected to exit through user-initiated withdrawals. ![](https://blog.lido.fi/content/images/2026/04/image-2.png) Based on historical data until December 1, 2025, and 1,000 simulations. Based on 30-day historical data and mean values, exiting the entire A41 validator set organically would take approximately 80 days. However, the targeted operator wind-down date of January 31, 2026, was only 52 days away. Longer historical datasets resulted in higher projections, however, these estimates were considered less representative. - 90-day data: \~8,016 validators - 360-day data: \~12,281 validators Thus, it became clear that relying on organic exits alone would be unlikely to complete the wind-down within the required timeframe. Additionally, the A41 validator index distribution was highly concentrated. Contributors concluded that completing the exit in time would require voluntary exits. The challenge was to minimize financial impact on the Lido protocol while maintaining operational feasibility. ### Exit Optimization Strategy One baseline scenario assumed that all A41 validators would immediately begin exiting. This approach would likely have resulted in the majority of exits being completed by early January. Taking into account the validator skimming time, the total estimated missed rewards would have been approximately 78 ETH, or 10.5% of the daily protocol rewards. Based on the validator index distribution and current sweep cycle duration, Lido Analytics contributors modeled the range of potential exit windows of A41 validators: ![](https://blog.lido.fi/content/images/2026/04/image-3.png) Based on calculations performed on December 8–10, 2025. As soon as the validator withdrawal process depends on the validator sweep cycle, poorly timed exits can significantly increase the time validators spend waiting to be skimmed, resulting in unnecessary reward losses. Thus, the **key optimization objective** was to minimize the time between the withdrawable and sweep epochs for each validator. On the chart above, this can be reflected by aligning the expected withdrawal timing (blue bar) with the validator sweeps (orange), minimizing the delay gap between them. Simulations suggested that if exits could be triggered with a predefined timing: - Extreme precision would result in \~35 ETH total missed rewards - 0.5 day tolerance 一 \~45 ETH However, executing \~7,000 precisely timed exits individually would require extensive manual intervention and would be operationally inefficient. To address this, contributors proposed executing voluntary exits in coordinated batches. **Batch Exit Design** The batch approach introduced several operational parameters to balance precision, safety, and operational simplicity. - A *safety gap* of 60–225 epochs (approximately 6–24 hours) was introduced between requesting the exit and the expected withdrawal eligibility window. This buffer should have mitigated potential risks, including large parallel exits initiated by others, partial withdrawals, and minor inaccuracies in sweep cycle predictions. - A *maximum batch size* of 1,800 validators per day, which corresponds to the maximum number of validators that can exit Ethereum per day, was also introduced. **Exit Scheduling Tooling** To implement this batch approach, Analytics contributors suggested deploying a script designed to determine the optimal timing for voluntary exits. The scheduling logic incorporated several real-time network parameters, including: 1. Current epoch 2. Current position of the skimming pointer 3. Size of the validator exit queue Also, contributors introduced the *skimming acceptance* level of 0.5 days (12 hours). This parameter made it possible to identify validators for exit when their projected time between the withdrawable and skimming epochs fell below the skimming acceptance threshold. It should have reduced projected exit losses by \~8.6 ETH. Based on these, the script generates an exit distribution order tailored to a specific Node Operator. After review and adjustment, the results can be exported as a final grouping file, enabling the NO to request exits while continuously monitoring validators’ behavior throughout the process. ## Exiting 200,000+ ETH A41 implemented its own script to call batch voluntary exits. The script was triggered manually during the defined exit windows. Before executing all batches’ exits, a test batch was used to validate the approach. ### Test Batch The first batch consisted of 181 validators and was exited as a test run to confirm that the workflow and tooling behaved as expected. It intentionally included validators with highly dispersed validator indices, because splitting them would have increased operational complexity without improving efficiency. The exit script successfully processed the non-sequential validator set; the actual amount of missed rewards was 2.23 ETH. ### Coordinated Batch Execution Following the successful test batch, four additional batches were planned to exit. The operational workflow was structured as follows: 1. Lido Analytics contributors defined and shared all validator batch details, including their execution order and approximate target timelines. 2. Approximately 24 hours before execution, contributors confirmed with A41 the initiation of each upcoming batch. 3. A41 triggered the exit script within a \~12-hour exit window, aligning exits with the predicted optimal timing. **Batch #2** The second batch consisted of 1,792 validators and was executed one day after the test. Analytics contributors forecasted that if exits were triggered within the predicted epoch window, the average skimming wait time should have been approximately 226.8 epochs. Following execution, the actual skimming time was 244 epochs, demonstrating strong alignment between the model and real network conditions. ![](https://blog.lido.fi/content/images/2026/04/image-4.png) **Batch #3** The third batch included 1,708 validators and was scheduled for mid-January. Modeling estimated 2.78 ETH of missed rewards. ![](https://blog.lido.fi/content/images/2026/04/image-5.png) **Batch #4** The fourth batch was the largest, consisting of 1,800 validators. Predicted skimming time was 215 epochs, actual 一 211 epochs, with the resulting missed rewards totaling 4.37 ETH. One of the scenarios suggested exiting all remaining validators (3,237) within Batch #4\. However, the simulation showed that doing so would have resulted in \~8.16 ETH missed rewards. ![](https://blog.lido.fi/content/images/2026/04/image-6.png) **Batch #5** Instead, the remaining validators were divided into Batch #4 and #5, allowing exits to align more closely with the sweep cycle. This reduced the final batch's missed rewards to 3.15 ETH. ### Batch Results Overview The results across all batches are summarized in the table below. ![](https://blog.lido.fi/content/images/2026/04/image-7.png) \* A test batch that included validators with highly dispersed indices. The coordinated process resulted in a predictable and well-distributed pattern of validator exits over the intended timeframe. ![](https://blog.lido.fi/content/images/2026/04/image-8.png) By aligning validator exits with the skimming pointer and exit queue conditions, Lido contributors together with the A41 team achieved a drastic reduction in rewards leakage. Key results: - **Cost reduction**: Compared with the estimated organic exit baseline of 78 ETH, the scheduled exit strategy reduced reward loss byapproximately **4.42x**. - **Efficiency improvement**: Total realized skimming losses were brought **down to 17.64 ETH**, substantially outperforming the initial modeled 35-45 ETH range for “precise” exits, enabled by a batched execution approach. - **Time optimization**: Average skimming wait time was reduced from the historical 4.5 days to approximately **0.8 days**. ![](https://blog.lido.fi/content/images/2026/04/image-9.png) - **Consistency across batches.** The average loss per batch was approximately **3.53 ETH**, demonstrating consistent efficiency regardless of the batch size. ![](https://blog.lido.fi/content/images/2026/04/image-10.png) ## Ethereum Queue Time Impact One of the fundamental challenges when planning large-scale exits is the unpredictability of Ethereum’s validator queues. While historical data can provide useful patterns, queue conditions can shift rapidly, thus being a dynamic parameter that cannot be predicted with certainty. Although Lido contributors performed extensive analysis using historical queue patterns, during the A41 exit process the Ethereum landscape evolved in ways that were difficult to anticipate. At the time the exit plan was designed, the exit queue was approximately 18.64 days. By the time it was actually executed, the queue had decreased to less than one day, allowing more accurate prediction of when voluntary exits should be initiated. The activation queue, however, evolved in the opposite direction. By the time the first test batch was exited, the activation queue had already increased to 18.88 days. As the exit process unfolded, the activation queue continued to expand significantly, with the average activation queue time reaching \~42.8 days before validators could be re-activated. ![](https://blog.lido.fi/content/images/2026/04/image-11.png) The chart is based on [validatorqueue.com](http://validatorqueue.com/?ref=blog.lido.fi). Data provided by [beaconcha.in](http://beaconcha.in/?ref=blog.lido.fi). ### Impact on Optimization Gains The coordinated exit strategy reduced the average skimming wait time from \~4.5 days to 0.8 days, resulting a substantial improvement in withdrawal efficiency. However, it was ultimately offset by the unexpected growth of the activation queue. This outcome highlights an important lesson: > *Even highly optimized validator exit strategies remain subject to the broader dynamics of network-level parameters.* Despite these, the coordinated exit process still significantly reduced foregone rewards during withdrawal. ## Further Implications The actual exit results proved a substantial difference in foregone staking rewards between organic exits and a scheduled exit strategy. While the used approach was tailored to a specific Node Operator situation and network conditions, the underlying principles are broadly applicable and can be used by: - Protocols managing large validator sets; - Professional staking providers; - Institutional or large-scale stakers; - NOs coordinating validator rotations or consolidations. The table below illustrates the estimated difference between organic exit behavior and precisely timed exits in the predefined epochs. ![](https://blog.lido.fi/content/images/2026/04/image-12.png) For example: - Exiting 10,000 ETH organically would result in \~3.45 ETH in missed rewards, while a precisely timed exit could reduce this by 23 times. - At 50,000 ETH, the difference grows to \~16.5 ETH saved. - At 100,000 ETH, \~95.56% of potentially lost rewards could be preserved through optimized exit timing. As the number of validator scales into the hundreds of thousands of ETH—as seen in the A41 exit case—these efficiency gains become even more significant. ### Lessons to Share The A41 exit case provides several operational insights: **1\. Exit timing matters** Validator exits are not instantaneous events. The timing between exit request, skimming, and withdrawal processing can materially affect the amount of rewards forfeited during the process. **2\. Validator index distribution impacts exits** Understanding index distribution can help to plan batch scheduling and exit sequencing to better align validator exits with the skimming and withdrawal cycles. **3\. Batching improves operational efficiency** For a large number of validators, attempting to trigger exits individually may not be cost-efficient. Batch-based exit strategies allow balancing sweep cycle alignment with operational simplicity. **4\. Data-driven coordination improves outcomes** This exit case illustrates the value of combining historical Ethereum data analysis and continuous monitoring to remain closely aligned with network dynamics while minimizing lost rewards. **5\. Network queues remain unpredictable** Validator queues are a dynamic network variable. Planning should always incorporate monitoring and flexibility, including buffers for unexpected delays, rather than relying solely on static projections. ## Closing Thoughts The coordinated exit of \~7,000 validators demonstrates that careful modeling, batch scheduling, and real-time coordination significantly reduced reward loss compared with an organic flow, while maintaining predictable validator operations. As Ethereum staking continues to scale, similar approaches may become increasingly relevant for validator lifecycle management, including validator rotations, infrastructure migrations, organic withdrawals, and large-scale exits. ### Lido V3 & Copper: Accessing stVaults via CopperConnect URL: https://blog.lido.fi/lido-v3-copper-accessing-stvaults-via-copperconnect/ Last updated: 2026-04-29T13:06:33.000Z [Copper](https://copper.co/en?ref=blog.lido.fi) is an institutional digital asset custodian, known for its MPC-based custody infrastructure. Copper [is one of the Qualified Custodians](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi) supporting stVaults, Lido protocol's modular staking infrastructure. stVaults introduce a single-operator architecture that enables large staking entities — including institutions, ETFs, ETPs, and asset managers — to deploy dedicated, customizable vaults with control over validator choice, fee terms, and infrastructure, while retaining on-demand liquidity through optional stETH minting. Compared to pooled staking approaches, stVaults are designed to address the control-versus-liquidity tradeoff — enabling stakers to run validators with their chosen counterparty, define geographic or jurisdictional parameters, and configure MEV routing and insurance mandates to meet specific internal risk and policy requirements. Copper supports stETH and wstETH in custody. Copper users can create and manage an stVault from their existing Copper Organisation and Account via CopperConnect — the same setup they already use for other on-chain interactions. ## **How It Works** The connection runs through **CopperConnect**, Copper's browser extension. Setup: 1. In the CopperConnect extension: log in, then select the Organisation and Account to connect. 2. [In the stVaults Web UI](https://stvaults.lido.fi/?ref=blog.lido.fi): click Connect wallet, then Browser in the dialog window. Your CopperConnect wallet address will appear as connected, and you can create and manage stVaults. For day-two operations — health monitoring, emergency procedures, voluntary rebalancing and vault closure — see the linked guides below. Full setup steps are in the [CopperConnect user guide](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/copper?ref=blog.lido.fi). This flow is for vault owners — institutions that want to create and operate their own vault. Support varies by jurisdiction, entity, and onboarding scope. Before creating a vault, teams should confirm availability and policy settings with their Copper account manager. ## **Security & Risk** Standard Ethereum staking risks apply — for the full breakdown, see Lido's [Risk Assessment Framework for stVaults](https://research.lido.fi/t/risk-assessment-framework-for-stvaults/9978?ref=blog.lido.fi). The following measures have been implemented to support the security of Lido V3\*: - **Smart contracts.** Lido V3 stVaults smart contracts have undergone audits by [Certora](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi) (including [formal verification](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Formal%20Verification%20Report%20-%2012-2025.pdf?ref=blog.lido.fi)), [MixBytes](https://github.com/lidofinance/audits/blob/main/MixBytes%20Lido%20V3%20Security%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Consensys Diligence](https://github.com/lidofinance/audits/blob/main/Consensys%20Diligence%20Lido%20V3%20Security%20Audit%20-%2011-2025.pdf?ref=blog.lido.fi), [Composable Security](https://github.com/lidofinance/audits/blob/main/Composable%20Security%20Lido%20V3%20Oracle%20V7%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Ackee Blockchain](https://github.com/lidofinance/audits/blob/main/Ackee%20Blockchain%20Vault%20Wrapper%20Report%2001-2026.pdf?ref=blog.lido.fi), and [Sigma Prime](https://github.com/lidofinance/audits/blob/main/Sigma%20Prime%20-%20Lido%20BLS%20Library%20Security%20Assessment%20Report%20v2.0%20-%2001-2026.pdf?ref=blog.lido.fi). An ongoing [Immunefi bug bounty](https://docs.lido.fi/security/bugbounty?ref=blog.lido.fi) offers white hats up to $2M in rewards. - **Custody-side controls.** Interactions with stVaults contracts are performed via CopperConnect. - **Built-in operational controls.** stVaults’ design allows Vault Owners to supply/withdraw ETH, mint/repay stETH, trigger [voluntary rebalancing and vault closure](https://docs.lido.fi/run-on-lido/stvaults/operational-and-management-guides/voluntary-rebalancing-and-vault-closure?ref=blog.lido.fi) (available in May 2026 on the Web UI), trigger ETH withdrawals from validators (available in April 2026 on the Web UI), and follow the [Health Emergency Guide](https://docs.lido.fi/run-on-lido/stvaults/operational-and-management-guides/health-emergency-guide?ref=blog.lido.fi) when vault health parameters fall below thresholds. *\* Audits, bug bounties, and operational controls are intended to reduce but do not eliminate underlying protocol or market risks. Additional risks may remain or be unidentified.* For institutions, the key point is that stVaults can be operated with a familiar security model: on-chain actions may be gated by your existing Copper policies, while Lido V3 contracts have undergone audits and include clearly defined emergency procedures. Teams should still run their own diligence on smart-contract, operational, and regulatory risks, and ensure internal approvals and monitoring are in place before going live. [Book a call](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi) with the Lido Institutional team for further details. ## **Further reading** - [Qualified Custodians overview](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi) - [Copper integration guide](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/copper?ref=blog.lido.fi) - [stVaults documentation](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [stVaults Web UI](https://stvaults.lido.fi/?ref=blog.lido.fi) ### Lido V3 & Fireblocks: Accessing stVaults via WalletConnect URL: https://blog.lido.fi/lido-v3-fireblocks-accessing-stvaults-via-walletconnect/ Last updated: 2026-04-23T17:45:13.000Z [Fireblocks](https://www.fireblocks.com/?ref=blog.lido.fi) is a digital asset and stablecoin infrastructure company used across institutional crypto — by fintechs, exchanges, trading firms, banks, and Web3 businesses — to meet the custody and policy requirements those institutions operate under. Fireblocks [is one of the qualified custodians](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi) supporting stVaults, Lido protocol's modular staking infrastructure. stVaults introduce a single-operator architecture that enables large staking entities — including institutions, ETFs, ETPs, and asset managers — to deploy dedicated, customizable vaults with control over validator choice, fee terms, and infrastructure, while retaining on-demand liquidity through optional stETH minting. Compared to pooled staking approaches, stVaults are designed to address the control-versus-liquidity tradeoff — enabling stakers to run validators with their chosen counterparty, define geography or jurisdictional parameters, and configure MEV routing and insurance mandates to meet specific internal risk and policy requirements. Fireblocks launched a [native Lido integration](https://www.fireblocks.com/blog/fireblocks-x-lido-institutional-bringing-liquid-staking-to-the-fireblocks-network?ref=blog.lido.fi) in September 2024 for Lido Core, the liquid staking product. stVaults are supported too: Fireblocks users can create and manage stVaults using stVaults Web UI via WalletConnect, subject to their existing custody setup. ## **How It Works** The connection runs over WalletConnect. A Fireblocks user opens the stVaults Web UI, selects WalletConnect in the wallet connection interface, and scans the QR code using the Web3 Wallet section of the Fireblocks mobile app. Once connected, the account can: - Create and manage stVaults - Monitor vault health - Execute emergency procedures Full setup steps are in the [Fireblocks integration guide](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/fireblocks?ref=blog.lido.fi). This flow is for vault owners — institutions that want to create and operate their own vault. Support varies by jurisdiction, entity, and onboarding scope. Before creating a vault, teams should confirm availability and policy settings with their Fireblocks account manager. ## **Security & Risk** Standard Ethereum staking risks apply — for the full breakdown, see Lido's [Risk Assessment Framework for stVaults](https://research.lido.fi/t/risk-assessment-framework-for-stvaults/9978?ref=blog.lido.fi). The following measures have been implemented to support the security of Lido V3\*: - **Smart contracts.** Lido V3 stVaults smart contracts have undergone audits by [Certora](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi) (including [formal verification](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Formal%20Verification%20Report%20-%2012-2025.pdf?ref=blog.lido.fi)), [MixBytes](https://github.com/lidofinance/audits/blob/main/MixBytes%20Lido%20V3%20Security%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Consensys Diligence](https://github.com/lidofinance/audits/blob/main/Consensys%20Diligence%20Lido%20V3%20Security%20Audit%20-%2011-2025.pdf?ref=blog.lido.fi), [Composable Security](https://github.com/lidofinance/audits/blob/main/Composable%20Security%20Lido%20V3%20Oracle%20V7%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Ackee Blockchain](https://github.com/lidofinance/audits/blob/main/Ackee%20Blockchain%20Vault%20Wrapper%20Report%2001-2026.pdf?ref=blog.lido.fi), and [Sigma Prime](https://github.com/lidofinance/audits/blob/main/Sigma%20Prime%20-%20Lido%20BLS%20Library%20Security%20Assessment%20Report%20v2.0%20-%2001-2026.pdf?ref=blog.lido.fi). An ongoing [Immunefi bug bounty](https://docs.lido.fi/security/bugbounty?ref=blog.lido.fi) offers white hats up to $2M in rewards. - **Institutional approval workflows.** Onchain actions initiated from the stVaults Web UI route through Fireblocks's institutional approval workflows — where those actions are subject to the user’s internally defined approvals and custody policies ( see [Lido integration docs](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/fireblocks?ref=blog.lido.fi)) - **Built-in operational controls.** stVaults’ design allows Vault Owners to supply/withdraw ETH, mint/repay stETH, trigger [voluntary rebalancing and vault closure](https://docs.lido.fi/run-on-lido/stvaults/operational-and-management-guides/voluntary-rebalancing-and-vault-closure?ref=blog.lido.fi) (available in May 2026 on the Web UI), trigger ETH withdrawals from validators (available in April 2026 on the Web UI), and follow the [Health Emergency Guide](https://docs.lido.fi/run-on-lido/stvaults/operational-and-management-guides/health-emergency-guide?ref=blog.lido.fi) when vault health parameters fall below thresholds. *\* Audits, bug bounties, and operational controls are intended to reduce but do not eliminate underlying protocol or market risks. Additional risks may remain or be unidentified.* For institutions, the key point is that stVaults can be operated within a familiar security model: on-chain actions may be gated by your existing Fireblocks policies, while Lido V3 contracts have undergone audits and include clearly defined emergency procedures. Teams should still run their own diligence on smart contract, operational, and regulatory risks, and ensure internal approvals and monitoring are in place before going live. [Book a call ](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi)with the Lido Institutional team for further details. ## **Further Reading** - [Qualified Custodians overview](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/?ref=blog.lido.fi) - [Fireblocks integration guide](https://docs.lido.fi/run-on-lido/stvaults/qualified-custodians/fireblocks?ref=blog.lido.fi) - [stVaults documentation](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [stVaults Web UI](https://stvaults.lido.fi/?ref=blog.lido.fi) - [Fireblocks x Lido Institutional (2024)](https://www.fireblocks.com/blog/fireblocks-x-lido-institutional-bringing-liquid-staking-to-the-fireblocks-network?ref=blog.lido.fi) — the Lido Core native integration ### Validator Consolidation: A Capital-Efficient Way to Migrate to stVaults URL: https://blog.lido.fi/validator-consolidation-a-capital-efficient-way-to-migrate-to-stvaults/ Last updated: 2026-04-08T12:37:54.000Z As Ethereum's validator entry queue stretches past 50 days, migrating existing stake into stVaults through the standard exit-and-redeposit path means leaving ETH idle – and leaving rewards on the table. The Consolidation mechanism, introduced with Pectra ([EIP-7251](https://eips.ethereum.org/EIPS/eip-7251?ref=blog.lido.fi)), offers a more capital-efficient alternative: transfer validator balances directly on the consensus layer, keeping most of your stake productive throughout the transition. For operators and institutions moving into stVaults to access stETH liquidity and DeFi integrations, consolidation means you can start benefiting from stVault features without sacrificing weeks of rewards to get there. ## **Earning Rewards While Migrating** The standard migration path – exiting validators and re-depositing ETH into stVaults – puts all ETH through both the exit and entry queues. The longer the queues, the more rewards are missed on idle capital between the withdrawal sweep cycle and the validator entry queues. Consolidations enable operators to transfer a validator balance directly between validators (from source to target validators) on the consensus layer, without withdrawing and re-entering the deposit queue later. ![](https://blog.lido.fi/content/images/2026/04/data-src-image-eb649117-2ba3-4ee3-ac4f-2a0fb51bcb87.png) ## **How Consolidations Work** 1. **Start activation of the target validator(s) in the stVault.** Deposit the minimum required amount of ETH to create one or more target 0x02 validators (32 ETH per validator). The required ETH can come from exiting an existing validator or from other liquid ETH. Each validator now can hold up to 2,048 ETH of effective balance, so the number of targets depends on the total stake being migrated. This minimum required deposit enters the standard entry queue. 2. **Continue earning on active (source) validators.** While the stVault validator(s) wait for activation, existing validators keep operating and earning rewards as usual. 3. **Consolidate once the targets are active.** Transfer the remaining validators' effective balance into the stVault validator(s) directly on the consensus layer, bypassing the entry queue entirely. After consolidation is initiated, source validators continue earning rewards until their exit epoch. The stake is idle for just the \~27-hour withdrawal delay (256 epochs), after which the balance transfers to the target and begins earning again. Only the initial deposit sits idle during the long entry queue. The rest of the stake keeps earning rewards while waiting for consolidation. ![](https://blog.lido.fi/content/images/2026/04/Consolidation.png) ## **Validator Consolidations In Practice** Under [EIP-7251](https://eips.ethereum.org/EIPS/eip-7251?ref=blog.lido.fi), a single validator can hold up to 2,048 ETH of effective balance. For operations above that threshold, multiple target validators are needed. The formula is straightforward: total ETH ÷ 2,048, rounded up. Consider an operator with 10 validators (320 ETH). They exit one validator, withdraw 32 ETH, and deposit it to create a single stVault target validator. While that target waits in the entry queue (\~50 days), the remaining nine validators (288 ETH) continue earning rewards. Once the target activates, consolidation is initiated — source validators keep earning until their exit epoch, and the only idle period is the \~27-hour withdrawal delay before the balance lands on the target. The result is one stVault validator with a 320 ETH effective balance, with only 32 ETH idle during the long wait. ### **The same approach scales:** An operator with 100 validators (3,200 ETH) would exit two validators, deposit 64 ETH to create two stVault targets (both enter the queue simultaneously — one wait period, not two), and consolidate the remaining 98 validators across them once active. The 3,136 ETH keeps earning throughout the \~50-day wait, with only 64 ETH in the waiting line. The end state: two stVault validators at 1,600 ETH each — preserving roughly 12 ETH in rewards compared to withdrawing and re-depositing everything. ![](https://blog.lido.fi/content/images/2026/04/Table-1.png) ## **Requirement & Limitations** Consolidation has specific conditions and trade-offs. Source validators must have been active for at least 256 epochs. Operators with active validators and standard withdrawal credentials can use them as consolidation sources. Full requirements, limitations, and a step-by-step guide are available on[ Lido Docs](https://docs.lido.fi/run-on-lido/stvaults/tech-documentation/consolidation/?ref=blog.lido.fi). ## **Next Steps** The full technical guide is available in the[ stVaults consolidation documentation](https://docs.lido.fi/run-on-lido/stvaults/tech-documentation/consolidation/?ref=blog.lido.fi). - [Learn more](https://lido.fi/stvaults?ref=blog.lido.fi) about stVaults[ ](https://lido.fi/stvaults?ref=blog.lido.fi)[and start building](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [Join V3 builder group in Telegram](https://t.me/lidostvaults?ref=blog.lido.fi) [Contact the stVaults team](https://tally.so/r/mVrkZa?ref=blog.lido.fi). ### Lido Earn: First-Loss Protection & DAO Alignment URL: https://blog.lido.fi/lido-earn-first-loss-protection-dao-alignment/ Last updated: 2026-03-27T11:44:11.000Z Lido DAO has approved a [$5 million treasury allocation](https://research.lido.fi/t/lido-earn-competing-on-trust-5m-treasury-allocation/11228?ref=blog.lido.fi) to [Lido Earn](https://stake.lido.fi/earn?ref=blog.lido.fi), introducing a first-loss protection mechanism designed to strengthen alignment between the protocol and its users. With the **Lido Earn First-Loss Protection mechanism**, dedicated Lido protocol reserves now act as protection to cover user deposits. This puts in place an onchain alignment mechanism to protect users in case of severe scenarios and to further align the DAO with the Lido Earn initiative. The allocation is deployed directly into the vaults - $3 million in wstETH into EarnETH and $2 million in USDC into EarnUSD - on the same terms as any other deposit. Lido DAO pays the same fees, holds the same vault shares, and is exposed to the same risks. > Lido Earn: First-Loss Protection🛡️ > > Dedicated protocol reserves now act as first-loss protection to cover user deposits. > > Live on [https://t.co/F7JRWtm1Bq](https://t.co/F7JRWtm1Bq?ref=blog.lido.fi). > > ↓ [pic.twitter.com/GEBbgLW47p](https://t.co/GEBbgLW47p?ref=blog.lido.fi) > > — Lido (@LidoFinance) [March 19, 2026](https://twitter.com/LidoFinance/status/2034651097072070680?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) ## **First-Loss Protection: What This Means** Every vault in DeFi carries risk. Lido Earn is designed to manage that risk through curated strategy selection, DAO oversight, and independent security practices, but no vault can guarantee that losses will never occur. What the DAO can do is position its own capital as a buffer between depositors and losses. Here is how it works. The DAO holds vault shares from its $5M allocation alongside all other participants. If a confirmed loss occurs, the DAO’s shares can be reduced, lowering total supply and offsetting losses for remaining depositors. In effect, losses are absorbed through the DAO’s position before they reach other users. This mechanism is mandate-based, not discretionary. The conditions under which it activates, and the process for confirming and executing it, are defined in the governance proposal. Ongoing reporting will reflect the DAO’s position, any actions taken, and the state of the mechanism onchain. ## **DAO Alignment & Skin In The Game** It is important to be precise about what this is, and what it is not. This is not insurance, it is not a guarantee against losses, and the DAO’s $5M allocation does not make Lido Earn risk-free. DeFi strategies carry inherent risk, including smart contract exposure, market volatility, and protocol dependencies, and these remain. What this is: a clear, onchain commitment from the DAO that its capital is deployed alongside users, under the same conditions. The DAO does not receive preferential treatment. It cannot exit ahead of other depositors. Its position follows the same vault mechanics as everyone else, and in a confirmed loss scenario, it is the first to absorb the impact. ## **Lido Earn: DeFi Made Simple** Lido Earn lets you deploy ETH or stablecoins into curated DeFi strategies for daily, auto-compounded earnings with transparent allocations. - [**EarnETH**](https://stake.lido.fi/earn/eth?ref=blog.lido.fi) is a one-click DeFi vault by Lido, delivering auto-compounded ETH rewards. - [**EarnUSD**](https://stake.lido.fi/earn/usd?ref=blog.lido.fi) is Lido’s first stablecoin vault, offering USD-denominated rewards across strategies on Ethereum. Both EarnETH and EarnUSD are live at [stake.lido.fi/earn](http://stake.lido.fi/earn?ref=blog.lido.fi), with active First-Loss Protection. The full governance proposal, including mandate structure, risk controls, and reporting, is available on the [Lido Research forum](https://research.lido.fi/t/lido-earn-competing-on-trust-5m-treasury-allocation/11228?ref=blog.lido.fi). ### Recap: Lido Tokenholder Update: February 2026 URL: https://blog.lido.fi/recap-lido-tokenholder-update-february-2026/ Last updated: 2026-03-16T17:29:58.000Z The Poolside Tokenholder Update call on February 26 covered 2025 full-year results, the current financial outlook amid shifting market conditions, and Q2 focus areas. The session was led by **Vasiliy Shapovalov**, Executive Director at the Lido Labs Foundation; **Isidoros Passadis**, Chief of Staking at the Lido Ecosystem Foundation; and **Kate Zueva**, Deputy Chief Operating Officer of Lido Labs Foundation. Below is a recap of the key topics discussed. For the full conversation, [watch the recording](https://www.youtube.com/watch?v=eU7Em75Ph24&ref=blog.lido.fi). ## **Key Takeaways** - Despite market pressure, January and February closed operating positively. Lido Foundations' leadership is responding to current market conditions with cost discipline, maintaining a focus on long-term treasury surplus and financial control until the market stabilizes. - 2025 spend was \~10% lower YoY, reflecting active market adaptation (ETH outflows, APR compression, and shifting staking demand across the sector). - 2025 delivered major releases across staking, decentralization, governance, and institutional expansion — CSMv2, Lido V3, Dual Governance, WisdomTree ETP, and an expanded node operator set. - **Q4–Q1 results:** stVaults rollout, Lido Earn reached 61K ETH TVL, WisdomTree ETP launched (\~$36M AUM), DAO take rate increased from 4.96% to 6.11%, and custodian and ETF integrations are underway. - **Q2 2026 focus:** expected to expand the staking ecosystem with stVaults and ETPs, release MetaVaults (EarnETH / EarnUSD), and deploy automated buybacks. ## **Agenda** 1. Financials and market conditions 2. 2025 year wrap-up 3. Automated buybacks 4. Lido market state 5. Q2 2026 focus ## **Financials** [The 2026 EGG grant request](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0xf263b730f1c64d637ec27227121d7c5bd2189bf456514bad8225e960cf34d7b0) was based on a projected average ETH price of $2,712 — a cautious assumption at the time, with ETH trading above $3,000 in late December. ETH has since dropped to $2,020 as of February 25, putting pressure on the original DAO revenue projections. ### **2026 Assumptions vs. Current State** ![](https://blog.lido.fi/content/images/2026/03/data-src-image-875ae0e3-6c5e-4fcc-99a9-e82c2f6695c0.png) ### **Impact** At \~$2,000 ETH, projected net revenue from staking fees (including stVaults) drops from $45.3M to $33.4M, and total revenue from $53.9M to $40.6M. If all originally planned spending were maintained, the projected treasury gap would be approximately $20.5M. In practice, leadership is holding the line on spending, and February actuals are closing with a surplus. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-cce7944d-fddb-4c8e-858d-833c95db6701.png) These 2026 projections are illustrative estimates based on current market conditions and available information. They do not represent forecasts or guarantees of future performance, and actual outcomes may differ. ### **Cost Discipline** Spending increases are on hold until the market settles, while growth and discretionary spending tied to revenue diversification continue. ## **2025 Year Wrap Up** 2025 was a challenging year for the staking market, with ETH outflows, APR compression, and a shift in staking demand. The response involved: - **Foundations leadership and operational reset.** A new leadership team was introduced at the end of Q2 2025. - **Cost discipline enforced.** Total DAO expenses fell year over year and closed the year 25% below the initial 2025 grant request and 10% below 2024, as spending was actively adjusted to market conditions—reprioritizing protocol resilience, staking module economics, and diversified revenue sources. **Recap edition note:** The savings figure shown during the February 26 livestream was based on an incomplete grant total.Aggregating all DAO grants requested totals $77M, excluding the [2023 rewards share](https://snapshot.org/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x9279cd4addefdd9185d024f471f1a29561f61556ae209cdda5dffb1fd73b181e) used for deposit referrals. With deposit referrals classified as Cost of Revenue, total Foundations’ expenses come to $45.5M, with the year closing 41% below the requested amount.Grant requests for 2026 were submitted in a consolidated format to avoid similar issues and improve transparency. TRP allocations fall under the 22M LDO ceiling [approved by the DAO in 2023](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0xc00b48275e268f26b6cebf82322f281a44acaf679f6381dd612e278174671daf) and have not been included in annual grant requests since. In 2025, [the TRP was transferred](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x16ecb51631d67213d44629444fcc6275bc2abe4d7e955bebaf15c60a42cba471) to Lido Labs Foundation under amended terms. - **Strategic reprioritization:** Reduced reliance on pure staking growth and increased focus on protocol resilience, staking module economics, and diversified revenue sources, including the development of new products like Lido Earn. ### **2025 Financial Results** ![](https://blog.lido.fi/content/images/2026/03/data-src-image-3d379ba3-c5f8-4195-bb8a-dc080490c672.png) *Financial results do not include LDO-denominated LEGO grants totaling approximately $0.2m. These amounts will be reflected in subsequent reporting.* ### **Staking Achievements** - **Permissionless Community Staking Module (CSM & CSM v2).** Now the biggest permissionless staking module by ETH staked on Ethereum. - **Curated Module economics adjusted** by tokenholder vote to be more in line with the current staking market, increasing DAO effective take rate by 23% (from 4.96% to 6.11%). - **Lido V3 launched**, expanding the product line beyond Lido Core and creating potential for tailored staking products, including institutional use cases. - **WisdomTree ETP** (live since December) — the first liquid staking ETP in Europe, with over $36M AUM. - **Expanded Node Operator set**, onboarding hundreds of new operators, including home staker participation. ### **Governance and Tokenholder Alignment** - [Dual Governance](https://blog.lido.fi/dual-governance-101-explainer/): Safety mechanism for stETH holders. It reduces counterparty risk for stETH holders posed by contentious LDO-governance decisions and is expected to support long-term institutional adoption. Over the years, Lido DAO has treated alignment with tokenholders as a core design principle, reflected in its governance structure. As a result, LDO holders retain the following powers and safeguards: - All protocol fees flow [to the DAO Treasury](https://etherscan.io/address/0x3e40D73EB977Dc6a537aF587D48316feE66E9C8c?ref=blog.lido.fi) - Tokenholders retain exclusive authority over treasury allocations via governance process - The DAO retains defined oversight and intervention rights over the grant-funded legal entities (Foundations) - Foundations publish annual financial statements These efforts are acknowledged by third-party assessments: [See the Aragon Ownership Token Framework](https://otf.aragon.org/tokens/ldo?ref=blog.lido.fi). ### **Automated Buybacks** The automated buyback mechanism, [proposed on the Lido Research forum](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894?ref=blog.lido.fi) in November 2025, is currently under development for Q2 2026\. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-36386a7c-78d7-4d04-85fd-c8cf37004b75.png) The proposed mechanism uses automated buybacks rather than staking to avoid unequal outcomes for tokenholders across different tax jurisdictions. ### **Activation** **Parameters, subject to DAO approval** - ETH Price: > $3,000 - Revenue: > $40M - Annual Cap: $10M - Daily Cap: TBD The system acquires LDO using protocol-generated staking rewards and deploys an LDO/wstETH LP position held by the DAO via Aragon Agent. ### **Allocation** **Logic** - Total Allocation = min(50% x (Revenue - $40M), $10M) - LDO Buyback: 50% of the allocation - LP Deployment: remaining 50% converted to wstETH and paired with the LDO Introducing automated buybacks creates a direct link between protocol performance and LDO. It activates only when market and revenue conditions are favorable, and scales with the protocol's success: as DAO revenue grows, so does the buyback allocation. The Foundations are now focused on delivering that growth. ## **Lido Market State** ### **Staking Market Dynamics** Lido remains the largest staking protocol on Ethereum. Market share currently stands at 23%, with the decrease driven almost entirely by large players entering the staking market like BitMine and Grayscale. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-a19b9f78-eb73-4017-807b-7d794d3a4650.png) In absolute terms, [Lido TVL has been growing since Q4 2025](https://dune.com/queries/2859190/4782072?ref=blog.lido.fi). Staking segment sizes remain stable, with the main expansion in the low-risk institutional segment — expected to continue through 2026, [with BlackRock also exploring staking for its ETF](https://www.blackrock.com/us/individual/products/348532/ishares-staked-ethereum-trust-etf?ref=blog.lido.fi). stVaults and institutional staking products are the primary focus for this segment. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-1e38c23c-03d1-4749-bd62-87b504bb015f.png) ![](https://blog.lido.fi/content/images/2026/03/data-src-image-8a44c3a9-7be6-4eeb-8566-f1b717376e1f.png) ### **stVaults** stVaults Phase 2 went live on January 29, and Phase 3, enabling permissionless minting, went live on March 02\. The DeFi Wrapper is also live. Early adoption has been limited by the long staking entry queue (\~60 days) and integration timelines, as channel partners and builders work to launch end-user products. To mitigate this, a fee holiday on the infrastructure fee has been introduced for vaults above 250 ETH TVL. For a closer look at stVaults and institutional products built on them, [see the V3 Launch community call](https://www.youtube.com/live/RG%5FN4sT2NXQ?si=IFLBB5gtwfyGlv8k&ref=blog.lido.fi). ### **Lido Earn** [Lido Earn](https://stake.lido.fi/earn?ref=blog.lido.fi) holds approximately 61,000 ETH TVL (see queries [one](https://dune.com/queries/5725217/9292806?ref=blog.lido.fi) and [two](https://dune.com/queries/6155295/9842654?ref=blog.lido.fi)) with $1M ARR, as of February 26, 2026. In March 2026 two new MetaVaults went live - one for ETH rewards and one for USD - powered by Mellow Protocol. - [**EarnETH**](https://stake.lido.fi/earn/eth/deposit?ref=blog.lido.fi)**:** Abstracts strategy selection across existing and future vaults. Users can upgrade to Earn ETH without withdrawals, with curated allocations across strategies. - [**EarnUSD**](https://stake.lido.fi/earn/usd/deposit?ref=blog.lido.fi)**:** Launches with a conservative and experimental set of sub-strategies, allowing USDC and USDT deposits. Both will feature multi-curator setups with adaptive rebalancing, designed to offer wallet providers and other integrators a single, integration-friendly product. To improve the Earn experience for users, a DAO proposal to allocate $5m in treasury funds to Lido Earn vaults was approved, to align the DAO with the Earn initiative. This safeguards users in severe scenarios by putting in place an onchain, first-loss alignment mechanism. More information can be found [here](https://research.lido.fi/t/lido-earn-competing-on-trust-5m-treasury-allocation/11228?ref=blog.lido.fi). ### **Institutional Progress** - WisdomTree stETH ETP live, with \~$36M AUM - Custodian integration progress for stETH and stVaults - VanEck has filed for a Lido staked ETF in the US (filed, not yet approved) ## **Q2 2026 Focus** The main focus of the GOOSE-2026 strategic plan is growth. Q2 priorities: - Institutional staking momentum, scaling liquid staking as a practical path for staked liquidity - Expanding stVaults go-to-market - Rollout of EarnETH and EarnUSD meta-vaults - Developing automated buybacks ## **Q&A Highlights** ### **If VanEck approval is delayed, how exposed is the institutional thesis for the Lido protocol?** Probably between 25% and 30% exposed. There is a broad set of institutional efforts beyond a single ETF filing — the WisdomTree ETP in Europe, interest from other issuers in the US and other geographies, DAT vehicles considering liquid staking holdings, and stVaults enabling institutional-forward products. A delay most likely pushes the thesis into further years rather than diminishing it in aggregate over time. ### **How many LDO tokens does Labs hold?** The Foundations do not hold LDO (besides dust-level amounts left from operational processes like TRP distribution). They do not participate in voting and cannot impact DAO governance decisions. They operate grant-to-grant, with the DAO retaining full control over funding. Individual contributors have LDO allocated through the TRP program. ### **Will Lido Labs reduce costs or headcount if staking revenue declines further?** Reducing headcount is not the right move at this stage. If ETH were to drop significantly lower — to around $1,000 — or stay at $2,000 for a prolonged period, that would require reconsideration. The current view is that this is a temporary setback, and it does not make sense to act preventively. Still, cost discipline remains strict: spending is gated until market conditions settle, while growth investments continue selectively. --- For more insights, watch the full session covering detailed market share analysis, financials, and an extended Q&A. [Tokenholder Update call – Full Recording](https://www.youtube.com/live/eU7Em75Ph24?si=XI6HLHTAcSFzhA83&ref=blog.lido.fi) Lido Poolside Community calls continue monthly, with Tokenholder Update ones held quarterly. [Subscribe to Luma](https://luma.com/lido?ref=blog.lido.fi) for updates on upcoming events. --- *This post is for informational purposes only and should not be construed as investment, financial, legal, tax, or other professional advice. The views expressed are those of the individual contributors and do not necessarily reflect the official position of Lido DAO. Past performance is not indicative of future results. Staking rewards are variable and not guaranteed — values fluctuate based on network conditions. Readers should conduct their own research and consult with qualified professionals before making any decisions. Nothing in this post constitutes a solicitation or offer to buy or sell any securities or other financial instruments.* ### How Liquid Staking Unlocks Higher Rewards for ETH ETFs and ETPs URL: https://blog.lido.fi/how-liquid-staking-unlocks-higher-rewards-for-eth-etfs-and-etps/ Last updated: 2026-03-13T11:03:28.000Z Ethereum ETFs and ETPs are emerging as an important institutional channel for accessing ETH exposure. The next divide is between products that capture staking rewards and products that leave them on the table. More than [30% of ETH is staked](https://dune.com/hildobby/eth2-staking?ref=blog.lido.fi) across the Ethereum network. [WisdomTree launched a 100% stETH-backed European ETP](https://blog.lido.fi/wisdomtree-launches-first-fully-staked-eth-etp-backed-by-steth/) in December 2025, and [VanEck filed a preliminary prospectus for a proposed U.S. stETH ETF](https://blog.lido.fi/vaneck-files-for-lido-staked-eth-etf/) in October 2025\. The issue is no longer whether staking belongs in regulated ETH wrappers, but what form it should take. ## **The ETF Staking Opportunity** The key challenge in staked ETH products is how to add staking while preserving the liquidity, capital efficiency, and operational predictability participants expect from an exchange-traded product. A passive ETH wrapper misses out on staking rewards that many institutions increasingly see as part of full ETH exposure. As more ETH is staked across the network, the economic gap between staked and unstaked positions becomes harder to ignore. For ETP issuers, that choice has competitive implications. Exchange-traded products need daily pricing, reliable liquidity, custody controls, and operational predictability. The priority is choosing the staking approach that best fits those requirements. ## **Why Native Staking Presents Structural Challenges for ETPs** A natively staked position depends on validator operations, which means liquidity is not always available when the product needs it. New ETH must pass through validator entry, and exits through the withdrawal process. Those delays are variable, but they can become material during periods of higher demand. In early March 2026, for example, Ethereum’s validator queue showed an [entry queue of roughly 57 days](https://www.validatorqueue.com/?ref=blog.lido.fi), an exit queue of about 1.5 days, and an additional sweep delay of around 8 days. For an ETF or ETP issuer, this typically presents three possible approaches: 1. **Keep a meaningful portion of the portfolio unstaked as a liquidity buffer:** This reduces the portion of assets actually earning staking rewards. In practice, issuers running natively staked ETPs typically hold 30-40% of assets unstaked to meet redemption requirements. That means a meaningful percentage of the product may sit idle rather than earning staking rewards. 2. **Stake more of the portfolio and rely on outside liquidity for redemptions:** That liquidity may come from market makers, OTC desks, a line of credit, or other financing arrangements. The cost of that liquidity can also increase the product’s total expense ratio. 3. **Take on a more complex operating model internally:** In practice, that means actively managing validators, planning around queue delays, and handling the gap between when investors want liquidity and when staked ETH can actually be withdrawn. None of these choices makes native staking unworkable, but all add complexity. Native staking may still make sense for institutions that want direct validator control. It is simply less well suited to an exchange-traded product that has to balance staking rewards with liquidity, reliable pricing, and operational simplicity. ## **Liquid Staking as an Infrastructure Alternative** Liquid staking can help address some of these constraints by making staked ETH liquid. When ETH is staked through the Lido protocol, users receive stETH, a liquid token designed to represent the staked position and the associated staking rewards generated. Because stETH is transferable, it can be traded, transferred, or used across secondary markets and DeFi applications while maintaining exposure to the underlying staking position. This structure reduces the need for ETF and ETP issuers to start and stop validators every time fund flows change. Participants such as market makers can source stETH in secondary markets, allowing creations and redemptions to rely on available market liquidity instead of waiting for ETH to move in or out of validator queues. In simple terms, liquid staking removes much of the operational burden of staking and turns it into a token the ETP issuer can work with. But this only works if the liquid staking token itself has the scale, liquidity, custody support, and pricing required for an exchange-traded product. ## **Why stETH Works for Institutional Products** Not every liquid staking token is suitable for an exchange-traded product. It needs scale, liquidity, custody support, reliable pricing, and enough market infrastructure for issuers and market makers to use it with confidence. stETH currently represents [more than 9 million ETH staked](https://dune.com/lido/lido-morning-coffee-dashboard?ref=blog.lido.fi), over $18 billion in total value locked, and nearly one quarter of all staked ETH on the network. It is also integrated across a broad range of trading, lending, and collateral venues, with approximately $100 million of liquidity within 2% depth, more than $2 billion in weekly trading volume, and roughly $10 billion used as collateral across DeFi and centralised platforms. That matters because scale alone is not enough. For an exchange-traded product, the underlying virtual asset also needs day-to-day tradability, dependable liquidity, and the ability to move through third-party financing and collateral workflows. stETH already does that. stETH also sits inside institutional workflows that ETF and ETP issuers already use. Institutional custody and infrastructure support is live across providers including Fireblocks, Copper, and BitGo. More than $4 million has been invested in security audits, and more than 650 node operators run validators via the protocol. That combination of custody access, validator diversification, and operating history matters when assessing whether the structure works in practice. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-93b6449b-b3a3-41c2-b949-d93df525f76b.png) ## **What This Means for the Next Generation of ETH ETFs & ETPs** The next generation of ETH wrappers will likely split into two categories: spot ETH exposure, and staking-enabled ETH exposure. For the second category, liquid staking is structurally better aligned with the wrapper than native staking. Native staking still matters. It is simply better suited to use cases where direct validator control matters most. ETFs and ETPs are built around something different: daily tradability, scalable distribution, reliable pricing, and operational simplicity. Europe has already seen this architecture implemented in publicly traded products. WisdomTree's stETH-backed ETP, live since December 2025 on Xetra, SIX, and Euronext, is the clearest example of this model. In the U.S., similar structures are still at the proposal stage. For issuers designing staked ETH products, the infrastructure they choose will shape liquidity, operational simplicity, and long-term competitiveness. On those measures, stETH stands out for its scale, secondary market depth, institutional custody access, and broader market infrastructure. --- **ETF and ETP issuers evaluating staked ETH products can connect with the** [**Lido Institutional team**](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi) **to discuss structure, custody, and implementation.** --- *Note that this content is provided for informational purposes only and does not constitute financial, investment, legal, or tax advice. Nothing contained herein should be interpreted as a recommendation or solicitation to buy, sell, or hold any digital asset.* *Past performance is not indicative of future results, and outcomes may vary.* *Participation in blockchain networks, staking, or DeFi activities involves risks, including smart contract risk, market volatility, liquidity constraints, and potential loss of assets. Readers should conduct their own research and seek independent professional advice before engaging with any protocol or product mentioned.* ### Lido Earn Expands with EarnETH and EarnUSD URL: https://blog.lido.fi/lido-earn-expands-with-earneth-and-earnusd/ Last updated: 2026-03-16T11:08:50.000Z ### Two streamlined vaults have been introduced - [EarnETH](https://stake.lido.fi/earn/eth?ref=blog.lido.fi) and [EarnUSD](https://stake.lido.fi/earn/usd?ref=blog.lido.fi) \- to improve reward generation for DeFi users. The Lido protocol has long served Ethereum stakers through stETH. Today, that foundation expands. Lido Earn now introduces [**EarnETH**](https://stake.lido.fi/earn/eth?ref=blog.lido.fi) and [**EarnUSD**](https://stake.lido.fi/earn/usd?ref=blog.lido.fi)**:** Two DeFi vaults that consolidate the Earn product line and introduce Lido’s first USD-denominated vault. Earn auto-compounded ETH and USD denominated rewards across two vaults optimised for capital efficiency. Start earning today: [stake.lido.fi/earn](https://stake.lido.fi/earn?ref=blog.lido.fi). ## **A Simpler Structure: Two Vaults** Since launching in September 2025, Lido Earn vaults have attracted more than [$150 million in deposits](https://stake.lido.fi/earn?ref=blog.lido.fi). Previously, Lido Earn consisted of individual vaults - GGV, DVV, and stRATEGY - each with its own curator and strategy mix. The new Lido Earn architecture simplifies the experience while broadening its scope: one vault for ETH, one for USD. These two vaults allocate ETH and USD denominated cryptoassets across integrated strategies to maximise capital efficiency. ## **EarnETH: Blue-chip DeFi rewards made simple.** [EarnETH](https://stake.lido.fi/earn/eth?ref=blog.lido.fi) deploys capital across established DeFi protocols including Aave, Morpho, Pendle, Gearbox, Maple and more. Rather than relying on a single strategy provider, EarnETH aggregates multiple providers and dynamically allocates assets towards performing opportunities as conditions evolve. EarnETH accepts ETH, WETH, and (w)stETH. Deposit to receive earnETH, earning daily, auto-compounded DeFi rewards. Alternatively, you can deposit existing Lido Earn tokens - GG/DVstETH/strETH - into the vault. Access blue-chip DeFi-based rewards with automatic compounding and optimal capital efficiency. Simple earning. Get started with EarnETH here: [stake.lido.fi/earn/eth](https://stake.lido.fi/earn/eth?ref=blog.lido.fi) ![](https://blog.lido.fi/content/images/2026/03/data-src-image-72eed145-156f-4b0b-b632-7b014767567d.png) ## **EarnUSD: Transparent, onchain USD rewards.** [EarnUSD](https://stake.lido.fi/earn/usd?ref=blog.lido.fi) allocates assets across USD-denominated strategies on Ethereum, operating within defined asset selection criteria and transparent reporting standards. The vault blends conservative third-party lending positions with selective exposure to performing strategies. Allocations adjust as market conditions shift and may include onchain lending markets, real-world asset integrations, and structured positions. EarnUSD accepts USDC and USDT. Depositors receive earnUSD, earning daily, auto-compounded USD rewards. Get started with EarnUSD here: [stake.lido.fi/earn/usd](https://stake.lido.fi/earn/usd?ref=blog.lido.fi) ![](https://blog.lido.fi/content/images/2026/03/data-src-image-736d927f-2fce-4d32-92d1-e9d3a44c79ab.png) ## **Start Earning with Lido Earn** With EarnETH and EarnUSD now live, users can begin earning effortlessly today. 1. Navigate to [stake.lido.fi/earn](https://stake.lido.fi/earn?ref=blog.lido.fi) and connect a wallet. 2. Choose your preferred vault: **EarnETH or EarnUSD.** 1. **EarnETH**: Simple and transparent ETH-based DeFi rewards. 2. **EarnUSD**: Transparent, risk-adjusted onchain USD-denominated rewards. 3. Deposit assets into your preferred vault. 1. **EarnETH**: Accepts ETH, WETH, and stETH. 2. **EarnUSD**: Accepts USDT and USDC. 4. Receive earnETH or earnUSD tokens representing your shared position in the vault. The value of these tokens reflects the amount you deposited and the vault’s performance. Your earnETH and earnUSD tokens are designed to accrue daily DeFi rewards behind the scenes according to the vault’s strategy. Rewards are automatically included in your token balances and are realized upon withdrawal. Previous vaults – GGV, DVV and stRATEGY – will be upgraded, moving to a withdrawal-only mode to be replaced by EarnETH and EarnUSD, and the new EarnETH vault will accept previous vault tokens as deposits. To upgrade existing allocations to the new EarnUSD and EarnETH vaults, follow the instructions [here](https://help.lido.fi/en/articles/14038885-upgrading-to-lido-earn-metavaults?ref=blog.lido.fi). For more information, refer to the [Lido Earn Help Center](https://help.lido.fi/en/collections/15080307-lido-earn?ref=blog.lido.fi). ## **Why USD on Ethereum** For more than five years, the Lido protocol has supported Ethereum staking through stETH, securing up to $38 billion in total value locked with zero incidents resulting in monetary loss. EarnUSD extends that operating standard to stablecoin participants. Half of Ethereum DeFi activity is denominated in stablecoins. Until now, the Lido protocol primarily served ETH holders. With EarnUSD, stablecoin capital can access curated onchain strategies through the same governance framework and operational standards that underpin the staking infrastructure of the Lido protocol. ## **Modular, Adaptable, Upgradable** Lido Earn forms part of Lido DAO’s 2026 strategy to scale sustainable revenue streams beyond staking while maintaining its core commitment to Ethereum. The new MetaVault structure reduces fragmentation, simplifies user experience, and enables capital to be routed efficiently across integrated DeFi protocols. To improve the experience for users, a DAO proposal to allocate $5m in DAO treasury funds to the optimised Lido Earn vaults has been shared and approved. This further aligns the Lido DAO with the Lido Earn initiative and puts in place an onchain, first-loss alignment mechanism to protect users in case of severe scenarios. More information can be found [here](https://research.lido.fi/t/lido-earn-competing-on-trust-5m-treasury-allocation/11228?ref=blog.lido.fi). Start earning today on [stake.lido.fi/earn](https://stake.lido.fi/earn?ref=blog.lido.fi). --- ## **Lido Earn Resources** - [Lido Earn](https://stake.lido.fi/earn?ref=blog.lido.fi) - [Help Center](https://help.lido.fi/en/collections/15080307-lido-earn?ref=blog.lido.fi) --- *Lido Earn, including EarnETH and EarnUSD, provides access to on-chain strategies involving digital assets. Participation in these vaults involves risks, including but not limited to smart contract risk, protocol risk, market volatility, liquidity risk, and potential loss of principal. There is no guarantee that any strategy will generate positive returns. To learn more about some of the risks associated with staking via the Lido protocol, visit* [*lido.fi/how-lido-works/known-risks-and-mitigation*](https://lido.fi/how-lido-works/known-risks-and-mitigations?ref=blog.lido.fi)*s.* *Any references to rewards, performance, allocation, or optimization describe the intended design of the vaults and do not constitute guarantees of future results. Past performance is not indicative of future outcomes. Returns, if any, may vary. Users may incur losses.* *Lido Earn vaults operate through integrations with third-party protocols, which are independent and subject to their own risks and terms. Users are solely responsible for evaluating the suitability of participation based on their individual circumstances.* *This communication is provided for informational purposes only and does not constitute financial, investment, legal, or tax advice, nor an offer or solicitation to buy or sell any financial instrument. Users should conduct their own research and seek independent professional advice before participating.* ### Lido Validator and Node Operator Metrics: Q4 2025 URL: https://blog.lido.fi/lido-validator-and-node-operator-metrics-q4-2025/ Last updated: 2026-03-11T14:25:02.000Z ## Overview - **Permissionless participation accelerated**: CSM reached its 5% stake share cap following the v2 upgrade, while 345 operators qualified for Identified Community Staker status, broadening independent participation in the Lido validator set. - **DVT scaled across all modules**: 22,233 validators (711,456 ETH) now run using Distributed Validator Technology, strengthening fault tolerance and infrastructure diversity protocol-wide. - **Client diversity improved**: No Consensus client exceeds 33% across the Lido validator set, and Execution Layer distribution remains balanced with five clients active across the Lido Staking Modules. - **Curated Set balanced**: Validator allocation is now evenly distributed across 36 Curated Node Operators, reducing concentration risk and aligning with the 1% soft cap objective. - **Infrastructure matured**: Validator density per node decreased by -14.5%, cloud reliance moderated, and hosting diversified, lowering correlated failure exposure. The latest Q4 2025 VaNOM report is now live and available via the [link](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/VaNOM-Lido-on-Ethereum-Validator-Node-metrics-1vnpSDa7PtbyA6HX0bVNj1/latest?ref=blog.lido.fi). ## Basic Stake & Operators Statistics In late September, LDO tokenholders approved another cornerstone change for the **Community Staking Module (CSM)** in 2025, increasing its stake share limit from 3% to 5%, alongside the [mainnet activation of v2 upgrade](https://blog.lido.fi/community-staking-module-v2-launch-scaling-permissionless-staking-empowering-community-stakers/) and the [introduction of the Identified Community Staker (ICS) framework](https://blog.lido.fi/unlock-exclusive-benefits-as-an-identified-community-staker/). ![](https://blog.lido.fi/content/images/2026/03/data-src-image-62698367-32a5-4667-b9d7-c8779d1b78c0.png) Since its activation, ICS has gained meaningful traction. By offering tailored conditions while maintaining transparent eligibility criteria, ICS lowers structural barriers for truly independent operators. This directly contributes to diversifying the operator composition and empowering decentralization within both the Lido protocol and Ethereum more broadly. As of January 1, 2026, 482 applications had been evaluated with 345 approved, and 220 operators claimed their ICS status. The framework unlocks enhanced validation parameters, including a 6% reward share for the first 16 validators, deposit priority for the first 10 validators, a reduced bond requirement for the first validator, lower removal fees, and more flexible performance thresholds compared to the permissionless CSM operator type. Following renewed deposit inflows, the CSM reached its new 5% stake share limit in December, marking +29.35% quarter-over-quarter (QoQ) growth. On an annual basis, the module added +377,664 ETH, demonstrating strong community interest toward permissionless validator participation in the Lido protocol. The operator composition within CSM remains predominantly independent. Of 412 active operators, 345 (83.74%) qualify under the ICS operator type. Additionally, 35 operators participate across both CSM and the Simple DVT Module, while three Curated Node Operators (NOs) — P2P, Stakely, and Launchnodes — also operate within CSM. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-3567908d-a8e3-4f97-ad03-479bba3c1670.png) In December, the DAO also approved a module capacity adjustment to the **Simple DVT Module (SDVTM)**, increasing its target stake share from 4% to 4.3%. This change addressed an allocation bottleneck: under the previous limit, the module could not simultaneously maintain its stake cap while completing validator allocations to clusters that had not yet reached their approved capacity (80 validators for regular clusters and 500 for Super Clusters). It ensures operational continuity and avoids underutilization of approved cluster infrastructure, reinforcing the protocol's ability to adopt Distributed Validator Technology (DVT) as planned. As of January 1, 2026, these decentralized modules — CSM and SDVTM — collectively represented nearly 800,000 ETH, or 2.2% of total Ethereum stake. This marks a +0.53pp increase from Q3 2025, and nearly 3x from the end of 2024, underscoring measurable progress in diversifying Lido validator set over the course of the year. December also brought notable changes within the **Curated Module (CM)**. A41 announced its decision to wind down node operations across all networks and requested that the Lido DAO reduce its validator limit to zero, enabling the protocol to process exits through the validators run by them. At the same time, Pier Two — previously operating 3,766 validators — was allocated 3,200 additional validators, bringing its total to 6,966 by year-end. This increase brought Pier Two’s validator count in line with other operators in the Curated Module, improving stake distribution balance within the module. By the end of 2025, the Curated Module exhibited an exceptionally balanced distribution, with a Gini coefficient of 0.001 and an HHI of 0.0278, reflecting near-equal stake allocation among participating Node Operators, with each of the 36 active Curated NOs operating 6,967–6,967 validators. This accounted for approximately 0.71% of total Ethereum validators, well below the 1% soft cap defined in the [Lido Scorecard](https://lido.fi/scorecard?ref=blog.lido.fi) and [Operator Set Strategy](https://hackmd.io/K6udDz1nSZOoX8t-vE98qg?ref=blog.lido.fi). For further details on Gini and HHI, see the [Glossary in the VaNOM Appendix](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/VaNOM-Lido-on-Ethereum-Validator-Node-metrics-1vnpSDa7PtbyA6HX0bVNj1/latest?selectedStaticCellId=d55417e5-349e-479b-9c11-31f7e7ae8436&%5Fselected%5Fquarter=%222025Q4%22&ref=blog.lido.fi). This achievement represents a structural improvement in stake distribution within the Curated Module. While remaining the largest Lido Staking Module (SM), its internal allocation now demonstrates significantly reduced concentration risk and stronger alignment with the protocol’s long-term decentralization objectives. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-3740a302-3105-4c34-a6a4-8b1c4c205b49.png) ## Validator Set Client Diversity Lido validator set continues to maintain a balanced distribution across both Consensus Layer (CL) and Execution Layer (EL) clients. While distribution varies by module design and operator composition, the broader picture remains clear: Lido maintains a stronger client balance than the pan-Ethereum average, showcasing its commitment to reducing correlated failure risks and contributing to Ethereum’s overall resilience. Compared to the broader CL landscape — where Lighthouse remains dominant at 50.95% (up by 5.03pp year-over-year (YoY)) — Lido validators reflect a more meaningfully distributed profile. Within the protocol, no Beacon Node (BN) client exceeds 33% of the validators, mitigating supermajority and finality risks arising from excessive client concentration. Multi-node setups now represent more than a quarter of validators (27.86%), an increase of +4.72pp, largely driven by DVT adoption within the Curated Module. At the module level, Curated and Community Staking Modules strike the best balance, with the most popular clients, Lighthouse and Nimbus, accounting for 27.53% and 35%, respectively. Within the SDVTM, Lighthouse continues to lead with 52.63% of validators, although this is down 3.87pp from the past year. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-ad1f3423-4094-4a3c-8eee-97e601320082.png) Improving EL client diversity has remained a sustained focus for Lido DAO contributors and Node Operators since the Merge in Q3 2022\. Since then, deliberate efforts — both Node Operators’ and governance-driven — have steadily reduced dependency on a single dominant client. As minority clients stabilized and matured post-Merge, NOs expanded their Lido Execution Layer configurations accordingly. This process became increasingly transparent in early 2024, when [Curated Node Operators began publicly sharing their commitments on the Lido Research Forum to further reduce majority client exposure](https://research.lido.fi/t/ethereum-node-operator-el-diversity-improvement-commitments/6459?ref=blog.lido.fi). Two years later, the impact is measurable. Across the Curated Module, no EL client holds a supermajority: - Geth has structurally reduced to 37.0% ( roughly half its share at the end of 2021). - Nethermind has remained stable at \~39% in 2024–2025. - Besu accounts for 18.7% (a modest decrease of -0.5pp QoQ and -1pp YoY). - Reth continues its steady growth since first adoption in Q3 2024, reaching 4.7% this quarter. Erigon remains low at 0.6% (-3pp compared to the end of 2024), following earlier rotations by Figment and Stakely toward Reth, Geth, and Nethermind. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-18b73be7-9357-4639-920b-227f4a6af350.png) ![](https://blog.lido.fi/content/images/2026/03/data-src-image-684bb8a8-3071-4a3f-baa9-38bb8987e1f4.png) The top five EL clients are also consistently represented across both the CSM and Simple DVT modules. In Simple DVT, Nethermind remains the most widely used client at 54.51% (-6.61pp compared to year-end 2024). In CSM, Nethermind accounts for 60%, followed by Geth, Besu, Reth, and Erigon (21%, 14%, 3% and 1% respectively). While Nethermind retains a leading position in the decentralized SMs, the broader EL landscape across Lido validator set remains multi-client, thanks to the Curated set, operating 91.09% of the protocol stake, where distribution is more structurally balanced with four EL clients meaningfully active. The heatmap below illustrates how validators are distributed across combinations of EL and BN clients. Each cell represents the number of validator keys operated under a specific EL/BN pairing, with darker shading indicating greater adoption. This view highlights real-world operator preferences and compatibility trends, showing not only which clients are popular individually, but which combinations are most commonly deployed at scale. The diversity observed across these pairings further reduces correlated client risks and strengthens the robustness of Lido validator ecosystem. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-85160d60-7de2-4613-98b0-485fb25165dc.png) ## Distributed Validator Technology Adoption By the end of 2025, DVT was utilized across all Lido Staking Modules, powering 22,233 validators representing 711,456 ETH. This marks a +537,792 ETH increase year-over-year, or over four times growth. In total, Lido DVT-powered validators account for 1.99% of total Ethereum stake, making a meaningful protocol-level contribution to Ethereum’s resilience through DVT-based infrastructure. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-0fafd0f8-60d4-4dc2-82cd-1f5d6fdb9c53.png) A major driver of this growth was the accelerated adoption of Obol and SSV Network within the Curated Module, following Lido DAO approval of intra-operator setups. Expanding DVT adoption by extending DVT beyond Lido decentralized modules into the largest staking module strengthens fault tolerance and represents a structural enhancement to Lido validator architecture. - Obol (Curated Module): 100 → 1,100 validators (11x growth vs Q3 2025) - SSV Network (Curated Module): 4,800 → 7,550 validators (1.5x growth quarter-over-quarter) As a result, combined DVT utilization across Curated validators reached 3.45%, with continued testing and staged mainnet adoption expected to increase this share further. By the end of 2025, all 70 Regular clusters and 10 Super Clusters of the Simple DVT Module became fully allocated. Compared to Q3, this represented an additional +80 Obol and +38 SSV Network validators, bringing the module to its governance-approved allocation and accounting for 4.0% of the Lido protocol. Within the Community Staking Module, where DVT utilization remains fully voluntary, its adoption also expanded meaningfully. Compared to Q3, 1,249 additional validators (+78.45%) adopted Obol or SSV Network solutions. Among CSM operators who reported infrastructure choices, 35.38% utilize DVT-based setups. Although SafeStake — used only within CSM — announced it would cease operations, its footprint was limited to 4 operators running 8 validators, resulting in no material impact on overall DVT adoption. In 2025 DVT became a widely adopted operational choice among Lido Node Operators of different types. Beyond its internal impact, Lido growing DVT adoption contributes to broader ecosystem-level validation of distributed validator infrastructure. By deploying DVT across multiple Staking Modules, Lido helps stress-test implementations under real economic conditions and production workloads. Collectively, the protocol DVT share stands at 8.36%, strengthening Lido contribution to a more decentralized, diversified, and robust Ethereum validator ecosystem. ## Infrastructure: Servers & Hosting Mix As of the end of 2025, Lido Node Operators collectively utilize 658 node, representing a +14.6% increase over the year. At the same time, density declined by -14.5%: - Average validators per node: 381 (-25% from 2024) - Maximum validators per node: reduced from 8,147 to 6,967 This shift reflects a structural improvement in operational risk management. Fewer validators per node reduce correlated downtime risk in the event of hardware or hosting failures, contributing to stronger validator-level resilience across the Lido protocol. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-3d39727d-a778-4437-b5d3-75802517f84b.png) While Public Cloud remains the most widely used hosting option in the Curated Module at 47.7%, its share decreased by 3.8pp year-over-year from 50.5%, with a corresponding shift toward dedicated servers, which grew to 26.44% (+4.04pp) in Q4 2025\. Provider diversity remains stable overall, though several notable shifts occurred: - AWS validator keys decreased from 58K to 41K, likely influenced by multiple AWS-related incidents during Q4 2025\. Importantly, despite AWS hosts 34% of Curated Module validators running on public cloud infrastructure, none of major outages impacted the Lido protocol, and all Node Operators maintained near 100% uptime. - GCP server count doubled, while key allocation remained stable. - OCI expanded from 2 to 9 servers. - Huawei usage nearly exited the Set. This measured rebalancing suggests Lido Node Operators are proactively diversifying hosting exposure rather than concentrating further within cloud providers, which is a positive signal from a decentralization and operational risk perspective. A similar reduction in Public Cloud reliance occurred within the Simple DVT Module, where cloud usage declined by 4.22pp to 12.9% by the end of Q4 2025\. Similarly to last quarters, dedicated servers remain the dominant infrastructure choice at 60.67%. Home nodes (9.00%) and Colo setups (8.44%) remained stable quarter-over-quarter, representing continued participation of independent solo and community stakers within the Simple DVT Module. Within the CSM, Home nodes remain the most common hosting choice, underscoring the module’s permissionless and community-oriented focus. At the same time, a modest increase in Managed Servers (7.81%) and Public Cloud usage (3.21%) reflects participation from professional staking providers drawn by attractive staking terms. Reducing validator density per machine, diversifying cloud exposure, and maintaining meaningful participation across home, colo, and dedicated environments collectively reduce correlated failure domains within the Lido validator set. ## Geographic Distribution The map below presents unified validator distribution data across all Lido staking modules. For the Community Staking Module, geographic data is self-reported and therefore reflects only operators who chose to disclose their infrastructure location. Validator distribution is based on primary server locations, with darker shades indicating higher validator concentration. Within the Curated Module, the overall geographic footprint remained stable throughout 2024\. Germany and the United States continue to host the largest number, with 48,402 and 32,397 validators respectively. While both jurisdictions saw a modest decline in validator counts, their relative leadership remains unchanged. The most notable growth was observed in Australia, where validator count nearly doubled following the additional allocation to Pier Two. This expansion meaningfully increased Asia-Pacific representation within the Curated Set, contributing to broader geographic dispersion. Overall, while the Curated Module still reflects concentration in historically strong validator regions, incremental shifts indicate gradual rebalancing rather than consolidation. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-b55c5332-86ec-43c2-bf27-19134d19f237.png) Geographic distribution within the Simple DVT Module remained broadly stable across Europe, the Americas, and the Asia-Pacific regions, as clusters scaled toward their target validator capacities. Germany and Finland account for a meaningful share of validators, but the distribution remains multi-regional. The United States, United Kingdom, France, and Singapore continue to be well represented, while several previously underrepresented jurisdictions expanded their presence as clusters matured. Among CSM operators who reported infrastructure locations, the top ten jurisdictions are: - **United States** — 2,011 validators - **Germany** — 965 - **United Kingdom** — 563 - **South Korea** — 461 - **Canada** — 389 - **France** — 237 - **Spain, Netherlands, Switzerland, Czech Republic** — above 100 each Given that reporting is voluntary, these figures likely underrepresent total geographic dispersion. Nevertheless, the data suggests continued expansion of the validator footprint beyond traditional infrastructure hubs. Geographic distribution plays a critical role in validator decentralization. Jurisdictional diversity reduces regulatory concentration risk, improves network liveness under localized disruptions, and strengthens Ethereum’s censorship resistance assumptions. Across 2025, Lido validator set maintained multi-regional representation while gradually expanding into new jurisdictions. ## Looking Ahead Zooming out, 2025 marked a continued evolution of the Lido validator set. Over the course of the year, decentralization advanced not through isolated minor improvements, but through coordinated progress across modules: expanded permissionless participation via CSM, bringing DVT adoption across Curated operators and more even stake distribution within the largest staking module, improved client diversity, reduced infrastructure density per machine and geographical distribution. Taken together, these changes reflect a validator ecosystem that is not only more performant, but more distributed across operators, infrastructure, geographies, and software implementations, which strengthen Lido contribution to Ethereum’s long-term resilience. Looking ahead to 2026, further diversification is expected on multiple fronts. The [proposed design of CMv2](https://research.lido.fi/t/future-of-the-curated-module-cmv2-landscape/10929?ref=blog.lido.fi) introduces the ability to create multiple sub-operator profiles of different types under a single entity, including Decentralization Operators, Extra Effort Operators, and Intra- and Multi-Operator DVT Clusters. These configurations are designed to support individual Node Operator’s contributions that enhance decentralization and broader ecosystem robustness, while maintaining risk controls through calibrated bond requirements and performance guardrails. At the same time, a [potential future expansion of the CSM toward a 10% stake share](https://research.lido.fi/t/community-staking-module/5917/139?ref=blog.lido.fi#p-21934-csm-stakesharelimit-increase-plans-2), alongside continued growth of the number of operators that qualify for Identified Community Staker (ICS) type, is expected to further broaden permissionless participation and bringing more independent operators into the Lido validator set. As always, Lido DAO contributors will continue to refine the protocol’s metrics and dashboards to reflect its growing complexity and ensure data-driven accountability. Explore the latest [Q4 2025 VaNOM dashboard](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/VaNOM-Lido-on-Ethereum-Validator-Node-metrics-1vnpSDa7PtbyA6HX0bVNj1/latest?ref=blog.lido.fi), revisit previous reporting periods, and stay tuned for the next update. In the meantime, check the[ ](https://operatorportal.lido.fi/?ref=blog.lido.fi)[Validator Set Updates](https://operatorportal.lido.fi/?ref=blog.lido.fi#:~:text=Validator%20Set%20Updates%20DB) for ongoing monthly insights into the evolution of the Lido validator set. ### Lido V3 & Kiln: Expanding Institutional Ethereum Staking with stVaults URL: https://blog.lido.fi/lido-v3-kiln-expanding-institutional-ethereum-staking-with-stvaults/ Last updated: 2026-02-17T09:46:26.000Z ## **Product Overview** [Kiln](https://kiln.fi/?ref=blog.lido.fi) is the institutional layer for on-chain assets, providing staking and yield infrastructure to custodians, exchanges, wallets, asset managers, and platforms offering ETH staking at scale. As an approved Lido V3 node operator, Kiln runs validators that back stVaults, enabling institutional ETH stakers and existing stETH holders to access liquidity through stETH while benefiting from Kiln’s high-performing infrastructure. Kiln’s approach is designed for institutions that require scalable staking with strong performance guarantees, operational simplicity, and compliance-ready transparency. ## **Initial Approach & Limitations** Institutional ETH staking has historically required a compromise between liquidity and performance optimization. Direct staking offers operator selection and potentially stronger validator outcomes, but leaves capital illiquid. Traditional liquid staking provides liquidity, but removes operator choice and averages validator performance across a broad pool. This compromise has limited institutional flexibility. For many platforms and asset managers, the inability to combine liquidity with performance-driven operator selection has constrained the development of staking-native yield strategies that remain rooted in Ethereum fundamentals rather than DeFi risk. stVaults introduce a new architecture where institutions can retain liquidity and composability without giving up control over validator selection and attribution. ## **Why Lido V3 & stVaults** ***Operator choice with liquidity*** stVaults allow ETH to remain staked on Kiln-operated validators while enabling optional stETH minting, removing the traditional trade-off between liquidity and operator selection. ***Performance-driven institutional staking*** By combining stETH liquidity with Kiln’s consistently above-average validator performance, stVaults enable better risk-adjusted staking outcomes than pooled liquid staking models. ***Isolation, transparency & compliance alignment*** Vault-level isolation and on-chain attribution provide the reporting clarity and operational control institutional clients require, supporting stronger compliance and auditability. ## **Integration & Security Approach** Kiln participates in Lido V3 as an approved node operator, operating enterprise-grade validators that directly back stVault deployments. ETH associated with these vaults is staked through Kiln’s institutional validator infrastructure. stETH minting is optional, while all validator monitoring, performance management, and operational overhead are handled by Kiln. The setup benefits from: - Vault-level asset isolation with transparent, on-chain attribution - Kiln’s SOC 2 Type II–compliant validator infrastructure - Lido V3’s audited stVault smart contract framework This combination ensures institutions can access liquid staking functionality with strong guarantees around security, uptime, and performance differentiation. ## **Expected Outcome** stVaults allow Kiln to make high-performing institutional staking broadly accessible without compromising simplicity or trust. By pairing stETH liquidity with Kiln-operated validators, platforms and asset managers can offer meaningfully improved ETH staking outcomes compared to pooled models, while keeping yield generation anchored to staking fundamentals. This is especially relevant for wallets, fintechs, and institutional platforms that rely on Kiln as a trusted infrastructure provider. stVaults enable these partners to distribute liquid, performance-driven staking products backed by Kiln’s validator operations without introducing additional DeFi or lending risk. Lido V3 stVaults unlock a new standard for institutional staking: liquid, composable, operator-selectable, and transparently attributable on-chain. --- ## Resources - [Lido V3 & stVaults](https://lido.fi/stvaults?ref=blog.lido.fi) - [Lido V3 Documentation](https://docs.lido.fi/run-on-lido/stvaults?ref=blog.lido.fi) - [Lido V3 Case Studies](https://blog.lido.fi/category/lido-v3/) ### The Case for Staked ETH in Corporate ETH Treasuries URL: https://blog.lido.fi/the-case-for-staked-eth-in-corporate-eth-treasuries/ Last updated: 2026-02-10T12:12:57.000Z Corporate treasuries holding ETH face a strategic decision about how to deploy that capital. One path is to leave it unstaked. This means missing the staking rewards that accrue to active network participants. [Approximately 30% of all ETH is now staked](https://dune.com/hildobby/eth2-staking?ref=blog.lido.fi), and for treasuries with significant positions, the cumulative cost of missed rewards grows over time. Another path is native staking. This captures rewards but introduces friction. The validator entry queue currently sits at nearly [70 days](https://www.validatorqueue.com/?ref=blog.lido.fi), with over 4 million ETH waiting for activation. A treasury staking natively today would wait nearly two months before receiving any rewards. And once staked, that capital is locked - exit timing is governed by protocol mechanics, not treasury needs. Beyond the liquidity constraints sit operational requirements that many treasuries are not structured to absorb: infrastructure decisions, key management, and slashing exposure. ![](https://blog.lido.fi/content/images/2026/02/data-src-image-274f67f3-b8ec-448c-b20d-ecff29c673c5.png) For teams that want capital efficiency, liquidity, and operational simplicity, neither option works. ## **Rewards From Day One** Liquid staking addresses this gap. When ETH is staked via the Lido protocol, the staker receives stETH immediately - a liquid token representing the staked ETH and any accrued rewards. Staking rewards begin accruing from day one. There is no entry queue and no activation delay. The position remains liquid: stETH can be held, redeemed, used as collateral, or sold on secondary markets with deep liquidity. Approximately [$100 million of stETH is executable within 2% of redemption value](https://dune.com/lido/lido-morning-coffee-dashboard?ref=blog.lido.fi), and roughly $10 billion sits active as collateral across Aave, Morpho, and Maker. In practice, this means a treasury exiting a $50 million position can do so without meaningful price impact. That liquidity matters when a position needs to work in practice, not just on paper. ## **Built for Institutional Scale** For many institutions, custody determines what's viable. Custodians including Fireblocks, BitGo, and Copper all support stETH natively, with minting and redemption available directly within existing workflows. For treasuries already using these platforms to custody ETH, stETH is accessible without new vendors, new integrations, or new operational processes. The infrastructure is already live. Regulated product issuers have followed. [WisdomTree launched Europe's first 100% staked ETH ETP](https://www.wisdomtree.eu/en-gb/press-room/tabs/latest-news/wisdomtree-launches-the-worlds-first-physical-lido-staked-ether-etp?ref=blog.lido.fi) in December 2025, with $50m AUM at launch. [VanEck filed for the first US Lido Staked ETH ETF](https://blog.lido.fi/vaneck-files-for-lido-staked-eth-etf/) in October 2025. As staked ETH products enter regulated markets, the benchmark is shifting. Treasuries holding unstaked ETH now face comparison against ETFs and ETPs that capture staking rewards by default. The performance gap between idle ETH and a 100% staked product compounds over time - and becomes harder to justify to boards and investors. The underlying infrastructure supports this scale: over 650 node operators back stETH, distributed across curated, DVT, and community staking modules. No single-operator concentration, no dependency on one infrastructure provider. This distribution reduces exposure to any individual operator's performance or operational failure. For treasuries that need more control - specific compliance, reporting, or operational requirements - [Lido V3 introduces stVaults](https://v3.lido.fi/?ref=blog.lido.fi): isolated staking environments with custom validator configurations and full onchain transparency, while retaining access to stETH liquidity. This infrastructure depth - [100+ protocol integrations,](https://lido.fi/lido-ecosystem?ref=blog.lido.fi) native custody support, deep liquidity - is why stETH backs the majority of institutional liquid staking on Ethereum. ## **The Cost of Idle ETH** Holding unstaked ETH carries an opportunity cost that compounds daily. Native staking addresses the reward problem but introduces queue delays and operational overhead that sit outside most treasury mandates. stETH offers a path through: staking rewards from day one, liquidity when needed, and integration with the custody and trading infrastructure that institutions already use. To discuss how stETH fits your treasury strategy, [get in touch with the Lido Institutional team](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi). ### Lido V3 & Nansen: Transparent Ethereum Staking with stVaults URL: https://blog.lido.fi/lido-v3-nansen-transparent-ethereum-staking-with-stvaults/ Last updated: 2026-07-16T11:40:46.000Z ## **Product Overview** [Nansen](https://www.nansen.ai/?ref=blog.lido.fi) is a leading onchain analytics and data infrastructure provider. Following its 2024 [acquisition of StakeWithUs](https://nansen.ai/post/staking-meets-analytics-nansen-acquires-stakewithus-and-unveils-nsn-points-program?ref=blog.lido.fi), Nansen expanded into staking services across multiple blockchains and has since established itself as a top-tier validator by assets under management, delegator growth, and breadth of supported networks. Nansen has launched [its first staking product](https://lido.fi/stvaults-products-overview/nansen-eth-vault?ref=blog.lido.fi) built on [Lido V3 stVaults](https://lido.fi/stvaults?ref=blog.lido.fi). It allows users to stake ETH directly to the stVault with Nansen-operated validators, providing exposure to Ethereum staking rewards, including both consensus yield and MEV, without requiring the 32 ETH minimum. In addition to staking rewards, users may earn Nansen Points for participating in the vault, aligning long-term incentives and rewarding early supporters of the ecosystem. Nansen’s staking participants span retail users, DeFi-native operators, funds, and institutions, all of whom expect dependable operations and verifiable performance. Delegators choose Nansen for its secure infrastructure and consistently high validator performance, and increasingly for a staking experience that introduces additional permissionless incentives without adding risk or compromising operational integrity. ## **Initial Approach & Limitations** Traditional Ethereum staking architectures abstract away validator-level performance, offering limited transparency and no native mechanism for clean attribution of rewards, penalties, or execution behaviour. At the same time, redeploying staked assets into secondary yield strategies typically introduces additional custodial, operational, and reporting complexity. Lido V3 stVaults address these limitations by enabling staking products that are explicitly tied to a defined validator operator, while still supporting the minting of stETH and integration with additive DeFi strategies. ## **Why Lido V3 & stVaults?** ### **Decentralization & Ecosystem Alignment** For Nansen, decentralized staking infrastructure ensures that rewards and value creation flow back into the ecosystem, supporting permissionless participation and transparent economics. For Lido DAO, 2026 strategic goals ([the GOOSE-3 roadmap](https://research.lido.fi/t/lido-labs-goose-3-lido-s-next-chapter/10927?ref=blog.lido.fi#p-23526-h-2211-expand-the-staking-ecosystem-7)) emphasise a transition from a one-size-fits-most B2C model to a modular B2B2X ecosystem, while maintaining strong alignment with Ethereum's decentralization objectives. By building on Lido V3 stVaults, Nansen directly supports these goals. ### **Protocol Resilience & Trustworthiness** The stVault architecture, combined with Lido’s established security track record, extensive audits, and transparent governance, provides a robust foundation for institutional-grade staking. Paired with Nansen’s data infrastructure, analytics, and operational credibility, the result is a product that allocators can independently evaluate, trust, and integrate into existing operational frameworks. ### **Composability & Transparency** stVaults allow Nansen to operate the vault's validators, where staking rewards, execution performance, and operational behaviour are fully attributable at the operator level. Within this structure, the vault can mint stETH against staked ETH, subject to protocol-defined reserve constraints, and deploy it into additive yield strategies. This model is particularly well suited for operators outside Lido’s genesis validator set and provides Nansen with a scalable foundation for building additional staking products, strategy layers, and integrations directly on top of the vault architecture. ## **Integration & Security Approach** Nansen is[ an identified Lido V3 Node Operator](https://research.lido.fi/t/node-operator-admission-nansen-as-stvault-professional-operator/10874?ref=blog.lido.fi). Its integration follows the separation-of-roles model defined in Lido V3\. Under this structure, Nansen acts as both the stVault Owner and the Node Operator, retaining responsibility for vault configuration, parameter management, governance, and validator operations. Standard Ethereum staking risks apply; for the full breakdown, see Lido's [Risk Assessment Framework for stVaults](https://research.lido.fi/t/risk-assessment-framework-for-stvaults/9978?ref=blog.lido.fi). The following measures have been implemented to support the security of Lido V3 and Nansen ETH Vault\*: - **Infrastructure and monitoring:** Validator infrastructure runs on hardened bare-metal servers in Europe, protected by firewall enforcement and private networking via WireGuard. Nansen maintains continuous monitoring for proposer performance, missed duties, slashing risks, signing anomalies, and overall node health. Operational and signing logs are centrally aggregated to support auditability, incident response, and post-event review. - **Key management:** Validator signing keys are secured using GCP KMS and accessed exclusively via Web3Signer. Keys are never stored in cleartext at rest or exposed to the application layer. Access is governed by strict role-based permissions, IP allow-listing, and enforced segregation of duties. - **Smart contracts:** Lido V3 stVaults smart contracts have undergone audits by [Certora](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi) (including [formal verification](https://github.com/lidofinance/audits/blob/main/Certora%20Lido%20V3%20Formal%20Verification%20Report%20-%2012-2025.pdf?ref=blog.lido.fi)), [MixBytes](https://github.com/lidofinance/audits/blob/main/MixBytes%20Lido%20V3%20Security%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Consensys Diligence](https://github.com/lidofinance/audits/blob/main/Consensys%20Diligence%20Lido%20V3%20Security%20Audit%20-%2011-2025.pdf?ref=blog.lido.fi), [Composable Security](https://github.com/lidofinance/audits/blob/main/Composable%20Security%20Lido%20V3%20Oracle%20V7%20Audit%20Report%20-%2012-2025.pdf?ref=blog.lido.fi), [Ackee Blockchain](https://github.com/lidofinance/audits/blob/main/Ackee%20Blockchain%20Vault%20Wrapper%20Report%2001-2026.pdf?ref=blog.lido.fi), and [Sigma Prime](https://github.com/lidofinance/audits/blob/main/Sigma%20Prime%20-%20Lido%20BLS%20Library%20Security%20Assessment%20Report%20v2.0%20-%2001-2026.pdf?ref=blog.lido.fi). An ongoing [Immunefi bug bounty](https://docs.lido.fi/security/bugbounty?ref=blog.lido.fi) offers white hats up to $2M in rewards. - **Built-in operational controls:** The stVaults’ design gives Vault Owners end-to-end control of the funds in the vault: supply/withdraw ETH, mint/repay stETH, monitor vault health parameters and metrics, trigger ETH withdrawals from validators, and perform rebalancing and vault closure or disconnect from the Lido protocol (Web UI support for these actions arriving in H2 2026). *\* Audits, bug bounties, and operational controls are intended to reduce but do not eliminate underlying protocol or market risks. Additional risks may remain or be unidentified.* ## **What It Means for Stakers** By integrating Lido V3 stVaults, Nansen establishes a secure and transparent foundation for its next generation of Ethereum staking products. The stVault architecture advances Lido’s decentralisation roadmap by expanding the operator set, while allowing Nansen to operate at parity with established validators on performance, reliability, and security. Where Nansen differentiates is in everything built around the validator: optional permissionless rewards, Nansen Points, industry-leading onchain analytics, and AI-native integration with trading workflows. Together, stVaults and Nansen’s product layer enable a more complete staking experience, one that preserves Ethereum’s core staking incentives while supporting richer, modern workflows for both advanced retail users and institutional allocators. Looking ahead, Nansen will continue working closely with the Lido ecosystem, both as an active governance participant and as a product builder, contributing a data-driven and transparent perspective to the evolution of decentralised staking infrastructure. ## **Resources** - [Nansen ETH Vault](https://lido.fi/stvaults-products-overview/nansen-eth-vault?ref=blog.lido.fi) featured at Lido stVaults Showcase - [Lido V3 & stVaults](https://lido.fi/stvaults?ref=blog.lido.fi) - [Lido V3 Documentation](https://docs.lido.fi/run-on-lido/stvaults?ref=blog.lido.fi) - [Lido V3 Case Studies](https://blog.lido.fi/category/lido-v3/) ### Lido V3 Is Live: Modular Infrastructure for a New Paradigm of Ethereum Staking URL: https://blog.lido.fi/lido-v3-is-live-modular-infrastructure-for-a-new-paradigm-of-ethereum-staking/ Last updated: 2026-01-30T13:53:59.000Z ### **TLDR** - **Lido V3 is live on Ethereum mainnet**, introducing [**stVaults**](https://lido.fi/stvaults?ref=blog.lido.fi): modular staking infrastructure for builders, powered by stETH. - **Institutions** can deploy **segregated** vaults with dedicated validator infrastructure and **optional stETH liquidity**. - **Node Operators** can move beyond traditional delegated staking and build differentiated offerings with a range of fee structures, APRs and operational setups. - **Builders** can design vaults with **DeFi Wrapper for** **integrated yield strategies, or custom strategies**, including looped staking and curated DeFi. - **Platforms, such as Layer-2 protocols,** can embed staking into existing user flows, turning bridged ETH into a productive asset. - These use cases share a **common layer via stETH**, preserving composability and liquidity across Ethereum DeFi. ## **A New Primitive for Staking Businesses** Lido V3 is live on Ethereum mainnet. The mainnet launch follows a long path of staged validation, including multiple public testnets, security reviews, and a mainnet soft-launch. Lido contributors designed the public launch process to deliver the same qualities that make Lido Core durable: a relentless focus on security, including multiple public audits, community input, and a commitment to open software. This release extends the Lido protocol with the introduction of **stVaults**, a modular staking primitive designed for stakers that need configurations beyond a single pooled model, while still benefiting from stETH’s liquidity and network of integrations. ![](https://blog.lido.fi/content/images/2026/01/V3_BG_1.png) Until now, stakers have faced a structural trade-off: - Choose **pooled liquid staking** for liquidity, simplicity, and DeFi utility, but accept limited customization. - Choose **bespoke staking setups** for control and policy requirements, but accept operational complexity and illiquidity, subject to Ethereum’s entry/exit queue. stVaults resolve the dilemma between bespoke control and liquid utility. They allow customization where it matters (operator selection, policies, fees, reward logic, and risk parameters) while maintaining access to a shared liquidity layer through stETH. stVaults bring a new paradigm to Ethereum staking offerings by enabling any team to build a staking business using the most powerful network effects in DeFi. ## **From Pooled Liquid Staking to Composable Staking Infrastructure** Lido Core proved a simple point: pairing staking with a liquid token unlocks powerful market forces. stETH made staked ETH usable across DeFi for lending, collateral, LP positions, and other strategies, without locking stakers into withdrawal queues as a hard constraint. Lido V3 extends that idea to a wider set of staking models. With stVaults: - **Vault owners define the staking setup** (operators, operating requirements, fee design, risk/reward choices). - **Staked deposits can mint stETH**, keeping staking positions usable across DeFi even when the underlying validator configuration is bespoke. - **Diverse staking products can coexist** while contributing to and benefitting from stETH’s network effects. This structure supports a new paradigm of staking businesses: one that includes regulated institutions, differentiated operator offerings, and builders who need specific controls. ![](https://blog.lido.fi/content/images/2026/01/V3_BG_2.png) ## **Institutional Staking Without Compromising Liquidity** Many institutions already use liquid staking, yet in some cases they require bespoke setups defined by: - Operator segregation and auditability, - Known counterparties and jurisdictions, - Defined operational controls, - and, increasingly, **liquidity**. Traditional staking models often fail modern asset managers because long exit queues and illiquidity risk do not fit treasury and fund requirements. stVaults support this by enabling **segregated vault structures** with dedicated validator infrastructure, while still offering **optional stETH liquidity**. Early stVault deployments illustrate the new design space: - [**Northstake**](https://blog.lido.fi/lido-v3-northstake-simplifying-institutional-ethereum-staking-with-stvaults/)uses stVaults as the foundation for its Staking Vault Manager (SVM), enabling institutions to stake ETH natively across multiple vaults and operators while preserving asset segregation and on demand stETH liquidity. - [**Solstice**](https://blog.lido.fi/lido-v3-solstice-delivering-yield-strategies-for-institutions-retail/)deploys segregated stVaults for compliance-sensitive clients, offering dedicated vaults with funds separation and full traceability, while using Lido V3 to deliver conservative yield strategies and access to the stETH ecosystem. The result: institution-grade staking controls without forcing a hard choice between customization and liquidity. ## **Operator-led Staking Products and Clearer Differentiation** Lido V3 also changes the business case for Node Operators. In the pre–stVaults world, operators largely chose between: - contributing to liquid staking pools like Lido Core, or - running delegated setups that often struggled with illiquidity, cumbersome exits, and limited DeFi utility. stVaults create room for **operator-led products**: vaults mapped to specific validator infrastructure, with customized operational policies. For example, [P2P.org is building](https://blog.lido.fi/v3-p2p-expanding-ethereum-staking-flexibility-with-lido-stvaults/) dedicated stVaults that let institutional clients stake through segregated vaults linked to P2P.org’s validator operations, supporting customization, and transparent performance reporting. The same stVault foundation also enables a broader range of products, spanning conservative staking exposure and more advanced, curator-driven DeFi vault strategies built around stETH. stVaults give operators new levers to compete on what matters: price, performance, and vault configuration. ## **Strategy Design and DeFi Wrapper Product Tooling** stVaults also expand the design space for staking strategies. Early examples include: - **Looped staking strategies** that redeploy staked assets through lending/borrowing markets to compound rewards while maintaining access to liquidity (e.g., [Chorus One’s approach](https://blog.lido.fi/lido-v3-chorus-one-expanding-institutional-staking/)). - **Market-neutral designs** that separate validation from risk management, pairing staking operations with policy enforcement and hedging mechanisms to reduce directional exposure while seeking additional yield (e.g., [Everstake’s approach](https://blog.lido.fi/lido-v3-everstake-institutional-market-neutral-yield-strategies-with-stvaults/)). A second novelty sits alongside strategy flexibility: **tooling that reduces time-to-market** for teams launching user-facing staking products. Lido V3 includes the **“**[**DeFi Wrapper**](https://docs.lido.fi/run-on-lido/stvaults/building-guides/pooled-staking-product/?ref=blog.lido.fi)**” toolkit** aimed at low-code deployments of end-user staking products. The toolkit includes: - **set of contracts** wrapping the stVault and **enabling pooled staking**, - connectors to **Yield-boosting strategies** (GGV on launch), - **white-label UIs** for branded distribution, and - **custom ERC‑20 vault tokens** so teams can productize their vaults for wider distribution. Builders can choose either to utilize **pre-integrated curated strategies** to ship differentiated products without building curation strategies from scratch, or tointegrate **custom strategies** that enable unique competitive advantages in the products for specific segments and markets. ## **Embedded Staking for L2s** stVault modularity also enables staking to move closer to where users already hold ETH. L2s can route bridged ETH into staking and use the resulting yield to support ecosystem incentives or liquidity programs, without introducing a new user journey. Work in this direction includes L2 implementations from [**Linea**](https://blog.lido.fi/linea-lido-bringing-native-yield-to-l2s/), that show how staking can become part of network economics while preserving familiar user flows. This pattern matters because it treats staking as infrastructure: a yield-bearing base layer that protocols can integrate, not just a standalone action users must take explicitly. ## **Start Building on Lido V3 Today** Lido V3 turns liquid staking from a single product category into broader infrastructure for staking businesses. stVaults make it possible to: - design staking setups that fit the needs of a new set of customers, - maintain optional liquidity through stETH, - and keep access to Ethereum’s DeFi ecosystem. Reach out to Lido contributors if your team is building institutional staking products, operator-led offerings, structured DeFi vaults, or L2-native staking integrations. Due to the length of the Ethereum entry queue, contributors are offering an early adopter campaign. Until March 31st 2026, the stVaults Lido Infrastructure fee will be reduced from 1% to 0%. This promotion applies to identified vaults with a Total Value exceeding 250 ETH. [Contact the stVaults team](https://tally.so/r/mVrkZa?ref=blog.lido.fi) to start building stVaults today. For more information on this campaign, refer [here](https://research.lido.fi/t/default-risk-assessment-framework-and-fees-parameters-for-lido-v3-stvaults/10504/4?ref=blog.lido.fi). Start building on Lido V3 today with the [stVaults Documentation Center](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi). For more details on key concepts including Reserve Ratios, risk tiers, and forced rebalancing, see the [Lido V3 Whitepaper](https://docs.lido.fi/lido-v3-whitepaper/?ref=blog.lido.fi). ### Lido V3 & Pier Two x RockSolid: Expanding Institutional Ethereum Staking with stVaults URL: https://blog.lido.fi/lido-v3-pier-two-x-rocksolid-expanding-institutional-ethereum-staking-with-stvaults/ Last updated: 2026-02-09T13:42:57.000Z ## **Product Overview** [Pier Two](https://piertwo.com/?ref=blog.lido.fi) is providing infrastructure services to support the RockSolid AutoPlus Looped ETH Vault, a [Lido V3](https://v3.lido.fi/?ref=blog.lido.fi) stVault designed and managed by [RockSolid](https://rocksolid.network/?ref=blog.lido.fi) to meet institutional demand for stronger liquidity provisioning and broader ETH utility. Built on Lido V3 stVaults, the RockSolid AutoPlus Looped ETH Vault allows institutions to combine Ethereum staking with configurable liquidity access while maintaining institutional grade security, uptime, and validator performance. ## **Initial Approach & Limitations** Institutional adoption of advanced ETH staking strategies remains constrained by a lack of clarity around vault design, security models, and risk differentiation. While demand for additional utility has increased, education around how trust minimized staking infrastructure can support flexible yet conservative institutional use cases remains limited. As highlighted in discussions around [low-risk DeFi](https://vitalik.eth.limo/general/2025/09/21/low%5Frisk%5Fdefi.html?ref=blog.lido.fi), Ethereum’s deep technical and social decentralization enables strong alignment between capital efficiency and protocol-aligned behavior. Lido stVaults extend these trust minimized properties by allowing institutions to engage with staking in programmable, auditable, and adaptable ways, without compromising on security assumptions. RockSolid identified the opportunity to leverage this architecture to deliver flexible, institution-ready staking strategies grounded in transparency and risk management. ## **Why Lido V3 & stVaults** In 2026, Ethereum reached all-time highs in staked ETH and validator entry queue duration, while transaction volumes increased alongside historically low gas costs. At the same time, institutional concerns around liquidity intensified, particularly as exit queues extended beyond 50 days. With the launch of Lido V3, stVaults allow institutions to navigate entry and exit constraints while retaining optional access to stETH liquidity, reducing friction without weakening staking security. By running a dedicated Lido V3 stVault instance, Pier Two enables RockSolid to address challenges across deposits, redemptions, and liquidity while preserving institutional-grade staking performance and operational resilience. ## **Integration & Security Approach** The RockSolid AutoPlus Looped ETH Vault is implemented using the ERC-7540 Asynchronous Tokenized Vault standard, which extends OpenZeppelin’s ERC-4626 to introduce workflows and controls around asset movement and custody. RockSolid’s smart contracts have been audited by Nethermind and incorporate: - A dedicated Lido V3 stVault deployment - MPC-based signing controls - Transparent, onchain-verifiable reporting Pier Two supports this setup by operating the underlying non-custodial validator infrastructure, ensuring robust uptime, performance, and protocol-aligned security. ## **Expected Outcome** Institutional clients can deposit and withdraw ETH subject to Ethereum’s entry and exit queues, while retaining the option to unlock stETH liquidity through Lido V3 when conditions allow—providing flexibility without compromising staking integrity. The RockSolid AutoPlus Looped ETH Vault offers additional utility for institutional users and is designed with conservative risk management at its core. Lido V3 stVaults also enable teams like RockSolid to select their preferred staking provider. In this case, Pier Two delivers proven, non-custodial staking operations, ensuring that all activity remains programmatic, immutable, and transparent onchain. --- ## **Resources** - [Technical Design Documentation](https://docs.lido.fi/deployed-contracts/hoodi-lidov3/?ref=blog.lido.fi) - [V3 User & Integration Guides](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [Lido V3 Whitepaper (RFC)](https://research.lido.fi/t/lido-v3-whitepaper-rfc/10124?ref=blog.lido.fi) - [Lido V3 Testnet](https://v3.lido.fi/?ref=blog.lido.fi) ### Lido V3 & Obol: Multi-Operator Distributed Validators on Lido stVaults URL: https://blog.lido.fi/lido-v3-obol-multi-operator-distributed-validators-on-lido-stvaults/ Last updated: 2026-02-09T13:42:44.000Z ## **Product Overview** [Obol](https://obol.org/?ref=blog.lido.fi) is launching the Ethereum Client Team Vault, a multi-operator, DVT-powered stVault built on [Lido V3](https://v3.lido.fi/?ref=blog.lido.fi). It’s operated by four of Ethereum’s most trusted infrastructure organizations: [Sigma Prime](https://sigmaprime.io/?ref=blog.lido.fi), [ChainSafe](https://chainsafe.io/?ref=blog.lido.fi), [Develp](https://develp.co/?ref=blog.lido.fi), and [Nethermind](https://www.nethermind.io/?ref=blog.lido.fi). Each team builds crucial client software that secures the network. The Ethereum Client Team Vault is designed for ETH-aligned stakers, DAO treasuries, and capital allocators who want to stake in a way that is: 1. **Secure and trusted:** The vault is operated by Ethereum’s client teams using Obol Distributed Validators. 2. **Ethereum-aligned:** The vault supports client diversity and decentralization as core principles. 3. **Low risk:** The vault is a vanilla stVault, with no exposure to looping or exotic DeFi strategies. ## **Initial Approach & Limitations** The Ethereum Client Team Vault solves limitations in pooled staking. Existing pooled staking architectures did not allow users to express preferences for client diversity or multi-operator security models. Additionally, there was no mechanism to create a curated, operator-specific vault where rewards and responsibilities are tied to a defined set of operators. Obol’s product solves this by offering a curated, multi-operator DVT stVault that is credibly decentralized by design. Sigma Prime, ChainSafe, Develp, and Nethermind are part of the core infrastructure teams that build and maintain Ethereum’s client software. Users can stake with the Ethereum Client Team Vault and signal support to the organizations that secure the network. In doing so, they also benefit from their deep operational expertise and alignment with Ethereum’s long-term mission. ## **Why Lido V3 & stVaults?** Building on top of Lido V3 stVaults gives Obol access to one of the most trusted brands in Ethereum staking and battle-tested onchain infrastructure. By leveraging Lido's proven smart contract architecture, Obol doesn't need to build complex deposit flows, new smart contracts, or standalone frontends. Instead, we can focus on what we do best. This partnership lets both organizations play to their strengths: Lido provides the trusted staking infrastructure and tooling, while Obol and the client teams focus on what happens under the hood, delivering best in class uptime, better performance, and running a decentralized, client-diverse DV cluster. This means Obol can give the community a way to signal that they care about client diversity, decentralization, and the core benefits of DVT. ## **Integration & Security Approach** Obol runs multi-operator Distributed Validator (DV) clusters, where validator keys are created using a Distributed Key Generation (DKG) ceremony and key shares are distributed across multiple independent node operators. No single operator can act unilaterally with validator keys. Each node operator runs a diverse infrastructure stack (unique EL/CL clients) to minimize correlated failures and downtime. This ensures high resilience, diversity, and fault tolerance. The Ethereum Client Team Vault launches with a vanilla, conservative configuration. No leverage, no looping, no complex DeFi strategies. This design choice prioritizes brand integrity and risk management over maximizing APR. Validator performance and operator quality are the focus rather than strategy complexity. The Ethereum Client Team Vault is the most secure and trusted option for stakers who believe infrastructure quality matters more than chasing the highest yield. ## **Expected Outcome** The Ethereum Client Team Vault lets users support Ethereum's most trusted infrastructure builders and advance client diversity and decentralization with a low-risk, conservative approach to staking. By choosing operator credibility and security over yield maximization, the Ethereum Client Team Vault establishes a new standard for trust and infrastructure quality in the Lido V3 ecosystem. --- ### **Resources** - [Lido V3 Testnet](https://v3.lido.fi/?ref=blog.lido.fi) - [Lido V3 Whitepaper (RFC)](https://research.lido.fi/t/lido-v3-whitepaper-rfc/10124?ref=blog.lido.fi) - [V3 User & Integration Guides](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [Technical Design Documentation](https://docs.lido.fi/deployed-contracts/hoodi-lidov3/?ref=blog.lido.fi) ### Deribit Reduces Margin Haircut for Lido stETH URL: https://blog.lido.fi/deribit-reduces-margin-haircut-for-lido-steth/ Last updated: 2026-01-21T09:01:11.000Z [Deribit](https://www.deribit.com/?ref=blog.lido.fi) has applied changes to Portfolio Margin parameters and Cross-Collateral haircuts for stETH. Together, these changes improve capital efficiency for stETH holders while preserving conservative risk management practices. **What this means for stETH Holders:** - stETH can be used as collateral across Deribit’s trading products - ETH exposure can be more effectively offset under Portfolio Margin - Margin requirements are reduced via lower cross-collateral haircuts - Staking rewards continue to accrue while stETH is used as margin ## stETH as Cross-Collateral on Deribit stETH is supported as [cross-collateral on Deribit](https://blog.lido.fi/deribit-enables-steth-for-cross-collateral/), allowing users to post stETH as margin for open positions or orders across Deribit’s full derivatives suite, including options, futures, and perpetual contracts. By using stETH as collateral, users can retain Ethereum staking rewards while simultaneously making use of stETH to support active trading strategies. This allows stETH to function as productive collateral without requiring users to sacrifice their staking rewards. ## Portfolio Margin Update stETH was moved into the ETH bucket within Deribit’s Extended Risk Matrix. This allows stETH positions to offset ETH exposure under Portfolio Margin. Additional risk continues to be explicitly priced in through the applied haircut, ensuring risk assumptions remain conservative. ## Cross-Collateral Haircut Adjustments Deribit reduced the margin haircuts applied to stETH: - **Cross Portfolio Margin**: 15.00% → 7.50% - **Cross Standard Margin**: 15.00% → 7.50% Lower haircuts reduce required margin when using stETH as cross-collateral, improving capital efficiency across eligible strategies. These updates reinforce stETH’s role as a core, capital-efficient asset within Deribits institutional-grade derivatives infrastructure. **Learn more about Lido & stETH on Deribit** [**here**](https://blog.lido.fi/deribit-launches-trading-in-lidos-steth/)**.** --- ### **About Deribit** Deribit is a leading cryptocurrency exchange. Founded in 2016, Deribit has quickly become a trusted platform for both institutional and retail traders, offering a secure and highly efficient trading environment. With a focus on innovation and transparency, Deribit provides a wide range of advanced trading tools and deep liquidity, allowing users to hedge, speculate, and manage risk effectively. For further information, please visit [www.deribit.com](https://www.deribit.com/?ref=blog.lido.fi). ### **About Lido Institutional** Lido is an open-source, liquid-staking middleware, that provides a way to participate in the blockchain network validation process and get rewards for this activity. With a mission to democratise staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. Users of the middleware can interact with various third-party DeFi applications that have independently integrated and support the liquid staking tokens. For more information, visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Lido V3 & Northstake: Simplifying Institutional Ethereum Staking with stVaults URL: https://blog.lido.fi/lido-v3-northstake-simplifying-institutional-ethereum-staking-with-stvaults/ Last updated: 2026-02-09T13:42:27.000Z ## **Product Overview** Northstake simplifies the orchestration and management of Ethereum staking for institutional clients. Through its Staking Vault Manager (SVM) and Lido V3 stVaults, Northstake enables institutions to stake ETH natively across multiple vaults and node operators, while retaining access to stETH liquidity. The platform acts as a single point of access for node operator orchestration, staking operations, reward and transaction data, and liquidity management. Institutions can manage staking at scale via Northstake’s UI, API, or SDK, while maintaining asset segregation, operational control, and auditability. ## **Initial Approach & Limitations** Institutional staking comes with strict regulatory, operational, and compliance requirements. Many institutions require clear asset segregation, transparent validator operations, robust reporting, and compatibility with internal custody and governance frameworks. Traditional staking setups often forced trade-offs between operational control and liquidity. While liquid staking tokens such as stETH provide deep DeFi integration, institutions still face challenges in maintaining compliant staking operations, managing multiple node operators, and accessing liquidity without introducing operational complexity. Northstake identified this gap and set out to build a platform that enables institutions to operate dedicated staking infrastructure while retaining access to stETH-based liquidity and Ethereum’s DeFi ecosystem. ## **Why V3 and stVaults?** Lido V3 stVaults provide the foundational infrastructure required to meet institutional requirements at scale: - **Unparalleled liquidity:** By enabling the minting of stETH against assets held in staking vaults, stVaults allow institutions to maintain optional liquidity alongside staked ETH. - **DeFi ecosystem adoption:** Broad support for stETH and wstETH across the DeFi ecosystem allows institutions to deploy liquidity efficiently while continuing to earn staking rewards. - **Security of the Lido protocol:** Lido’s battle-tested, audited infrastructure and decentralised validator set provide an institutional-grade security foundation. stVaults extend this security model by enabling customised vault-level controls. ## **Integration & Security Approach** Northstake has created a set of standardised APIs to manage stVaults across their entire life cycle. This allows institutions to easily manage multiple vaults across different node operators and strategies from a single, unified interface. The Northstake staking platform is fully integrated with node operators, custodians, and liquidity providers, creating an end-to-end system that simplifies operational complexity and ensures compliance at every level. By integrating stVaults, Northstake’s platform leverages Lido’s security approach. ## **Expected Outcome** Through the integration of Lido V3 stVaults, Northstake enables institutional stakers to meet regulatory and operational requirements without sacrificing liquidity or capital efficiency. Institutions gain the ability to operate compliant, segregated staking setups while maintaining access to stETH liquidity and Ethereum’s DeFi ecosystem. Institutions face real challenges when integrating blockchain-native staking primitives into regulated workflows — from compliance requirements to technology stack compatibility. Northstake’s Staking Vault Manager bridges that gap, offering secure, scalable, and auditable connectivity to Lido’s stVault infrastructure. This marks a significant step toward enterprise-ready liquid staking. --- ### **Resources** - [Lido V3 Testnet](https://v3.lido.fi/?ref=blog.lido.fi) - [Lido V3 Whitepaper (RFC)](https://research.lido.fi/t/lido-v3-whitepaper-rfc/10124?ref=blog.lido.fi) - [V3 User & Integration Guides](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [Technical Design Documentation](https://docs.lido.fi/deployed-contracts/hoodi-lidov3/?ref=blog.lido.fi) ### Analysis of stETH in Light of SEC Division of Corporate Finance’s Guidance on Liquid Staking Activities URL: https://blog.lido.fi/analysis-of-steth-in-light-of-sec-division-of-corporate-finances-guidance-on-liquid-staking-activities/ Last updated: 2025-12-19T09:51:30.000Z ## **Executive Summary** In its 5 August 2025 statement, the SEC’s Division of Corporation Finance clarified that certain liquid staking activities and staking receipt tokens generally do not involve the offer or sale of securities under U.S. federal law. The SEC reasoned that the parties involved in the process of minting, issuing, and redeeming staking receipt tokens do not provide entrepreneurial or managerial efforts to staking receipt token holders and any economic benefits realized by staking receipt token holders are not derived from any such efforts but from protocol-level staking. It further confirmed that staking receipt tokens, though evidencing ownership of deposited assets, are not securities because the underlying assets themselves are not securities. The Lido protocol and stETH align with this framework: stETH (and its wrapped version, wstETH) functions as a staking receipt token that evidences a user’s staked ETH and the rewards associated with it, deposits and minting occur programmatically without managerial efforts or discretionary control, users retain ownership of their staked Ether, rewards are generated solely through Ethereum’s Proof-of-Stake consensus mechanism and governance is limited to protocol-level parameters, and there are no promises of returns. Accordingly, Lido protocol’s activities do not involve the offer or sale of securities nor should stETH or wstETH fall within the definition of a “security” under Section 2(a)(1) of the Securities Act or Section 3(a)(10) of the Securities Exchange Act. ## **1\. Lido Protocol and its Activities** The Lido protocol (“**Protocol**”) is a liquid staking middleware that lets users participate in Ethereum’s Proof-of-Stake (“**PoS**”) mechanism without the minimum stake of 32 Ether (“**ETH**”), the lock-up periods associated with direct staking, or needing to run validator infrastructure on their own. Staking users who stake their ETH through the Protocol (“**Users**”) receive stETH tokens, which represent their staked ETH combined with accrued staking rewards, minus potential validator penalties. Users submit ETH to the Protocol which supports the operation of validator nodes and, in return, these Users’ ETH becomes eligible to receive staking rewards. These rewards, which are accrued based on the underlying validators’ participation in Ethereum’s PoS-based validation process, are reflected in Users’ stETH balances (i.e. via an increase in quantity of tokens) on a daily basis as a result of the Protocol rebase, in accordance with their proportional stake. The Protocol also enables Users to mint a non-rebasable version of stETH called wrapped stETH (“**wstETH**”), where accrued rewards are reflected as an increase in the value (in ETH terms) of the tokens, versus as an increase in the quantity of the tokens. The Protocol operates via a set of smart contracts on the Ethereum network that allows for the programmatic and algorithmic operationalization of deposits, rewards distributions and withdrawals in a non-custodial, permissionless and autonomous manner, on-chain. The Protocol acts as decentralized middleware, facilitating staking without taking custody or control of users’ assets, with the general function that User-submitted ETH be utilized for staking on the Ethereum network, or for administrative functions of the protocol (e.g. servicing user withdrawal requests). The underlying validator activities of the Protocol (where Users’ ETH is delegated to) are performed by software run by a diverse, geographically distributed network of independent node operators. Node operators are responsible for running validator nodes in accordance with the Protocol’s technical and operational requirements and play a critical role in maintaining the integrity, security and decentralization of the Ethereum network by validating transactions, proposing new blocks, and participating in the consensus mechanism. Of the gross staking rewards generated by the Protocol, the lion’s share accrues to Users, while the remainder, which constitutes the Protocol fee, accrues to the Lido DAO and Node Operators The exact fee size is defined by the LDO token holders via Lido DAO vote. Currently, the Protocol fee is 10% of staking rewards, which is split algorithmically between node operators and Lido DAO’s treasury. The Ethereum network’s staking rewards are not guaranteed, vary, are dictated solely by the Ethereum’s network’s code-enforced rules, which are not subject to modification by the Protocol. The Protocol’s redemption mechanism is organized as a withdrawal queue served in the ‘first-in-first-out’ order that allows stETH holders to redeem the underlying amount of ETH corresponding to their share of stETH (the Protocol’s staking receipt token), subject to an “unbonding” period. ## **2\. stETH** stETH is a rebasable liquid staking token minted by the Protocol’s smart contracts representing a User’s staked ETH as well as accrued rewards and penalties. Unlike directly staked ETH, stETH allows a User to support securing the network via staking activities and participate in staking, earning rewards while retaining liquidity through the flexibility of a transferable, tradable ERC-20 token. Upon staking ETH through the Protocol, the User receives stETH at a one-to-one ratio. The stETH tokens reflect the nominal value of the deposited ETH at the time of minting, with daily automatic rebalancing to reflect accrued staking rewards and applicable slashing losses. It further acts as a receipt token, allowing for the User to redeem before the Protocol an equivalent amount of ETH. Users can utilize the stETH token within decentralized applications, such as collateral, lending or liquidity provision, while their ETH remains staked. ## **3\. wstETH** To allow for the use of staked ETH in some decentralized finance protocols that require a constant token balance, the Protocol enables Users to wrap their stETH into wstETH. wstETH is a non-rebasing version of stETH that, like stETH, utilizes an underlying shares model. While stETH reflects a User’s balance through a rebasing formula - calculated as the User’s number of shares divided by the total stETH supply multiplied by the total ETH in the Protocol - wstETH maintains a constant balance of the ratio of shares held to the total stETH supply, and thus increases in value over time. Accordingly, unlike stETH, the balance of wstETH tokens remains fixed over time, but the value of each wstETH token increases to reflect the User’s staked ETH together with accrued rewards or penalties, in the same manner as stETH. wstETH is created by wrapping stETH via the wstETH contract, or by submitting ETH directly to the wstETH contract. A User’s wstETH balance can only change through transfers, minting, or burning. At any time, holders of wstETH may unwrap it back into stETH. Upon conversion, the amount of stETH received will have increased in comparison to the amount originally wrapped to reflect the accrued rewards, unless reduced by applicable penalties. ## **4\. SEC’s View on Liquid Staking Activities** In its August 2025 statement, the SEC’s Division of Corporation Finance clarified that liquid staking arrangements, where depositors receive staking receipt tokens representing ownership of deposited crypto assets, do not generally involve the offer or sale of securities under the Securities Act or the Exchange Act. “Liquid Staking”, as used in this statement, refers to a form of protocol staking where users deposit crypto assets with a service provider and receive newly minted staking receipt tokens (“**SRTs**”) in return. These tokens evidence ownership of the deposited assets and any rewards that accrue, while allowing users to maintain liquidity without having to withdraw the staked assets. Holders can redeem the tokens for the underlying assets, subject to an unbonding period, freely transfer them, exchange them, and may use them as collateral or in other crypto applications, including those that can provide a return to the holder (although any such transactions are separate and independent of the actual staking activity itself). Liquid staking can be carried out either through protocol-based providers, which rely on smart contracts and self-executing code without intermediaries (also known as “smart contracts”), or through third-party custodians, which hold assets in wallets and issue tokens themselves. In protocol-based Liquid Staking, users deposit their assets into a protocol where deposited assets are held in a smart contract on behalf of the users, and the deposited assets are staked on behalf of the users and an SRTs is issued to the users, all in a programmatic manner through smart contracts. The minting, issuing and redeeming of the SRTs is performed without the need for or reliance upon a third-party intermediary. When using a third-party service provider, such as a custodian, users deposit their assets with the third-party service provider, who holds the deposited assets in a digital wallet on behalf of the users, stakes the deposited assets on behalf of the users, and issues SRTs to the users. The minting, issuing and redeeming of the SRTs is performed by the third-party service provider. In both cases, rewards and losses are reflected programmatically, either by changing the value represented by each token or by increasing or decreasing the number of tokens issued, and at all times the deposited assets remain in the control of the Liquid Staking provider and the user (or any subsequent transferee of the user’s SRTs) is intended to retain ownership of the deposited assets. The SEC’s Division of Corporation Finance concluded that these activities, when structured as described, as well as the offer and sale of SRTs (including in secondary markets), in the manner and under the circumstances described in such statement, do not involve the offer or sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the “**Securities Act**”) or Section 3(a)(10) of the Securities Exchange Act of 1934 (the “**Exchange Act**”). Consequently, neither the participants in Liquid Staking activities nor Liquid Staking providers involved in the process of minting, issuing and redeeming SRTs need to register those transactions with the SEC under the Securities Act or fall within one of the Securities Act’s exemptions from registration, unless the deposited assets are part of or subject to an investment contract. ### ***Investment Contract*** Sections 2(a)(1) of the Securities Act and 3(a)(10) of the Exchange Act define “security” by listing various instruments such as stocks, notes, and bonds. Crypto assets are not included in this list, so when assessing transactions involving them in the context of Liquid Staking, the SEC applies the Howey test, which focuses on the economic realities of a transaction. Under Howey, an arrangement constitutes an investment contract if there is an investment of money in a common enterprise with a reasonable expectation of profits derived from the managerial or entrepreneurial efforts of others. Courts have clarified that only significant managerial efforts affecting the enterprise’s success satisfy this standard, while administrative or ministerial tasks do not. The SEC clarifies that, in Liquid Staking, providers do not supply the kind of entrepreneurial or managerial efforts that would meet the Howey test. They act merely as agents, staking assets on behalf of depositors without deciding whether, when, or how much to stake. Even where providers hold deposited assets, or select a node operator, the SEC argues that these are administrative functions rather than managerial ones. Liquid Staking providers also do not guarantee or determine the level of staking rewards, though they may deduct a fee from those rewards. Ancillary services they may offer, such as facilitating deposits, withdrawals, or token issuance, are similarly administrative and do not involve entrepreneurial judgment. As a result, Liquid Staking arrangements lack the managerial or entrepreneurial efforts required under Howey for an investment contract to exist. ## **5\. SEC’s View on Staking Receipt Tokens** The SEC argues that the SRTs issued to a user as part of a Liquid Staking arrangement do not constitute any of the financial instruments specifically enumerated in the definition of “security” in Sections 2(a)(1) of the Securities Act and 3(a)(10) of the Exchange Act. This is because whilst users are entitled to rewards accruing with respect to their deposited assets, the SRT itself does not generate rewards. Rather, rewards are generated from the underlying protocol staking activities, which do not involve securities transactions. It also states that, although the definition of “security” specifically includes “receipt for” any security, the SRTs, which act as “receipts” evidencing ownership of the underlying deposited crypto assets, are not securities since the deposited assets (e.g., ETH) are also not securities. If SRTs are not securities in themselves, the question becomes whether they might still be offered or sold as part of an investment contract, which must be assessed under the Howey test. The SEC concluded that SRTs do not meet this standard because the parties involved in minting, issuing, and redeeming them do not provide the entrepreneurial or managerial efforts on which investors would rely to realize any economic benefits. The value of the SRTs is tied directly to the underlying deposited crypto assets, not to the efforts of a liquid staking provider or any other third party. Rewards accrue through protocol-level staking, which the SEC has already determined does not involve securities transactions. However, the SEC cautioned that this view only applies where providers remain limited to administrative and ministerial activities. If providers were to go beyond that scope or issue tokens under different conditions, such activities could fall outside the scope of the statement and securities laws could become applicable. ## **6\. Comparison: Lido Protocol, stETH and wstETH vs. SEC Guidance** When compared against the SEC’s guidance, the Protocol and its issuance of stETH and wstETH appear to fit squarely within the type of liquid staking activities and SRTs that the SEC has stated do not involve the offer or sale of securities. ### *The Protocol* The Protocol operates through smart contracts on the Ethereum network. These smart contracts function without discretionary involvement or managerial efforts from its developers or contributors. Users can interact directly with such smart contracts to deposit ETH and, in return, receive newly minted stETH at a one-to-one ratio. The stETH token evidences ownership of the underlying staked ETH as well as any rewards and penalties, which are reflected programmatically. The token allows Users to maintain liquidity that they can use as collateral or to participate in crypto applications, notably within the decentralized finance ecosystem. The role of the Lido DAO is limited to setting parameters, such as protocol fees. No centralized entity guarantees returns or exercises discretion over the amount or timing of staking. In accordance with the SEC’s guidance, such governance framework does not amount to the type of entrepreneurial or managerial efforts required under the Howey test to establish an investment contract. In addition, the redemption process, structured through a withdrawal queue and subject to an unbonding period, is likewise consistent with the SEC’s view that such mechanisms do not alter the analysis of whether staking receipt tokens constitute securities. Similarly, secondary market use of stETH, including its use as collateral or in decentralized applications, does not implicate the registration of those transactions with the SEC under the Securities Act or fall within one of the Securities Act’s exemptions from registration. ### *stETH and wstETH* The stETH and wstETH tokens do not generate staking rewards by themselves nor are such rewards attributable to the Protocol or to the entrepreneurial or managerial efforts of third parties. All rewards derive solely from the participation in Ethereum's PoS consensus mechanism. Functionally, both stETH and wsETH merely serve as a receipt token representing a User's deposited ETH as well as any staking rewards and slashing penalties. With regards to its underlying asset, SEC’s representatives have previously noted that ETH should not be classified as a security and that offers and sales of ETH are not securities transactions. Accordingly, because the underlying asset of both stETH and wsETH is ETH and both tokens simply reflect a User’s exposure to staked ETH using the Lido protocol, neither stETH nor wstETH should not be considered securities or receipts for a security. ## **7\. Conclusion** Based on the SEC’s 5 August 2025 statement, the Protocol’s activities do not involve the offer or sale of securities nor should stETH or wstETH fall within the definition of a “security” under of Section 2(a)(1) of the Securities Act or Section 3(a)(10) of the Securities Exchange Act. --- **Disclaimer:* This document is for informational purposes only and does not constitute an offer or solicitation to participate in liquid staking. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors. The information contained in this document has been obtained from sources believed to be reliable, but we do not guarantee its accuracy or completeness. Past performance is no guarantee of future results. The value of crypto assets may fluctuate, and you may lose some or all of your contribution. Crypto products are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The risks associated with purchasing, storing, and trading in cryptocurrencies in general, including but not limited to regulatory, technological, and market risks, are significant and should be very carefully considered. This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local laws or regulations. As the Lido middleware is a decentralised software application, it is your own duty to research and understand the laws applicable to your participation in liquid staking. No financial, legal, regulatory, tax, or accounting advice.* ### WisdomTree Launches First Fully Staked ETH ETP Backed by stETH URL: https://blog.lido.fi/wisdomtree-launches-first-fully-staked-eth-etp-backed-by-steth/ Last updated: 2025-12-04T11:50:51.000Z WisdomTree’s fully staked ETH ETP is now live. The WisdomTree Physical Lido Staked Ether ETP (LIST) is the first European ETP to hold only stETH minted via the Lido protocol, offering a structure that avoids the unstaked buffers traditional products often use for creations and redemptions. LIST trades on Deutsche Börse Xetra, SIX Swiss Exchange and Euronext in Paris and Amsterdam. It holds stETH, providing exposure to staked ETH and corresponding onchain staking rewards through a listed product format that fits into existing institutional workflows. LIST begins trading with approximately $50 million in assets under management and has a management expense ratio (MER) of 50 basis points. ## **Why stETH Supports This Structure** stETH is a core part of Ethereum’s market infrastructure and is the largest liquid staking token, representing nearly [25 per cent of all staked ETH](https://dune.com/lido/lido-morning-coffee-dashboard?ref=blog.lido.fi) with around 8.5 million ETH staked through the Lido protocol. It is integrated into major DeFi applications, supported by centralized venues and available through leading institutional custody providers. This scale and integration contribute to stETH’s deep liquidity, with around $100 million of stETH executable within 2 percent of its redemption value (based on CoWSwap solver quotes) and roughly $10 billion used as collateral across DeFi. This liquidity allows creations and redemptions to be processed smoothly through secondary markets rather than lengthy [validator withdrawal queues](https://www.validatorqueue.com/?ref=blog.lido.fi), which is necessary for a fully staked structure. The Lido protocol distributes staked ETH across more than 650 node operators globally. This breadth of operators reduces reliance on any single provider and supports transparency onchain, aligning with the high operational expectations for fully staked products. Together, these characteristics make stETH the only liquid staking token that currently meets the operational profile required to support a fully staked ETP. ## **Europe’s Role in Institutional Staking Access** Europe has established a clear regulatory framework for physically backed crypto ETPs, including those that hold staked assets. In this environment, launching LIST demonstrates how stETH can be incorporated into regulated market infrastructure and accessed through the channels institutions already use. ETPs, and eventually ETFs, can link existing operational processes with onchain transparency in a format institutions already understand. ## **What This Launch Represents** [Kean Gilbert](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi), Head of Institutional Relations at Lido Ecosystem Foundation, said: *“stETH is already the most widely used path for institutions to access Ethereum’s staking economy. Bringing it into a fully backed ETP is a natural next step and gives allocators a structure they know, without losing the depth of liquidity and the strong security that makes Lido's stETH valuable.”* [Dovile Silenskyte](https://www.linkedin.com/in/dovilesilenskyte?ref=blog.lido.fi), Director, Digital Assets Research, WisdomTree, added: *“Lido Staked Ether sits at the centre of Ethereum’s transition to a yield-bearing network. It allows holders to earn staking rewards without locking up capital, creating liquidity and efficiency that extends across decentralised finance. The combination of income and utility within Lido Staked Ether reflects the growing maturity of the digital asset ecosystem and its evolution toward more functional, long-term use case.”* ## **Building Resilient & Transparent Staking Infrastructure** The introduction of a fully staked ETH ETP aligns with ongoing progress across custody, market infrastructure and treasury systems that incorporate stETH into institutional workflows. These developments show how stETH is moving into a wider range of institutional settings. Broadening access through custodians, infrastructure providers and listed products helps maintain a reliable, transparent staking environment that can operate at scale as institutional participation grows. --- ### **About WisdomTree** WisdomTree is a global financial innovator, offering a well-diversified suite of exchange-traded products (ETPs), models and solutions, covering equity, commodity, fixed income, leveraged and inverse, currency, cryptocurrency and alternative strategies. WisdomTree currently has approximately $139.5 billion in assets under management globally, inclusive of assets under management attributable to our recently completed acquisition of Ceres Partners, LLC. For more information about WisdomTree, visit [www.wisdomtree.com](https://www.wisdomtree.com/?ref=blog.lido.fi). - [**Follow WisdomTree on X**](https://x.com/wisdomtreeeu?ref=blog.lido.fi) - [**Follow WisdomTree on LinkedIn**](https://www.linkedin.com/company/wisdomtree-europe-etfs?ref=blog.lido.fi) *WisdomTree® is the marketing name for WisdomTree, Inc. and its subsidiaries worldwide.* ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For more information, visit [lido.fi/institutional](https://lido.fi/institutional?ref=blog.lido.fi). - [**Follow Lido on X**](https://x.com/LidoFinance?ref=blog.lido.fi) - [**Follow Lido on LinkedIn**](https://www.linkedin.com/company/lidofi/?ref=blog.lido.fi) ### Lido Validator and Node Operator Metrics: Q3 2025 URL: https://blog.lido.fi/lido-validator-and-node-operator-metrics-q3-2025/ Last updated: 2025-11-20T14:43:39.000Z ## Highlights - +9.46% growth in unique Node Operators with 59 new operators joining (most through the Community Staking Module). - \~545,000 staked ETH now operated using Distributed Validator Technology (DVT) via Obol, SafeStake and SSV Network. - Introduction of a new section on Auxiliary Proposer Mechanisms (APMs), detailing how Lido Node Operators utilize various block proposal mechanisms on Ethereum. The latest Q3 2025 VaNOM report is now live and available [here](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/VaNOM-Lido-on-Ethereum-Validator-Node-metrics-1vnpSDa7PtbyA6HX0bVNj1/latest?ref=blog.lido.fi). ## Basic Stake & Operators Statistics In Q3 2025, both the Simple DVT Module and the Community Staking Modules reached their respective stake share limits—4% and 3%—together accounting for roughly 600,000 staked ETH within the Lido protocol. As of October 1, 2025, these two decentralized modules represented 1.67% of the total Ethereum stake, marking continued progress toward diversifying and empowering permissionless participation in the Lido Node Operator set. - **Community Staking Module (CSM)**The CSM recorded the strongest growth across the Lido Staking Modules (SM), expanding by 0.99 percentage points (+72,448 ETH) and reaching its 3% stake share limit. On October 2, this cap was increased to 5% as part of the [CSM v2 upgrade](https://blog.lido.fi/community-staking-module-v2-launch-scaling-permissionless-staking-empowering-community-stakers/). - **Simple DVT Module (SDVTM)** The SDVTM added 32,224 ETH (+0.61pp), with all clusters—36 regular Obol, 36 regular SSV Network, and 10 Super Clusters (five on Obol and five using SSV Network)—fully allocated by the quarter’s end. The module also reached its 4% limit share set by the Lido DAO. - **Curated Module** The largest Lido SM saw a 1.59pp decrease, or 680,032 ETH reduction in stake, as most protocol withdrawals were processed through it. Around one-third (223,456 ETH) of those withdrawals were a [precautionary measure in response to the Kiln security incident](https://research.lido.fi/t/security-disclosure-kiln-precautionary-out-of-order-exits-in-response-security-incident/10654?ref=blog.lido.fi), which prompted the exit of 6,983 validators operated by the Kiln team. Pier Two, previously running 1,000 active validators, was allocated 2,766 additional ones, reaching a total of 3,766 by the third quarter’s end, thereby improving the stake distribution balance across the Curated Module. ![](https://blog.lido.fi/content/images/2025/11/data-src-image-0f2c1b72-e93d-42aa-b2e9-36dbbdf86fcf.png) ## Distributed Validator Technology Adoption Up until the previous quarter, the Simple DVT and the Community Staking were the only modules within the Lido protocol utilizing Distributed Validator Technology (DVT) through Obol, SafeStake, and the SSV Network solutions. As DVT adoption across Ethereum has accelerated and it has proven the reliability in both the SDVTM and CSM, Lido contributors proposed extending DVT usage to the Curated Module, allowing [operators in the Curated Set to opt into intra-operator DVT setups](https://research.lido.fi/t/proposal-curated-module-intra-operator-dvt-guidelines/10197?ref=blog.lido.fi). This proposal was approved by LDO tokenholders during the June 2025 voting slot, marking a key step toward further protocol decentralization and enhanced fault tolerance. As of October 1, 2025, a total of 547,968 ETH (17,124 validators) across the protocol are powered by Obol, SafeStake, and SSV Network DVT implementations. Following rigorous testing on the Hoodi testnet, Q3 2025 saw the first five Curated Node Operators — A41, Blockscape, Ebunker, RockX, and Stakin — successfully migrated 4,900 validators (156,800 ETH) to Obol and SSV Network setups. This shift increased total DVT utilization across the Lido protocol to 17,124 validators, a 57.65% quarter-over-quarter rise from 10,862 validators in Q2 2025. ![](https://blog.lido.fi/content/images/2025/11/data-src-image-449b2785-3122-4ad6-b7ad-523a8c8446f7.png) In the Simple DVT Module, 5,300 validators use Obol and 5,342 use SSV Network setups-up by +80 and +1,087 from Q2, respectively-run by 217 and 229 operators. Within the CSM, where DVT usage is fully voluntary, its adoption also expanded: 332 more validators utilize the SSV Network, compared to the second quarter, and 66 validators across eight operators are supported by Obol. SafeStake, utilized in the CSM only, maintains a steady eight validators operated by four operators. This adoption across different staking modules clearly demonstrates how DVT is becoming increasingly common among the Lido validator setup. Collectively, this growing DVT utilization—from permissionless to the Curated Module—reflects Lido’s continued progress toward a more decentralized, diversified, and robust validator network. ## Curated Module Consensus Client Diversity The adoption of Obol and SSV Network DVT setups within the Curated Module further expanded Consensus Layer (CL) client diversity, thereby contributing to a reduction of the probability of supermajority and finality risks. Starting Q3 2025, these setups have powered 5,900 Curated Module validators, resulting in 1.94% now operating via SSV Network (4,800 validators) and 100 using Obol, which has recently begun ramping up and is expected to increase in the coming quarters. Beyond DVT-related client setups, Vouch, developed by Attestant, remains a key component in this diversification. Designed to work with multiple Beacon Nodes, it provides additional flexibility and security and is now used by 22.59% of CM validators. When compared to the pan-Ethereum CL client landscape, where Lighthouse remains dominant at 48.57% (up from 47.96% in Q2), Lido’s Curated Module maintains a more balanced distribution. - Lighthouse and Vouch each account for roughly a quarter of all Curated Module validators (26.70% and 22.59%, respectively, with minor quarterly variation). - They are followed closely by Teku (18.52%) and Prysm (15.44%). - Nimbus grew modestly to 11.77%, keeping up its share with other clients in the Curated Module set. ![](https://blog.lido.fi/content/images/2025/11/data-src-image-6fb0bed6-b05a-47f0-a6c9-c2d7a59ab784.png) This consistent diversification across Lido’s Curated Module is a result of the Node Operators' commitment to client diversity and fault-tolerance to mitigate supermajority and correlated failure risks. By fostering balanced usage across multiple CL clients, Lido continues to strengthen Ethereum’s overall health and network resilience. ## Auxiliary Proposer Mechanisms Utilization The [Auxiliary Proposer Mechanisms (APM) framework](https://blog.lido.fi/advancing-ethereum-block-proposals-with-lido-a-simple-guide-to-auxiliary-proposer-mechanisms-apms/) enables Lido to safely explore and adopt emerging tools related to block proposal on Ethereum, while maintaining the protocol's decentralization and security standards. These mechanisms, designed to enhance block production efficiency, reliability, and flexibility, are integral to Ethereum’s evolving architecture and can’t be ignored as they unlock potential rewards for stakers and new efficiencies for Node Operators. The chart below illustrates how Node Operators in the Curated Module are adopting available infrastructure setups as of Q3 2025\. A well-known example is Proposer-Builder Separation (PBS), a design that separates block building from block proposing to prevent transaction censorship at the network level and improve fairness in block rewards. Its most widely adopted implementation, MEV-Boost, is currently used by around half of the Lido validators. Other APM implementations active within the Lido protocol include: Vouch utilized by 22.6% of operators; Commit Boost’s PBS Module-by 19% of operators. Additionally, Consensus Layer clients' native support of direct interaction with the MEV Boost Protocol are used only by 2.8% of Lido validators, as it offers more limited functionality compared to the MEV-Boost sidecar setup. ![](https://blog.lido.fi/content/images/2025/11/data-src-image-bac84564-94c8-4420-8ef4-0e3dc1ba6e78.png) The pie chart above reflects Lido contributors’ conscientious approach to adopting APMs, ensuring that as Ethereum’s proposer infrastructure evolves the Lido protocol remains at the forefront of innovation without compromising on safety or ethics. ## Looking Ahead The months leading up to 2026 are set to bring more improvements across the Lido Validator Set. On October 2, the [CSM v2 upgrade went live on mainnet](https://blog.lido.fi/community-staking-module-v2-launch-scaling-permissionless-staking-empowering-community-stakers/), increasing stake share limit to 5%, introducing differentiated parameters for various Node Operator (NO) types, and enabling the optional Identified Community Staker (ICS) framework. The latter marks a significant milestone in Lido’s roadmap, empowering more independent operators to participate in Ethereum validation. Expect upcoming quarters to reflect these changes across CSM-related metrics and validator charts. Continuation of DVT adoption within the Curated Module is also on the horizon, following commitments made by the CM Node Operators on the [Lido Research Forum](https://research.lido.fi/t/proposal-curated-module-intra-operator-dvt-guidelines/10197?ref=blog.lido.fi), which will further strengthen validator resilience and diversity within the set. Finally, the forthcoming Lido V3, Staking Router v3, and Curated Module v2 upgrades will collectively reshape how Node Operators engage with the protocol, expanding flexibility, improving modularity, and setting the stage for the next phase of Ethereum staking evolution. As always, Lido DAO contributors will continue to refine the protocol’s metrics and dashboards to reflect its growing complexity and ensure data-driven accountability. Stay tuned for the next VaNOM update—and in the meantime, explore the[ Lido Node Operator Portal](https://operatorportal.lido.fi/?ref=blog.lido.fi) and [Validator Set Updates](https://operatorportal.lido.fi/?ref=blog.lido.fi#:~:text=Validator%20Set%20Updates%20DB) for monthly insights. ### Lido Poolside Recap: Tokenholder Update, November 2025 URL: https://blog.lido.fi/lido-poolside-recap-tokenholder-update-november-2025/ Last updated: 2025-12-01T14:29:52.000Z November Lido Poolside community call was dedicated to the LDO tokenholders update. [Vasiliy](https://x.com/%5Fvshapovalov?ref=blog.lido.fi), Executive Director at the Lido Labs Foundation, provided an update on the Lido protocol’s market position and financials, presented the buyback framework, and gave a strategic outlook for 2026, which will be proposed for a DAO in the ongoing GOOSE cycle. **Read the highlights below or** [**watch the full recording**](https://www.youtube.com/live/cZNmLa-Lc7A?ref=blog.lido.fi)**.** ## **Agenda** 1. Market state 2. Financial update 3. Buybacks 4. Strategic outlook 5. Q&A Highlights ## **Key Points** The Lido Labs Foundation is advancing its product roadmap, with a positive impact on market share expected in late Q4 or early Q1 2026\. - Lido Labs is building a new operational discipline with new product streams being developed, organizational cost efficiency being improved, and the costs of revenue being lowered for the DAO. - The [buyback proposal](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894?ref=blog.lido.fi) is live, outlining how Lido DAO can direct surplus revenue into LDO value accrual. - With [GOOSE-3](https://research.lido.fi/t/lido-labs-goose-3-lido-s-next-chapter/10927?ref=blog.lido.fi), Lido Labs proposes a shift toward a multi-product model and a move closer to the customer, with a long-term vision of becoming the primary DeFi gateway for real businesses. ## **Introduction** ### **Lido Protocol Fundamentals** Lido is a liquid staking protocol on Ethereum, providing [a simple and secure way to stake ETH](https://lido.fi/how-lido-works/lido-staking-protocol?ref=blog.lido.fi). - It offers capital-efficient functionality with DeFi liquidity integrations throughout the ecosystem. - The protocol aims to provide participants with fast unstaking, allowing swapping stETH on secondary markets. Lido protocol is governed by Lido DAO, a decentralized autonomous organisation of LDO tokenholders. [Through the governance process](https://lido.fi/governance?ref=blog.lido.fi), the tokenholders set parameters, approve upgrades to the Lido protocol, manage the Lido DAO Treasury allocations, define goals, and authorize grants for the [Lido Labs](https://research.lido.fi/t/establishment-of-lido-labs-borg-foundation-as-a-lido-dao-adjacent-foundation/9344?ref=blog.lido.fi), [Lido Ecosystem](https://research.lido.fi/t/establishment-of-lido-ecosystem-borg-foundation-as-a-lido-dao-adjacent-foundation/9345?ref=blog.lido.fi), and [Lido Alliance](https://research.lido.fi/t/organize-the-lido-alliance-program-as-a-lido-dao-adjacent-borg/8173?ref=blog.lido.fi) Foundations. **Lido Labs Foundation** is fully subject to DAO governance decisions and, by its bylaws, required to follow tokenholder-approved directives. It develops and maintains the protocol’s codebase, upgrades, and new features. The current leadership team is led by Executive Director Vasiliy Shapovalov, with [Isidoros Passadis](https://x.com/IsdrsP?ref=blog.lido.fi) as Chief of Staking and [Sam Kim](https://x.com/samkim118?ref=blog.lido.fi) as Chief Legal & Operating Officer. ## **Market State** In Q3, Lido protocol’s portion of staked ETH maintained its leading position with 23.7%, despite increased competition from centralized exchanges (Coinbase, Binance, and Kraken) and staking providers servicing large institutional stakers. The rest of the ecosystem saw a contraction: a key driver was deleveraging, when funds running delta‑neutral strategies cut exposure on both the long side (liquid or illiquid staking) and the stablecoin side. ![](https://blog.lido.fi/content/images/2025/12/data-src-image-c2fbe7fe-e971-4011-9cc8-6e1d13380efb.png) Over the quarter, Lido protocol’s share declined (-1.0pp compared to Q2), but went back onto the growth trajectory at the beginning of Q4\. ![](https://blog.lido.fi/content/images/2025/12/data-src-image-2960eafa-f2dc-445a-b25f-633c451ded86.png) ### **Lido Protocol: Market Segments** From the Lido protocol’s perspective, the Ethereum staking market can be divided into five main segments: - **Simple liquid staking** — traditional liquid staking without added layers or leverage (e.g., stETH by Lido, RETH by Rocket Pool). Users deposit ETH and receive a liquid staking token in return. This segment declined by one percentage point as some funds reduced their delta-neutral strategies and exposure. - **Exchange staking** — staking through centralized exchanges such as Binance, Coinbase, or Kraken. These custodial products keep users’ ETH offchain, meaning it generally can’t be utilized in DeFi. The segment’s overall share remained stable through the quarter. - **Low-risk staking** — delegated or self-staking, typically preferred by institutional stakers, custodians, and funds. This generally involves larger deposits, lower staking rewards, and illiquidity, as ETH is locked in staking. This segment grew by roughly 4pp, driven by the entry of more institutional players and treasury managers. - **APR Maxis** — high-complexity strategies like restaking and leveraged staking, that aim to amplify rewards through additional mechanisms (e.g., Ether.fi, StakeWise). The segment contracted slightly as DeFi deleveraging continued, but Lido protocol’s participation within this segment rose due to the introduction of new products, such as [Lido Earn](https://blog.lido.fi/introducing-earn-steth-powered-vaults-for-advanced-defi-strategies/) and integrated vault strategies. - **Other/uncategorized** — smaller or unidentified setups, such as bespoke institutional products or non-pooled staking. ![](https://blog.lido.fi/content/images/2025/12/data-src-image-941bf87d-e274-405d-b1ca-9465fe8b6817.png) ### **Lido Protocol: Share by Segment** Lido participation across staking segments remained largely stable over Q2–Q3 2025\. The protocol continues to have a strong presence in the simple liquid staking category, maintains a limited role in exchange-based staking, has no participation in low-risk staking, and shows a slight increase in activity within higher-complexity strategy segments, influenced partially by recent integrations. ![](https://blog.lido.fi/content/images/2025/12/data-src-image-c22c8a23-1ced-40b4-ae62-d2ff39143185.png) **Simple Liquid Staking** This segment represents around 21% of the total Ethereum staking ecosystem. The participation of the Lido protocol within this segment is around 89%, reflecting a stable presence. The recent one-percentage-point reduction in share was primarily driven by withdrawals, rather than by competitive pressure. *Important updates:* - Community Staking Module v2 upgrade launched in October. It enables more independent operators to participate in Ethereum validation through the optional [Identified Community Staker (ICS) framework](https://blog.lido.fi/unlock-exclusive-benefits-as-an-identified-community-staker/) and introduces improvements aimed at enhancing the module’s security, efficiency, and decentralization. The introduction of the new Node Operator reward structure allowed for an increase in the portion of staking rewards flowing to the DAO to \~6%, as only CSM operators with Identified Community Staker status are eligible for the enhanced rewards. - A proposal to[adjust the fee structure for Node Operators in the Curated Module](https://research.lido.fi/t/proposal-curated-module-fee-changes/10876?ref=blog.lido.fi) has been published, given increasing competition in the staking market and in light of proposed changes that will be brought by Staking Router v3 and Curated Module v2\. The latter should allow transition from a fixed operator fee model to a dynamic, market-based routing system. - Based on current calculations, the revised structure is anticipated to generate an additional 2,600 ETH yearly in protocol-rewards in 2026\*. This actual outcome may vary based on validator performance, overall network and market conditions. *\* Please note that the projection above has been updated from the one presented during the Lido Poolside call to reflect refined estimates and current market conditions.* **Exchange Staking** This segment accounts for around 25% of the market, with Lido protocol accounting for a modest 2%. It still remains challenging for decentralized protocols to access this segment, primarily due to custodial constraints and regulatory barriers that limit integration with 3rd-party products. **Low-Risk Staking** The Lido protocol currently has no direct participation in this segment, though there is early traction through ongoing discussions with custodians. *Key Enabler for Growth*The launch of[Lido V3](https://v3.lido.fi/?ref=blog.lido.fi) should mark a breakthrough for the Lido protocol's entry into the low-risk staking segment, offering instant liquidity on demand for delegated staking, which is a significant improvement in utility over regular delegated staking. This approach combines liquidity with optional access to DeFi applications and their rewards, as well as participation in certain traditional finance platforms through the ability to use the liquid component of staked ETH within borrowing mechanisms offered by third parties. Several leading node operators—[Solstice](https://blog.lido.fi/lido-v3-solstice-delivering-yield-strategies-for-institutions-retail/), [Chorus One](https://blog.lido.fi/lido-v3-chorus-one-expanding-institutional-staking/), [Everstake](https://blog.lido.fi/lido-v3-everstake-institutional-market-neutral-yield-strategies-with-stvaults/), and [P2P](https://blog.lido.fi/v3-p2p-expanding-ethereum-staking-flexibility-with-lido-stvaults/)—are already developing solutions utilizing stVaults’ design. On top of that, Linea has integrated [stVaults for Native Yield](https://blog.lido.fi/linea-lido-bringing-native-yield-to-l2s/), a new protocol mechanism that enables automatic, directly integrated Ethereum staking rewards. Another development is in the ETP and ETF space, where[ VanEck’s stETH ETF filing](https://blog.lido.fi/vaneck-files-for-lido-staked-eth-etf/) is currently under review in the U.S. **APR Maxis** This segment represents approximately 17% of the total market. The participation of the Lido protocol within this segment is about 38%, which includes roughly 22% leveraged staking, 15% restaking collateral, and 1% related to [Lido Earn](https://stake.lido.fi/earn?ref=blog.lido.fi) activity, which expanded from $21.7 million in January to $205.1 million in November 2025\. For more details, refer to the respective[ Dune dashboards](https://dune.com/lido/lido-dashboards-catalogue?ref=blog.lido.fi). This increase aligned with the launch of [GGV](https://blog.lido.fi/lido-ggv-vault-access-to-defi-strategies/) and [stRATEGY](https://blog.lido.fi/introducing-the-lido-strategy-vault/) Vaults, reflecting the interest from users in the higher-complexity integrations. Overall, Lido Earn’s activity contributed to an estimated 3–5% increase in the DAO revenue. ![](https://blog.lido.fi/content/images/2025/12/data-src-image-dcc1428e-725b-4285-b042-e217b33165db.png) ## **Financial Update** ### **Lido Protocol: Operational Model** The Lido protocol’s core operational model remains unchanged. Users deposit ETH into the Lido protocol and receive stETH (staked ETH) in return, a liquid token that can be utilized across the broad DeFi ecosystem. ETH is allocated through the Staking Router into various Staking Modules. Ethereum staking rewards flow back to the Lido protocol, with 90% distributed to stakers, approximately 5% (depending on the Staking Module) allocated to Node Operators, and the remainder directed to the Lido DAO Treasury. ![](https://blog.lido.fi/content/images/2025/12/data-src-image-fa0e2c14-f1dc-4913-bc59-dff610c6be21.png) ### **Financial Position: Q1 - Q3 2025** ![](https://blog.lido.fi/content/images/2025/12/data-src-image-2035e866-7233-4432-9ab7-2f4620581c1d.png) During Q3, the Lido DAO maintained a positive treasury position, with overall Lido Labs, Ecosystem, and Alliance expenses remaining on track with the approved annual target budget: - Base: $31M - Growth and liquidity: 10–15% of [DAO treasury](https://etherscan.io/address/0x3e40D73EB977Dc6a537aF587D48316feE66E9C8c?ref=blog.lido.fi) (\~$17M) For detailed information, refer to the [Lido Protocol Economic Reports](https://dune.com/steakhouse/lido-safu?ref=blog.lido.fi). ## **LDO Buybacks** [A new buyback framework](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894?ref=blog.lido.fi) has been proposed on the Research Forum for community discussion. The framework outlines a mechanism to automate buybacks and pair LDO with wstETH in a liquidity position owned by the Aragon Agent, which should remove LDO from circulation, deepen on-chain liquidity, and generate liquidity fees for the Lido DAO. The parameters proposed to trigger the buyback mechanism: - ETH price above $3,000 - DAO revenue >$40M USD - Distribution: 50% of treasury inflows - Up to 2% price impact - $10M on a rolling 12-month basis If deployed today, and under current conditions (ETH at \~$3,500, annualized DAO revenue \~$45M), this mechanism would meet activation criteria. This framework proposes a flexible and transparent system that operates only under favorable ecosystem, protocol funds and revenue conditions, and is designed to support Lido DAO sustainability while supporting long-term LDO token value accrual. The mechanism and parameters are open for community feedback — [visit the Research Forum](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894?ref=blog.lido.fi) to join the discussion. ## **Strategic Outlook 2026** ### **Upcoming Goal-Setting Proposal** The [Guided Open Objective Setting Exercise (GOOSE) framework](https://research.lido.fi/t/the-guided-open-objective-setting-exercise-goose-proposal-a-genesis-step-to-jump-start-a-dao-wide-goal-setting-exercise-and-cadence/5355/20?ref=blog.lido.fi) sets one- and three-year goals aligned with the DAO’s mission and vision. Anyone can submit a proposal, which is then voted on by tokenholders and executed under DAO mandate.[The next GOOSE-3](https://research.lido.fi/t/lido-labs-goose-3-lido-s-next-chapter/10927?ref=blog.lido.fi) proposes Lido DAO’s organizational and product priorities for 2026\. Coming at the end of November, this proposal focuses on consolidating the Lido protocol’s position within Ethereum’s staking ecosystem while expanding its product scope beyond staking. ### **Leading With Staking** Lido core product — liquid ETH staking — remains foundational. With major milestones such as [Dual Governance](https://blog.lido.fi/dual-governance-101-explainer/) and [Community Staking Module v2](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) implemented in 2025, the Lido protocol continues to advance the community’s mission of making staking simple, secure, and decentralized. While maintaining it remains an evergreen priority, there’s not much left to improve it radically. The next stage of focus lies in broadening the Lido protocol’s reach across staking segments and expanding the ecosystem around liquid staking through adjacent products: - **Lido V3 stVaults:** Modular staking infrastructure allowing custodians, L2s, and Node Operators to build custom products on stETH liquidity. Target (subject to market conditions, operational performance, and other factors): - +1M ETH staked via stVaults by end-2026\* - \~1,000 ETH of additional annual revenue\* directed to the DAO, with final outcomes dependent on network conditions and validator performance. - **Lido Staking in ETPs:** Initiatives involving the use of stETH within ETP products, which may broaden institutional access to decentralized staking participation by providing additional exposure to stETH. - **Lido Core Upgrades (CMv2, SRv3, ValMart):** Turning the protocol stake allocation into a market-responsive system, where stake flows dynamically among Node Operators based on performance, fee curve, decentralization efforts, etc. Target: - \~2,600 ETH in annual revenue\* directed to the DAO, subject to variability based on market and operational conditions. These initiatives are intended to support the protocol’s leading position in liquid staking while extending its reach to institutional and custodial integrations. *\* Please note that the projections above have been updated from the ones presented during the Lido Poolside call to reflect refined estimates and current market conditions.* ### **Expanding Beyond Staking** Today, the Lido protocol has one major product, stETH, supported by the expansion through Lido V3 and stVaults, and the early activity of Lido Earn. In 2026, the protocol is expected to evolve beyond that by developing new products and continuously innovating not just in staking, but across DeFi and real-world integrations, moving from “staking only” to a wider range of use cases. ![](https://blog.lido.fi/content/images/2025/12/data-src-image-d0297464-d1d2-4c28-85b9-46519797019f.png) Lido protocol is evolving from a single-product protocol into a multi-product one, leveraging its stETH liquidity, strong presence, and DeFi integrations to movecloser to users and businesses. Web3 is entering a pivotal phase of crypto adoption — moving from the early adopters to the early majority. Today, countless businesses and individuals use blockchains primarily for stablecoin transfers, often without engaging directly in the underlying technical details. As this trend accelerates, decentralized intermediaries are likely to intersect with a wider range of users, such as businesses, professionals, individuals, and funds. To meet the needs of this expanding user base, the Lido protocol needs to offer more than staking alone. ![](https://blog.lido.fi/content/images/2025/12/data-src-image-28e9ce45-fd52-4e86-b3d2-e9463699c86f.png) ## **Q&A Highlights** **Given recent issues with unbacked vaults on permissionless platforms like Morpho and Euler, how can Lido V3 ensure stETH remains secure when vaults are issuing tokens against ETH collateral?** - stVaults are designed with conservative reserve ratios — stETH is always overcollateralized, with minting capped at less than 1:1 against ETH collateral. - The protocol distinguishes permissioned and permissionless vaults, with stricter limits for the latter. Aggregate minting cap from all permissionless vaults is below a protocol safety threshold, that will start small and scale gradually. - Multiple layers of due diligence are applied to Node Operators, including performance and slashing-risk assessments. - Security comes first: [Lido V3](https://v3.lido.fi/?ref=blog.lido.fi) is undergoing five independent audits conducted by three different auditors, as well as thorough internal reviews and [the Bug Bounty competition](https://immunefi.com/audit-competition/lido-v3-bug-bounty-competition/information/?utm%5Fsource=explore%5Fresults). More on stVaults' design is covered in the [proposal](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x01cd474645cc7c3ddf68314d475d421ef833499297f508fee5f7411fafff3954). **Will Lido contributors expand liquid staking to other chains (e.g., Solana, Hyperliquid)?** - No immediate plans at this time. Past experiments on Solana, Polygon, Kusama, and Polkadot were discontinued due to fragmented markets and strong chain-specific incumbents. - Competing effectively across multiple ecosystems requires chain-specific tokens and incentives, which can dilute current focus. - Ethereum remains the primary market for institutional and DeFi staking, and Lido contributors intend to consolidate its leading position there before re-evaluating other cross-chain options. **If CSM v2 is more profitable and better for decentralization, how will Lido Labs increase its share?** - **CSM v2** staking rewards are [split \~6.5% to the DAO and \~3.5% to Node Operators](https://lido.fi/how-lido-works/protocol-fee?ref=blog.lido.fi), resulting in a higher portion of rewards allocated to the DAO compared to the Curated Module Node Operators. However, CSM’s design targets home and community stakers, limiting its scalability relative to professional staking providers. - The **Curated Module v2** will adopt market-driven stake allocation (planned for mid-2026), allowing parameter-based competition among Node Operators with the goal to match or exceed CSM cost efficiency. - Both staking modules will co-exist to balance decentralization and scalability. **How could ETP/ETFs benefit Lido?** - ETFs and ETPs provide regulated avenues to stake ETH for entities unable to hold digital assets directly. - Using stETH as the underlying asset allows issuers to provide higher returns on top of liquid staking products for their customers. - This could lead to dual exposure — traditional treasuries holding both onchain stETH and ETF-wrapped versions — expanding total market reach. **How will Lido Labs compete with custodial staking providers, such as Coinbase or ETF issuers?** - Custodial staking is the immediate next step for institutions, but it operates with some constraints. In contrast, the Lido core product enables the following: - More of the underlying ETH can be staked; - Redemptions can use onchain liquidity (stETH) instead of relying solely on withdrawal queues. - stETH’s onchain liquidity can allow redemptions through secondary market mechanisms to accrue higher rewards and to enable faster redemption flexibility than natively staked custodial ETFs. - In the long term, DeFi-native composability enables the Lido protocol’s capabilities that ETF structures generally cannot replicate. **What are the highest impact growth items, their expected growth results, and the allocated resources for each?** - Two primary growth vectors: 1. **stVaults / Lido v3**: expanding into the low-risk institutional segment via custodian and L2 integrations. 2. **Lido Earn:** capturing APR Maxis and DeFi-native users through other structured reward-generating products. - In the short term, most resources are allocated to Lido V3 security and launch; over time, more will shift toward product diversification. - The DAO plans to incubate smaller, complementary products that expand Lido role across DeFi. **What new products will bring Lido closer to users?** - Lido Earn will expand to include stablecoin-based strategies. - stVaults will power white-label staking solutions for custodians and institutions. - Work is also underway on integrated DeFi interfaces and APIs for banks and custodians, improving accessibility for non-crypto-native customers. **How will the success of Lido Earn be measured next year?** - DAO revenue contribution (primary metric). - Cost efficiency (maintaining sustainable margins). - Risk-adjusted rewards (prioritizing safe, high-quality strategies). The goal is to increase the funds flowing to the Lido DAO, without incurring excessive costs or risks. ## **Further reading** - [GOOSE-3 proposal](https://research.lido.fi/t/lido-labs-goose-3-lido-s-next-chapter/10927?ref=blog.lido.fi) - [GOOSE-2 (year 2025) progress report](https://research.lido.fi/t/goose-2-eggs-2025-progress-report/10779?ref=blog.lido.fi) - Buyback proposals: [framework](https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894?ref=blog.lido.fi) and [technical rails](https://research.lido.fi/t/nest-network-economic-support-tokenomics/10648?ref=blog.lido.fi) - [Delegate your LDO](https://vote.lido.fi/delegation?ref=blog.lido.fi) to always keep your voting power active For more insights, watch the full session that covers detailed market share analysis, financials, and an extended Q&A session. **▶️** [**Tokenholder Update call – Full Recording**](https://www.youtube.com/live/cZNmLa-Lc7A?ref=blog.lido.fi) *The next Tokenholder Update will be held at the beginning of 2026\. Lido Poolside community calls continue monthly.*[*Subscribe to Luma*](https://luma.com/lido?ref=blog.lido.fi) *for updates on upcoming events.* --- ## **Disclaimer** This material is for informational purposes only and does not constitute investment, legal, tax advice, or any other kind of advice. No representation or warranty, express or implied, is made as to its accuracy, completeness, or timeliness. Nothing herein should be interpreted as a recommendation or relied upon as a guarantee of any specific outcome, and past performance is not indicative of future results. Any opinions or forward-looking statements reflect the current judgment of the presenter as of the date of this presentation and are subject to change without notice. Users should conduct their own independent evaluation before making any decisions based on this material. ### Introducing the Lido stRATEGY Vault URL: https://blog.lido.fi/introducing-the-lido-strategy-vault/ Last updated: 2025-11-06T13:59:04.000Z ## **TLDR** - The [**Lido stRATEGY Vault**](https://stake.lido.fi/earn/strategy?ref=blog.lido.fi) gives you instant access to diversified DeFi opportunities centered around Lido stETH. - Access the **stRATEGY Vault** via the [**Earn**](http://stake.lido.fi/earn?ref=blog.lido.fi) tab on [stake.lido.fi/earn](http://stake.lido.fi/earn?ref=blog.lido.fi). - Built on the **Mellow Core Vault** stack, the stRATEGY Vault offers diversified exposure to leading DeFi strategies including **Aave**, **Ethena**, and **Uniswap**. - Deposit **ETH, WETH, or wstETH** and receive **strETH** representing your shared position in the vault. - Depositors earn **Mellow points** while holding strETH and gain exposure to diversified DeFi curations within Earn. ## **Why stRATEGY?** The **stRATEGY Vault** provides a single, streamlined way to gain diversified exposure to curated DeFi opportunities centered on **stETH**. Instead of managing multiple positions across different protocols, you can deposit once and let the vault handle allocation, monitoring, and rebalancing through **Earn** on stake.lido.fi. stRATEGY is built on the [Mellow Core Vault stack](https://mellowprotocol.notion.site/Mellow-Thesis-Infrastructure-for-the-Next-Trillion-in-Onchain-Assets-23c02ad8627680949c63e0bbd4562646?ref=blog.lido.fi). ## **What’s Inside the Vault?** stRATEGY focuses on liquid, battle‑tested integrations that may evolve over time. Today, the strategy mix concentrates on lending/looping and liquidity provision across protocols including **Aave, Ethena and Uniswap.** Curated protocols are selected to contribute to the broader **stETH** ecosystem. The exact composition can change as market conditions and risk parameters develop. ## **Using stRATEGY via Earn:** 1. Navigate to [stake.lido.fi/earn/strategy](http://stake.lido.fi/earn/strategy?ref=blog.lido.fi). 2. Connect a wallet. 3. Deposit ETH, WETH or wstETH. 1. To deposit stETH in the stRATEGY Vault, convert it to wstETH at [stake.lido.fi/wrap](http://stake.lido.fi/wrap?ref=blog.lido.fi) 4. Receive strETH tokens representing your share of the overall vault. 5. Hold strETH tokens while DeFi rewards accrue behind the scenes according to the vault’s strategy and accrue Mellow points proportional to your strETH holdings and duration. 6. Withdraw strETH tokens to wstETH once you decide to leave the position in Lido stRATEGY. [![](https://blog.lido.fi/content/images/2025/11/Screenshot-2025-11-06-at-14.58.17.png)](https://stake.lido.fi/earn/strategy/?ref=blog.lido.fi) ### **Mellow Points** Addresses holding **strETH** accrue **Mellow points** proportional to stake size and time in the vault—currently **0.00025 points per $1 of value per hour**, accruing hourly. For the first four weeks after vault deployment (November 6th - December 3rd 2025) points will accrue at rate of 0.00075 points per $1 of value per hour. ### **Fees** The vault charges a **1% annual platform (AUM) fee**, prorated over time, and a **10% performance fee** (to Mellow) on rewards. Both are reflected in the **strETH** price rather than deducted from token balances. ## **How stRATEGY Fits in Earn** **stRATEGY** joins existing [**Earn**](https://stake.lido.fi/earn?ref=blog.lido.fi) vaults to broaden access to advanced DeFi and decentralization. **GG Vault (GGV)** emphasizes tried‑and‑tested strategies with premier DeFi protocols for increased rewards on ETH or (w)sETH deposits, while the **Decentralized Validator Vault (DVV)** focuses on staking rewards boosted by **Distributed Validator Technology (DVT)** provider incentives which support Lido protocol’s node operator decentralization. **stRATEGY** gives users a unique DeFi allocation targeting increased rewards, plus additional Mellow points. stRATEGY combines flexible design with plug-and-play access to leading DeFi protocols with no engineering or extra adapters needed. It also offers users a path to diversify their exposure to different vault curators within Earn. Explore all options in [**Earn**](https://stake.lido.fi/earn?ref=blog.lido.fi) to find the approach that suits your goals. ## **Disclaimer** - Rewards are not assured, may fluctuate and are influenced by factors outside the platform’s control, including changes to blockchain protocols, the specific rules and mechanisms established by each underlying blockchain network and validator performance. - Note, that the vaults involve protocol, slashing and other risks. You can find more details in the Lido strETH FAQs. Users should conduct their own research, seek professional advice, and ensure they understand, acknowledge and accept the risks before participating. - The Lido stRATEGY Vault and strETH token rely on third-party infrastructure provided by Mellow, subject to Mellow’s [Terms of Service and Privacy Policy](https://app.mellow.finance/Runtime-Labs-Vault-Legal-Notice.pdf?ref=blog.lido.fi). For more details on accruing and redeeming Mellow points, head to Mellow’s [documentation](https://docs.mellow.finance/points/overview?ref=blog.lido.fi). ### Partnership With Chainlink on Adopting CCIP as Official Cross-Chain Infrastructure For wstETH URL: https://blog.lido.fi/announcing-partnership-with-chainlink-on-adopting-ccip-as-official-cross-chain-infrastructure-for-wsteth/ Last updated: 2025-12-02T10:41:18.000Z Lido, the leading liquid staking protocol, is integrating the Chainlink interoperability standard, with [Chainlink Cross-Chain Interoperability Protocol (CCIP](https://chain.link/cross-chain?ref=blog.lido.fi)) serving as the official cross-chain infrastructure for Wrapped Staked Ether (wstETH). With this integration, all cross-chain transfers of wstETH will be secured by Chainlink CCIP by leveraging the Cross-Chain Token (CCT) standard. In coming months, wstETH will progressively implement the new infrastructure on each of the [16 chains](https://lido.fi/lido-multichain?ref=blog.lido.fi) in stages, with thorough multi-step execution. In addition, early expansions are already happening on Plasma, Monad, Ink and 0G via CCIP. **Check out the full partnership proposal** [**here**](https://research.lido.fi/t/announcing-strategic-partnership-with-chainlink-on-adopting-ccip-as-the-official-default-cross-chain-infrastructure-for-wsteth/10871?ref=blog.lido.fi)**.** This integration marks a significant step forward in enhancing the security and interoperability of wstETH across the multi-chain ecosystem, driving new opportunities for wstETH holders and DeFi protocols. To unlock these new possibilities, wstETH is adopting the CCT standard, which supports self-serve deployments, full sovereign control and ownership of token contracts, enhanced programmability, and zero-slippage transfers, all backed by CCIP’s robust security. The migration from native bridges and other providers is planned over the coming months. Built on Chainlink’s decentralized oracle network platform, CCIP enables secure cross-chain interoperability, leveraging time-tested infrastructure that secures [$100B in DeFi TVL](https://metrics.chain.link/?ref=blog.lido.fi) and has enabled over $26 trillion in onchain transaction value. Key benefits unlocked by adopting CCIP include: - **Maintain Control, Retain Autonomy**: The CCT standard allows the DAO autonomy to be preserved, with bridging endpoints and (w)stETH token contracts transferable back to the DAO via governance at any time. - **Future-proof reach**: CCIP continues to add support for new chains, enabling permissionless onboarding of tokens while preserving token-issuer ownership and security properties across 65+ blockchains. - **Always-on infrastructure**: CCIP is built on the same time-tested infrastructure as other Chainlink oracle services that underpin prominent protocols across DeFi, ensuring the highest level of security and reliability in every cross-chain transaction. - **Robust security**: CCIP employs multiple layers of security, including independent monitoring of cross-chain activity, whose aim is to help protect token transfer flows even during volatile market conditions and network congestion. - **Modular configurability:** CCIP enables the Lido DAO to configure custom safeguards into cross-chain wstETH transfers, such as an emergency pause function to disable bridging functionality if any anomaly is detected, as well as require additional confirmations from external verifiers for high cumulative transfer values. - **Zero-slippage transfers**: CCT’s burn/mint architecture removes reliance on volatile third-party liquidity pools for routing wstETH between chains. - **Cross-chain governance:** CCIP’s support for arbitrary message passing between chains unlocks advanced governance structures across chains, including governance forwarding. ### Growing The Cross-Chain Role of wstETH This integration builds on Lido’s existing use of the Chainlink platform, including [secure Data Feeds](https://blog.lido.fi/lido-adopts-steth-usd-chainlink-price-feed/) that facilitate the adoption of stETH/wstETH across DeFi (e.g., Aave) and [CCIP-powered Direct Staking rails](https://blog.lido.fi/lido-staking-goes-cross-chain-via-chainlink-ccip/) that enables users to stake ETH directly from other networks and receive wstETH. *“For stakers, the ability to move assets quickly across the ecosystem is essential for seizing opportunities, rebalancing liquidity, and managing their staked ETH efficiently. By adopting Chainlink CCIP as the official cross-chain standard for wstETH, we’re giving users and builders a standardized, secure way to move wstETH across chains. The Cross-Chain Token standard keeps ownership with the Lido community while adding the programmatic safeguards needed as wstETH scales to more networks.” -* [*Jakov Buratovic*](https://www.linkedin.com/in/jakov-buratovic?ref=blog.lido.fi)*, Master of DeFi at Lido.* *“We’re excited to see Lido adopt Chainlink CCIP as the official cross-chain standard for wstETH across the multi-chain ecosystem. This integration is set to significantly expand access to wstETH across DeFi, with cross-chain flows secured by Chainlink’s defense-in-depth architecture. We’re proud to support Lido in scaling wstETH safely and at institutional scale.” -* [*Johann Eid*](https://www.linkedin.com/in/johanneid/?ref=blog.lido.fi)*, Chief Business Officer at Chainlink Labs.* Following the [recent approval by Lido DAO](https://research.lido.fi/t/empowering-lido-ecosystem-foundation-to-lead-bridge-related-partnerships/10794?ref=blog.lido.fi) snapshot voting, the Lido Ecosystem Foundation is leading all bridge-related strategic partnerships and negotiations involving stETH and wstETH to unlock new opportunities that strengthen the Lido protocol’s competitiveness and resilience in a rapidly evolving market landscape. --- ### **About Lido** Lido is the name of a family of open-source peer-to-system software tools deployed and functioning on the Ethereum blockchain network. With a mission to democratize staking, the protocol enables users to mint transferable utility tokens, which receive rewards linked to the related validation activities of writing data to the blockchain, while the tokens can be used in other on-chain activities. Learn more: [lido.fi](https://lido.fi/?ref=blog.lido.fi) ### **About Chainlink** Chainlink is the industry-standard oracle platform bringing the capital markets onchain and powering the majority of decentralized finance (DeFi). The Chainlink stack provides the essential data, interoperability, compliance, and privacy standards needed to power advanced blockchain use cases for institutional tokenized assets, lending, payments, stablecoins, and more. Since inventing decentralized oracle networks, Chainlink has enabled tens of trillions in transaction value and now secures the vast majority of DeFi. Learn more: [chain.link](https://chain.link/?ref=blog.lido.fi) ### Lido V3 & P2P.org: Expanding Ethereum Staking Flexibility with Lido stVaults URL: https://blog.lido.fi/v3-p2p-expanding-ethereum-staking-flexibility-with-lido-stvaults/ Last updated: 2026-02-09T13:42:02.000Z ### **Product Overview** [P2P.org](https://www.p2p.org/?ref=blog.lido.fi) is preparing to launch a suite of stVault powered staking and DeFi products designed to make Ethereum staking more flexible, yield optimized, and institution ready. The product lineup will include two complementary strategies. The first, Dedicated stVaults, is a conservative offering aimed at institutional clients, DAOs, and family offices seeking direct staking exposure with predictable returns and clear validator attribution. The second, DeFi Vaults, introduces higher yield strategies through collaborations with experienced curators such as Mellow, combining staking rewards with onchain lending and other DeFi integrations. Together, these offerings create a unified framework that spans the entire risk spectrum, from conservative staking to advanced yield generation, built entirely on Lido’s stVault architecture. In the current liquid staking landscape, institutions and advanced users face two main limitations: restricted control over validator selection and limited opportunities for differentiated yield generation. By adopting stVaults, P2P.org can directly address both. The new setup enables clients to stake through dedicated vaults linked to P2P.org's own validator operations, and unlocking composable DeFi strategies around stETH. This approach creates a unified experience that connects institutional staking and DeFi yield within a single, transparent system. ### **Initial Approach & Limitations** Under the prior Lido architecture, P2P.org faced constraints that prevented client specific validator routing and made it difficult to create segregated staking environments. Institutional demand for auditable, isolated vaults could not be met within pooled staking models, which lacked the infrastructure for dedicated validator mapping and individual client reporting. As institutional participation in Ethereum staking continued to expand, P2P.org required a solution that combined control, transparency, and the flexibility to integrate customized risk and yield strategies. ### **Why V3 & stVaults** The introduction of Lido V3 stVaults provides P2P.org with a modular framework that meets these requirements. Built natively around stETH, the most liquid LST, stVaults serve as an ideal foundation for both institutional staking products and composable DeFi integrations. Through stVaults, P2P.org can offer dedicated vaults per client, ensuring clear separation of assets, transparent validator performance, and easier accounting for institutional reporting. This architecture also enables customized SLAs and tailored performance metrics for clients requiring higher levels of operational precision. ### **Integration & Security Approach** P2P.org is integrating stVaults across its upcoming product suite through two primary pathways: - First, dedicated private stVaults will be deployed for institutional clients. These vaults offer isolated exposure, validator level transparency, and the security assurances of Lido’s audited infrastructure. - Second, DeFi Vaults will embed Lido stVaults into multi strategy products in collaboration with Mellow and other DeFi curators. These strategies combine the transparency and reliability of institutional staking with the yield potential of DeFi protocols. This two-tiered integration model allows P2P.org to balance institutional security standards with DeFi composability, building a bridge between traditional staking and onchain yield optimization. ### **Expected Outcomes** By adopting Lido V3 stVaults, P2P.org gains the ability to design staking and yield products that are customizable, scalable, and fully transparent. Institutions will benefit from dedicated vaults offering clear performance attribution and auditable segregation, while DeFi users will access a new generation of yield optimized, stETH based strategies. This architecture transforms staking into a programmable layer, allowing P2P.org to move seamlessly between conservative staking and complex yield structures, all within a unified framework. Beyond the technical advantages, the initiative positions P2P.org as one of the first Lido Node Operators to extend Lido V3 into a full scale DeFi product suite, advancing both the accessibility and sophistication of onchain staking. --- ### **Resources** - [Lido V3 Testnet](https://v3.lido.fi/?ref=blog.lido.fi) - [Lido V3 Whitepaper (RFC)](https://research.lido.fi/t/lido-v3-whitepaper-rfc/10124?ref=blog.lido.fi) - [V3 User & Integration Guides](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [Technical Design Documentation](https://docs.lido.fi/deployed-contracts/hoodi-lidov3/?ref=blog.lido.fi) ### Direct Staking on Linea, Powered by Chainlink CCIP URL: https://blog.lido.fi/direct-staking-on-linea-powered-by-chainlink/ Last updated: 2025-10-22T13:04:36.000Z *Users can now stake their ETH directly on* [*Linea*](https://linea.build/?ref=blog.lido.fi)*, powered by* [*Chainlink*](https://chain.link/?ref=blog.lido.fi) *CCIP’s Programmable Token Transfers.* [The Lido Direct Staking](https://blog.lido.fi/lido-staking-goes-cross-chain-via-chainlink-ccip/) functionality is now live on [Linea](https://linea.build/?ref=blog.lido.fi), marking the next step in making ETH staking more accessible, seamless, and scalable across the multi-chain ecosystem. Built using the Chainlink interoperability standard, [Chainlink’s Cross-Chain Interoperability Protocol](https://chain.link/cross-chain?ref=blog.lido.fi) (CCIP), Direct Staking on Linea allows users to stake ETH directly from the Linea network and receive wrapped staked ETH (wstETH) without needing to manually bridge assets to and from Ethereum mainnet. This integration streamlines the user experience while expanding the availability of wstETH within the Linea DeFi ecosystem. With reduced gas costs and faster transactions, users on Linea can now stake in a single step and benefit from Lido’s liquid staking protocol, all powered by Chainlink CCIP’s Programmable Token Transfers. For now, users can stake their ETH directly on Linea using [XSwap](https://xswap.link/?ref=blog.lido.fi), [OpenOcean](https://openocean.finance/?ref=blog.lido.fi) and [Interport](https://interport.fi/?ref=blog.lido.fi). ## **What This Unlocks: Seamless ETH Staking from Linea** The Lido protocol resides on Ethereum mainnet, where users stake ETH to receive wstETH, a liquid staking token that can be freely used across DeFi. However, for users holding ETH on Layer 2 networks like Linea, accessing wstETH has traditionally involved multi-step processes: bridging ETH to mainnet, staking via Lido, and then bridging the resulting wstETH back to the L2. With the launch of Direct Staking on Linea, all of this is compressed into a single transaction: no manual bridging, no multi-day waits, and no need to use centralized exchanges. This significantly lowers the barrier to entry for staking and makes wstETH more natively integrated into Linea’s low-cost environment. ## **How It Works: Chainlink CCIP and Programmable Token Transfers** Direct Staking relies on Chainlink’s CCIP, which uniquely enables tokens - and execution logic in the form of message instructions - to be sent across chains as a single atomic transaction. Two key approaches to staking are now supported on Linea: - **Liquidity Pool-Based Staking:** Users stake ETH on Linea and immediately receive wstETH from a liquidity pool, using an exchange rate verified by Chainlink Data Feeds. In parallel, the ETH is sent cross-chain to Ethereum mainnet, staked via Lido, and wstETH is bridged back to Linea to replenish the pool. - **On-Demand Staking:** Users stake ETH on Linea. That ETH, along with cross-chain instructions, is transmitted via Chainlink CCIP to Ethereum mainnet. A smart contract on Ethereum stakes the ETH via Lido, mints wstETH, and sends it back to the user’s Linea wallet. Both methods maintain compatibility with the existing Lido protocol and do not require changes to the core staking contracts or token logic. This makes the architecture secure, modular, and extensible to additional networks in the future. ## **Why Chainlink CCIP** CCIP is the only cross-chain messaging solution with [level-5 cross-chain security](https://blog.chain.link/five-levels-cross-chain-security/?ref=blog.lido.fi), featuring additional layers of protection through the [Risk Management Network](https://blog.chain.link/ccip-risk-management-network/?ref=blog.lido.fi). CCIP’s [Programmable Token Transfers](https://blog.chain.link/ccip-programmable-token-transfers/?ref=blog.lido.fi) make it possible to transmit both ETH and execution instructions in one unified cross-chain message - a prerequisite for delivering frictionless, single-step staking across Layer 2 networks like Linea. In addition to CCIP, Chainlink’s platform also supports Lido Direct Staking through: - **Chainlink Data Feeds**, which provide reliable and tamper-resistant wstETH exchange rates across chains. This ensures that users receive fair value when staking through liquidity pools, with protection against price manipulation or stale data. - **Chainlink Automation**, which manages the batching and scheduling of staking operations and liquidity balancing. Automation ensures these processes run efficiently and without manual intervention, helping to reduce gas costs, maintain adequate pool liquidity, and improve the overall responsiveness of Direct Staking. ## **Expanding the wstETH Footprint on Linea** With Linea’s developer-friendly zkEVM infrastructure and strong DeFi adoption, the launch of Direct Staking expands the reach of wstETH into a thriving L2 ecosystem. Users and protocols on Linea now have native access to Lido’s liquid staking capabilities, without ever leaving the network. Multiple dApps and DeFi frontends on Linea are integrating Direct Staking rails, making it easier than ever for users to access yield-bearing wstETH in a gas-efficient environment. ## **Learn More** - [Lido on Linea](https://blog.lido.fi/wsteth-goes-to-linea/) → - [Explore Chainlink CCIP](https://docs.chain.link/ccip?ref=blog.lido.fi) → For integration support or to build with Lido, reach out to contributors via the [Lido Discord](https://discord.com/invite/lido?ref=blog.lido.fi). ### Lido V3 & Everstake: Institutional Market-Neutral Yield Strategies with stVaults URL: https://blog.lido.fi/lido-v3-everstake-institutional-market-neutral-yield-strategies-with-stvaults/ Last updated: 2026-02-09T13:41:46.000Z ### **Product Overview** [Everstake](https://everstake.one/?ref=blog.lido.fi) is building a product using stVaults that enables institutional investors to get more yield on staked ETH without increasing market exposure through borrowed funds and simultaneously hedges price sensitivity with perpetual futures and funding arbitrage income. ### **Initial Approach & Limitations** Traditional staking setups did not offer the customizability and separation of responsibilities needed to build a product suitable for institutional users. Without clear boundaries between operational control (node operators) and risk management (strategy curators), it was difficult to enforce policy rules, implement oversight mechanisms, or adapt strategies dynamically in response to market conditions. Everstake needed infrastructure that could separate staking operations from risk policy enforcement, and allow for transparent, real-time management of complex position structures. ### **Why stVaults?** - **Separation of roles**: Node operators manage staking, while risk curators independently define and enforce risk parameters like LTV thresholds, liquidation conditions, and exposure limits. - **Customizable risk policy enforcement**: The system allows full control over strategy logic, enabling real-time monitoring and adjustments to meet institutional-grade standards. ### **Integration and Security Approach** The product is implemented through smart contracts that execute strategy with minimal manual intervention. This ensures consistency, reliability, and efficiency in trade execution while reducing operational risks. Each stVault strategy is monitored and adjusted through a dedicated risk management platform managed by the Risk Curator. This system actively tracks funding rates, position sizes, and LTVs, and performs automated rebalancing in alignment with a defined risk policy. The strategy aims to extract market-neutral yield from staking rewards + funding arbitrage, while avoiding negative carry and liquidation risks. ### **Expected Outcomes** With stVaults, Everstake can now offer: - Staking product with higher rewards and reduced risk. - Institutional-grade control and compliance through smart contract automation and role separation. - A foundation for scalable, transparent, and customisable staking products targeted at risk-conscious investors. --- ### **Resources** - [Lido V3 Testnet](https://v3.lido.fi/?ref=blog.lido.fi) - [Lido V3 Whitepaper (RFC)](https://research.lido.fi/t/lido-v3-whitepaper-rfc/10124?ref=blog.lido.fi) - [V3 User & Integration Guides](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [Technical Design Documentation](https://docs.lido.fi/deployed-contracts/hoodi-lidov3/?ref=blog.lido.fi) ### VanEck Files for Lido Staked ETH ETF URL: https://blog.lido.fi/vaneck-files-for-lido-staked-eth-etf/ Last updated: 2025-10-20T14:58:46.000Z [VanEck has filed an S-1 registration statement](https://www.sec.gov/Archives/edgar/data/2091159/000162828025045249/vanecklidostakedethereumet.htm?ref=blog.lido.fi) with the U.S. Securities and Exchange Commission (SEC) for the ‘VanEck Lido Staked ETH ETF’, a proposed fund designed to provide investors with exposure to stETH, ETH staked via the [Lido](https://lido.fi/?ref=blog.lido.fi) protocol. *“The filing signals growing recognition that liquid staking is an essential part of Ethereum’s infrastructure. Lido protocol’s stETH has shown that decentralization and institutional standards can coexist, providing a foundation the broader market can build on,” said* [*Kean Gilbert*](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi)*, Head of Institutional Relations at Lido Ecosystem Foundation.* The ETF would hold stETH, benefiting from its extensively audited smart contracts, deep secondary-market liquidity, and integrations with leading custodians and exchanges. Since launch, staking users have earned more than $2 billion in staking rewards through the Lido protocol, which today has a total value locked of [nearly $40 billion.](https://dune.com/lido/lido-morning-coffee-dashboard?ref=blog.lido.fi) If approved, the ETF would give institutional investors a compliant, tax-efficient way to gain Ethereum staking exposure within a regulated investment structure. ## **ETF Overview** The ETF closely mirrors Ethereum’s staking economics while maintaining daily liquidity and transparent onchain backing. For ETF issuers, liquid staking eliminates the need to hold idle ETH for redemptions. Because stETH can be redeemed or traded without Ethereum withdrawal delays, issuers can manage creations and redemptions more efficiently while maintaining continuous exposure to Ethereum’s staking economy. The VanEck filing represents the first U.S. ETF proposal referencing stETH, bringing this form of onchain exposure closer to mainstream portfolios. ## **Regulatory & Policy Context** Recently, the [SEC’s Division of Corporation Finance clarified](https://www.sec.gov/newsroom/speeches-statements/corpfin-certain-liquid-staking-activities-080525?ref=blog.lido.fi) that standard liquid staking activities — including issuance, redemption, and secondary trading of staking receipt tokens — do not constitute securities transactions when conducted within administrative and ministerial parameters. This guidance has also provided a clearer foundation for regulated products referencing liquid staking tokens like stETH by confirming that staking receipt tokens, though evidencing ownership of deposited assets, are not securities because the underlying assets themselves are not securities. Alongside this, contributors to the Lido Labs Foundation have been active in industry and policy discussions around liquid staking. Through participation in trade associations such as the [Crypto Council for Innovation](https://cryptoforinnovation.org/?ref=blog.lido.fi) (CCI), [CCI’s Proof of Stake Alliance](https://www.proofofstakealliance.org/?ref=blog.lido.fi), and the [Blockchain Association](https://theblockchainassociation.org/?ref=blog.lido.fi), the Lido Labs Foundation has worked to educate both policymakers and industry participants on the technology and its implications. This includes research and engagement supporting recent regulatory clarity around liquid staking frameworks. *“Filings that reference liquid staking are a sign of growing regulatory understanding. Through our work across the Crypto Council for Innovation (CCI), CCI’s Proof of Stake Alliance, Blockchain Association and other industry groups, we’ve aimed to help shape that conversation constructively and ensure decentralized protocols like Lido’s can support compliant, transparent access to Ethereum staking,” said* [*Sam Kim*](https://www.linkedin.com/in/samkim92620/?ref=blog.lido.fi)*, Chief Legal Officer, Lido Labs Foundation* ## **Implications for Institutional Access** The filing highlights the growing alignment between decentralized infrastructure and traditional financial products. For ETF issuers and custodians, this filing demonstrates how liquid staking, and in particular stETH, can fit within existing regulated structures. This development underscores the steady integration of onchain technologies into mainstream investment frameworks, with stETH providing one of the most established examples of that bridge. --- ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For more information, please visit lido.fi/institutional. - **Follow Lido on X**: [x.com/LidoFinance](https://x.com/LidoFinance?ref=blog.lido.fi) - **Follow Lido on LinkedIn:** [linkedin.com/company/lidofi](https://www.linkedin.com/company/lidofi/?ref=blog.lido.fi) ### **About VanEck** VanEck has a history of looking beyond the financial markets to identify trends that are likely to create impactful investment opportunities. VanEck were one of the first U.S. asset managers to offer investors access to international markets. This set the tone for the firm's drive to identify asset classes and trends – including gold investing in 1968, emerging markets in 1993, and exchange traded funds in 2006 – that subsequently shaped the investment management industry. Today, VanEck offers active and passive strategies with compelling exposures supported by well-designed investment processes. As of April 30, 2025, VanEck managed approximately $116.6 billion in assets, including mutual funds, ETFs and institutional accounts. The firm's capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. Their actively managed strategies are fueled by in-depth, bottom-up research and security selection from portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity, and transparency are key to the experienced decision-making around market and index selection underlying VanEck's passive strategies. Since their founding in 1955, putting our clients' interests first, in all market environments, has been at the heart of the firm's mission. For more information, please visit [www.vaneck.com](https://www.vaneck.com/?ref=blog.lido.fi). ### Lido V3 & Chorus One: Expanding Institutional ETH Staking with stVaults URL: https://blog.lido.fi/lido-v3-chorus-one-expanding-institutional-staking/ Last updated: 2026-02-09T13:41:33.000Z ### **Product Overview** Ethereum staking continues to mature, and institutions with significant ETH holdings are increasingly looking for secure and yield-competitive strategies. [Chorus One](https://chorus.one/?ref=blog.lido.fi) are building solutions that combine simplicity, flexibility, and performance – allowing their clients to participate in Ethereum’s DeFi ecosystem without added complexity. Chorus One’s latest staking product leverages **Lido stVaults** to deliver two complementary strategies: - **Vanilla staking**: a straightforward ETH staking experience tailored for institutions seeking reliable yield. - **Looped staking**: a strategy that compounds rewards by re-deploying staked ETH into lending and borrowing protocols, thereby maximizing yield potential while maintaining access to liquidity. This dual approach positions Chorus One to better meet the diverse needs of institutional clients – whether they value simplicity, capital efficiency, or higher yield. ### **Why stVaults and stETH?** Several factors make stVaults and stETH a natural fit for Chorus One’s institutional staking product: - **Strategic alignment with Lido**: As an early Lido Node Operator and DAO contributor, Chorus One has deep familiarity with the protocol and its governance. - **Risk-aware infrastructure**: stVaults are designed with robust safeguards, making them well-suited for institutions with high security requirements. - **Liquidity advantage of stETH**: stETH is one of the most liquid staking tokens in the market. Its use of ETH-based liquidation oracles on lending platforms reduces the risk of premature liquidations during market volatility, making it particularly effective for looped staking. - **Full autonomy over vaults**: Chorus One can now design, deploy, and manage vaults end-to-end, ensuring tighter control over product design, client relationships, and revenue flow. ### **Integration and Security Approach** Security remains foundational to the approach. Chorus One is actively testing vanilla and looped staking strategies on testnets to validate reliability, scalability, and client safety. If custom smart contract development is required, they will follow strict transparency standards by publishing **fully public audits**. Institutions can also review our broader security framework in[ Chorus One Handbook](https://handbook.chorus.one/introduction.html?ref=blog.lido.fi) and[ Security documentation](https://security.chorus.one/?ref=blog.lido.fi). ### **Expected Outcomes** By integrating stVaults into staking product suite, Chorus One is unlocking several benefits for institutions: - **Optimized rewards**: competitive yield strategies that balance security, liquidity, and capital efficiency. - **Operational flexibility**: faster product iterations and the ability to adapt strategies as markets evolve. - **Direct client alignment**: institutions can now work exclusively with Chorus One, reducing reliance on multiple operators. - **Scalability**: a foundation for both vanilla and advanced strategies, with optional curator partnerships for more complex vault designs. The launch of stVault-based staking products marks a significant step forward in Chorus One’s institutional offering. By combining the liquidity of stETH with the flexibility of stVaults, they are empowering institutions to access yield opportunities that are both secure and scalable, without unnecessary dependencies. At Chorus One, they believe the future of ETH staking lies in **making institutional participation seamless, capital-efficient, and reward-optimized**, and stVaults are a key part of that vision. --- ### **Resources** - [Lido V3 Testnet](https://v3.lido.fi/?ref=blog.lido.fi) - [Lido V3 Whitepaper (RFC)](https://research.lido.fi/t/lido-v3-whitepaper-rfc/10124?ref=blog.lido.fi) - [V3 User & Integration Guides](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [Technical Design Documentation](https://docs.lido.fi/deployed-contracts/hoodi-lidov3/?ref=blog.lido.fi) ### Crypto.com Expands Access to stETH with Institutional Custody URL: https://blog.lido.fi/crypto-com-expands-access-to-steth-with-institutional-custody/ Last updated: 2025-10-10T13:11:17.000Z [Crypto.com Custody](https://crypto.com/en/custody?ref=blog.lido.fi) has added support for staked ETH (stETH), Ethereum’s largest liquid staking token issued via [Lido protocol](https://lido.fi/?ref=blog.lido.fi). With this integration, institutions can now hold stETH within Crypto.com’s institutional custody framework, combining best-in-class infrastructure and security. The addition of stETH extends Crypto.com Custody’s coverage to one of the most widely used assets in the Ethereum ecosystem. It allows stakers to securely store stETH alongside other digital assets within the same trusted environment, improving operational efficiency and simplifying portfolio oversight for institutional stakers. ## **Access & Adoption** stETH has grown into the leading token in liquid staking, [representing nearly a quarter of all staked ETH](https://dune.com/lido/lido-morning-coffee-dashboard?ref=blog.lido.fi). For institutions, Lido's stETH provides exposure to staking rewards without sacrificing liquidity. By bringing stETH into its custody platform, Crypto.com is providing treasuries, funds, and trading desks with a way to securely hold and manage their stETH holdings, protect them with institutional-grade security, and incorporate the token into broader portfolio strategies. ## **Custody Built for Institutions** Crypto.com Custody provides institutions with infrastructure designed for scale, operational integrity, and security: - MPC security that removes single points of failure. - Segregated, bankruptcy-remote wallets for client assets. - Regulated entities in key jurisdictions to serve institutions. - Comprehensive institutional controls supporting transparency, compliance, and auditability. *“We are aggressively focused on continuing to build our* [*Crypto.com*](http://crypto.com/?ref=blog.lido.fi) *Custody offering to ensure it meets the needs of all institutions and foundations,”* said [Kwon Park](https://www.linkedin.com/in/kwonyoungleepark?ref=blog.lido.fi), Global Head of Digital Asset Partnerships & MD at Crypto.com. *“We are pleased to support stETH for custody to further enhance our platform offering and become the leading digital asset custody provider in the world.”* ## **Institutional Integration & Maturity** stETH’s inclusion within Crypto.com Custody reflects the growing maturity of institutional liquid staking. Custodians are increasingly incorporating stETH into their trusted infrastructure, enabling institutions to access Ethereum staking rewards through the Lido protocol while benefiting from the liquidity and broad integrations that make stETH widely used across the ecosystem. [Kean Gilbert](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi), Head of Institutional Relations at the Lido Ecosystem Foundation, adds: *“Crypto.com’s integration reflects the maturity of the institutional market for liquid staking. By supporting stETH issued through the Lido protocol, institutions can access staking rewards alongside the market-leading liquidity and broad integrations that make stETH a compelling portfolio holding.”* ## **Strengthening the Institutional Standard** For institutions, this integration brings together three key elements: security, accessibility, and global reach. With Crypto.com Custody, stETH is safeguarded by advanced infrastructure and supported through regulated entities across major financial hubs. The integration reinforces stETH’s role as a liquid, widely supported asset within institutional portfolios, reflecting the continued growth of Ethereum’s staking ecosystem. --- ### **About Crypto.com** Founded in 2016, Crypto.com is trusted by millions of users worldwide and is the industry leader in regulatory compliance, security and privacy. Our vision is simple: Cryptocurrency in Every Wallet™. Crypto.com is committed to accelerating the adoption of cryptocurrency through innovation. Learn more at [crypto.com](https://crypto.com/?ref=blog.lido.fi). ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, visit [lido.fi/institutional](https://www.lido.fi/institutional?ref=blog.lido.fi). - [**Follow Lido on X**](https://x.com/LidoFinance?ref=blog.lido.fi) - [**Follow Lido on LinkedIn**](https://www.linkedin.com/company/lidofi?ref=blog.lido.fi) ### Lido V3 & Solstice: Delivering Yield Strategies for Institutions & Retail URL: https://blog.lido.fi/lido-v3-solstice-delivering-yield-strategies-for-institutions-retail/ Last updated: 2026-02-09T13:41:13.000Z ### **Product Overview** [Solstice](https://solsticelabs.io/?ref=blog.lido.fi) is a collection of yield-bearing products based on the USX stablecoin. With over $1B staked through Solstice Staking across Ethereum and Solana, the team is launching YieldVault,a delta-neutral hedge fund strategy leveraging Lido stVaults that has been live and proven in the market for over three years. With stVaults, Solstice simplifies onboarding for institutions seeking access to staking rewards that may exceed those of traditional markets, delivered in a streamlined way. Likewise, Solstice stVaults give retail users access to the same conservative, yield-generating strategies that are typically reserved for accredited and larger investors. ### **Problems & Opportunities** For Solstice, one of the key challenges in institutional onboarding is ensuring strict asset segregation and transparency—a non-starter for compliance-sensitive clients managing large amounts of capital. Solstice needed a way to offer institutional-grade staking with dedicated infrastructure, isolated vaults, and tailored validator support to meet these operational and regulatory standards. ### **Why stVaults and stETH?** - **Dedicated vaults per client:** stVaults allow Solstice to isolate each institutional user’s staking activity, enabling clear asset separation and meeting strict compliance requirements. - **Deep stETH liquidity:** stVaults are built around stETH — the most liquid LST in Ethereum DeFi — ensuring smooth execution and capital efficiency. - **No Commingling:** Client funds are not commingled and remain fully traceable at all times. ### **Integration and Tech Setup** Solstice integrates stVaults via a customer portal, allowing institutional users to request and manage dedicated stVaults. This setup ensures that each customer interacts with an isolated vault, enabling clean separation of assets and operations. As part of its commitment to institutional-grade operations, Solstice is running an on-premise operation in Switzerland with the highest standards in such a banking driven jurisdiction. ### **Expected Outcomes** By integrating stVaults, Solstice enables the deployment of isolated, high-yield staking setups that offer institutional-grade strategies, bridging the gap between DeFi innovation and traditional capital markets. Solstice is further expanding this bridge by actively working with Swiss banks. --- ### **Resources** - [Lido V3 Testnet](https://v3.lido.fi/?ref=blog.lido.fi) - [Lido V3 Whitepaper (RFC)](https://research.lido.fi/t/lido-v3-whitepaper-rfc/10124?ref=blog.lido.fi) - [V3 User & Integration Guides](https://docs.lido.fi/run-on-lido/stvaults/?ref=blog.lido.fi) - [Technical Design Documentation](https://docs.lido.fi/deployed-contracts/hoodi-lidov3/?ref=blog.lido.fi) ### Participating in Dual Governance: A Guide for stETH Holders URL: https://blog.lido.fi/participating-in-dual-governance-a-guide-for-steth-holders/ Last updated: 2025-10-03T11:33:21.000Z [Dual Governance](https://blog.lido.fi/dual-governance-101-explainer/) empowers stETH and wstETH holders to safeguard their assets in the event of contentious or harmful governance decisions within the Lido protocol. If necessary, it enables holders to delay or block proposed changes until they have safely exited the protocol. This guide outlines how Dual Governance works, possible scenarios where it may be activated, and step-by-step instructions for stETH holders. ## What is Dual Governance? Dual Governance introduces a mechanism that gives stakers a direct role in protocol governance through the **dynamic timelock** system. This mechanism ensures that holders can exit the protocol before potentially harmful proposals are enacted. The mechanism relies on an **immutable escrow contract**, which accepts stETH, wstETH, and unstETH withdrawal NFTs. Two thresholds apply to the escrow: - **1% threshold**: Once 1% of the total stETH supply is deposited, **Veto Signalling** is triggered. This delays governance proposals for 5 to 45 days, depending on the level of opposition. - **10% threshold**: Once 10% of the total stETH supply is deposited, **Rage Quit** is triggered. This blocks all governance motions until all escrowed stETH, wstETH, and unstETH tokens are fully withdrawn. While LDO holders maintain voting power, Dual Governance ensures stETH holders can signal opposition, delay execution, and exit the protocol before changes impact their assets. For more details on the underlying design, see: - [\[LIP-28: Dual Governance proposal\]](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-28.md?ref=blog.lido.fi) - [\[Dual Governance 101\]](https://blog.lido.fi/dual-governance-101-explainer/) ## Withdrawals and Their Role in Dual Governance Although the withdrawal process itself has not changed, it is central to Dual Governance: 1. **Request withdrawal:** Lock your stETH/wstETH at [stake.lido.fi/withdrawals/request](https://stake.lido.fi/withdrawals/request?ref=blog.lido.fi). Each withdrawal request mints a unique NFT (unstETH). Your stETH is burned, and ETH is sourced to fulfill the request. 2. **Claim:** Once the withdrawal is finalized, the unstETH NFT updates to “finalized,” allowing you to claim ETH. **Why it matters**: Withdrawal NFTs can be deposited into the Veto Signalling escrow alongside stETH/wstETH. This lets you signal opposition while keeping your place in the withdrawal queue—a key option in both moderate and severe threat scenarios. For a walkthrough, see: - [Video guide](https://youtu.be/Qflsb1qTCLQ?ref=blog.lido.fi) ## Two Categories of Scenarios Dual Governance responses fall into two broad categories: 1. **Moderately bad proposals:** Well-intentioned but flawed proposals, mistakes, or governance gaps. 2. **Severe threats:** Deliberate attempts to exploit governance or impose hostile protocol changes. Each scenario has specific strategies available to stETH holders. ### Scenario 1: Moderately Bad Proposals These are usually unintended mistakes, compromises, or unclear proposals. While problematic, they do not represent immediate existential threats. **Examples include:** - Security oversights or misaligned parameters. - Governance decisions that unintentionally harm stETH holders. - Technical changes that reduce validator decentralization. - Honest errors in fees or reward mechanics. - Poor communication of proposal rationale or impact. ### **Step by Step Response** After LDO holders approve a proposal, it enters the Dual Governance review process. You can find all active proposals at [dg.lido.fi](https://dg.lido.fi/?ref=blog.lido.fi). Click each proposal to review details and verify the items under consideration. ![](https://blog.lido.fi/content/images/2025/10/data-src-image-e3e1c194-f98e-43de-ae6f-8f4b6e85ee00.png) ### **1\. Place tokens in the Veto Signalling Escrow** Veto Signalling does not fully block execution, but it activates a dynamic timelock: the more exit signals from stETH holders, the longer governance motions are delayed. If you believe a submitted or active proposal is problematic: - Connect your wallet. - Click the **Support Veto** button. - Select the token type (stETH, wstETH, or unstETH) and the amount to deposit into the Veto Signalling contract. For detailed instructions, see the [Dual Governance UI guide](https://docs.lido.fi/guides/dg-guide/?ref=blog.lido.fi). ![](https://blog.lido.fi/content/images/2025/10/data-src-image-fde28f00-606e-4e7e-a2f1-12930c113a00.png) **Note:** stETH/wstETH deposited in escrow remains staked. You can choose any amount to support Veto Signalling. ### **If the 1% threshold is NOT reached** The Veto is not supported by enough stETH holders (<1% of total supply). In this case, the governance process is unaffected, and the proposal will be enacted once the pending time ends (3 days + 1 day technical buffer). During and after this time, stETH holders may either exit the protocol via the withdrawal queue or revoke tokens from the Veto Signalling escrow. Proposals can still be executed even while opponents are in the process of exiting. *Indicator:* A yellow “Normal” state background means 30% of the amount required for the next threshold has been gathered (a sign of significant opposition). ![](https://blog.lido.fi/content/images/2025/10/data-src-image-e8a4c8da-1d25-45c4-a312-131cfa7d9701.png) ### **If the 1% threshold IS reached** More than 1% of stETH is deposited, triggering **Veto Signalling**. Execution is paused, giving stakers and LDO holders time to coordinate. From here, two outcomes are possible: - **DAO cancels or revises the proposal** The DAO may cancel the proposal, gather feedback, and revise it. stETH holders can then revoke their tokens. After the dynamic timelock expires, the system enters a **Deactivation sub-state**, followed by the **Veto Cooldown state**: - Transitional phase (5 hours) where uncancelled proposals may still be executed. - After cooldown, the system returns to **Normal**. ![](https://blog.lido.fi/content/images/2025/10/data-src-image-813eed28-c5a6-4f24-9c26-cbf1cd53b2f9.png) - **DAO proceeds with the proposal** Once the Veto Signalling dynamic timelock has elapsed, if the DAO continues despite opposition, the system enters the **Deactivation sub-state** (up to 3 days). - This informs stakers that Veto Signalling is about to end, giving them time to either stay or exit. - stETH holders who remain should revoke their tokens from escrow. - Those exiting should revoke from escrow, then request withdrawals at [stake.lido.fi/withdrawals/request](https://stake.lido.fi/withdrawals/request?ref=blog.lido.fi). ![](https://blog.lido.fi/content/images/2025/10/data-src-image-3bb07aad-0996-4276-ab43-9422e6e0d3ba.png) ⚠️ *Escalation risk:* If more stETH holders join Veto Signalling during Deactivation, it can escalate into **Rage Quit**. ### Scenario 2: Severe Protocol Threats These are deliberate and hostile attempts to exploit governance or undermine the protocol. **Examples include:** - Malicious governance attacks by concentrated LDO holders. - Hostile changes to withdrawal contracts, fees, or security parameters. ### **Step by Step Response** ### **1\. Withdraw tokens** In case of a governance attack or hostile proposal, the safest action is to exit as soon as possible. - Tokens in the Veto Signalling escrow will automatically exit if Rage Quit is triggered, but this may take time depending on Ethereum validator exit capacity. - To secure an earlier position, request withdrawals directly at [stake.lido.fi/withdrawals/request](https://stake.lido.fi/withdrawals/request?ref=blog.lido.fi). This ensures your exit is processed before the Rage Quit batch. ![](https://blog.lido.fi/content/images/2025/10/data-src-image-915afbac-2b3b-4071-bd3a-cd1985c70b32.png) ### **2\. Place withdrawal NFTs into the Veto Signalling escrow** After initiating a withdrawal, you can still support a governance freeze by depositing your unstETH NFT into the Veto Signalling escrow. - These NFTs count toward thresholds and extend the dynamic timelock. - This gives stETH holders more time to exit while proposals remain blocked. **Note:** If Rage Quit is triggered, withdrawal NFTs placed in escrow become subject to a **60–180 day timelock**. To support Veto while your withdrawal request is processing, return to the Dual Governance website, click the "Support Veto" button and place your withdrawal NFT there → ![](https://blog.lido.fi/content/images/2025/10/data-src-image-73ff666b-67f5-46a2-8221-45649b303a1c.png) ### **If Rage Quit is not triggered** - Your tokens will finalize via the normal withdrawal queue. - To claim, first remove NFTs from the Veto Signalling escrow (5-hour minimum timelock applies). - Then use the Lido staking widget to claim ETH to your wallet. You may revoke tokens or NFTs from the Veto Signalling escrow at any time before Rage Quit is triggered. ### **If the 10% threshold is reached** - Rage Quit activates at the end of the Veto Signalling period (maximum 45 days). - All escrowed tokens are forced into exit. - Tokens cannot be revoked, restaked, or prevented from leaving. - A withdrawal timelock of 60–180 days applies, depending on escalation. ![](https://blog.lido.fi/content/images/2025/10/data-src-image-5d425119-3ba0-403c-8b9c-998c457111b0.png) **During Rage Quit:** - stETH/wstETH is automatically exited and claimed. - Withdrawal NFTs must be claimed manually. - A new Veto Signalling escrow is deployed to allow continued opposition. If successive escrows also reach 10%, additional Rage Quits occur, extending timelocks by 15 days each time (capped at 180 days). This prevents abuse of Rage Quit as a governance attack vector. After all Rage Quit exits complete and the 7-day extension ends, the system transitions to **Veto Cooldown**, then back to **Normal,** unless ≥1% of stETH remains in the active escrow, in which case a new cycle begins. ## Dual Governance - Frequently Asked Questions ### **What if the 1% threshold isn’t reached?** You can still exit normally. However, proposals will be enacted after the default timelock. ### **Can I revoke tokens after Rage Quit is triggered?** No. Once Rage Quit begins, all escrowed tokens are irreversibly queued for withdrawal. ### **Do standard withdrawals face the 60-180 day lock?** No. The timelock applies only to tokens in the Rage Quit escrow. Standard withdrawals can be claimed immediately once finalized. ### **What if I withdraw during Rage Quit but never joined vetoing?** Your withdrawal follows the normal process, unaffected by Rage Quit timelocks. Important to note however that the withdrawal order will be placed ***after*** the batch withdrawal NFTs of the Rage Quit, and processing time could therefore be longer than usual. ### **What if withdrawals are paused (GateSeal/Reseal)?** All exits, including Rage Quit and standard, are temporarily suspended until the DAO resolves the issue. More information on this [here](https://blog.lido.fi/dual-governance-101-explainer/). ### **What if my stETH is on a centralized exchange?** You cannot participate in Dual Governance from a CEX. To take part: 1. Transfer stETH to a self-custody wallet. 2. Connect to [dg.lido.fi](https://dg.lido.fi/?ref=blog.lido.fi). 3. Deposit tokens into the Veto Signalling escrow. ## Final Notes Dual Governance adds an essential layer of protection for stETH holders, giving them time and tools to respond to contentious governance outcomes. Whether dealing with minor missteps or major protocol threats, stETH holders have clear, enforceable options to safeguard their assets. ### Community Staking Module v2 Launch: Scaling Permissionless Staking, Empowering Community Stakers URL: https://blog.lido.fi/community-staking-module-v2-launch-scaling-permissionless-staking-empowering-community-stakers/ Last updated: 2025-10-02T16:03:31.000Z The Community Staking Module (CSM) [launched in October 2024](https://blog.lido.fi/community-staking-module-new-era-for-solo-stakers/) with the goal of making it easier for solo stakers to contribute to Ethereum’s security. Over the past 12 months, demand has outpaced supply. To further meet this demand, the CSM v2 expands the permissionless staking portion of the Lido protocol core pool from 3% to 5%, with a planned increase to 10% by late 2025 or early 2026\. Beyond the higher permissionless staking limit, the CSM v2 introduces the [Identified Community Stakers (ICS) framework](https://research.lido.fi/t/community-staking-module/5917/126?ref=blog.lido.fi), a novel approach to ensure that Community Stakers get the full benefits of the module. ## TLDR - **Live now:** The CSM v2 is available at [csm.lido.fi](http://csm.lido.fi/?ref=blog.lido.fi). - **ICS Incentives:** Apply to become an Identified Community Staker to access improved terms (boosted rewards, lower bond requirements, and prioritized access). - **Bigger share:** The Lido protocol’s permissionless staking share limit is now 5%, up from 3%. - **Path to 10%:** DAO tokenholders approved a potential increase to 10% by late 2025 or early 2026, subject to conditions. ## The CSM v2 Feature Set The CSM v2 focuses on two key goals: scaling the permissionless staking portion to 10% of protocol stake, and expanding meaningful participation for Community Stakers. This is accomplished through four key new features: - **Entry Gates:** Customizable entry pathways for Node Operators - **Identified Community Stakers:** Targeted incentives to increase solo staker participation - **Strikes System:** Permissionless ejection of underperforming validators - **EIP-7002 Integration:** Enablement of Execution Layer Triggerable Withdrawals ### Entry Gates [Entry Gates](https://hackmd.io/@lido/csm-v2-tech?ref=blog.lido.fi#Entry-Gates-and-Extensions10) create tailored entry pathways for Node Operators, enabling operator-specific features, such as unique reward shares or [bond](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-e4a6daadca12480d955524247f03f380) requirements. Any team or contributor can propose and develop an Entry Gate to serve Community Stakers according to specific goals. At launch, three Entry Gate contracts are included: Permissionless Operator, Identified Community Staker, and Legacy Early Adoption. Each contract maps to a Node Operator type with differentiated parameters. ### Identified Community Stakers Through the ICS Entry Gate, the CSM can provide targeted incentives to increase independent staker participation, rather than granting the same benefits to all operators. This approach helps enfranchise Community Stakers while reducing the likelihood that these benefits will be scooped up by large or professional operators. The ICS designation offers enhanced parameters compared with permissionless operators, including: - Increased rewards for the first active 16 keys, potentially delivering up to [2.36x](https://research.lido.fi/t/community-staking-module/5917/106?ref=blog.lido.fi) greater capital efficiency compared than vanilla solo staking - A reduced [bond](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-e4a6daadca12480d955524247f03f380) requirement of 1.5 ETH (down from 2.4 ETH) for the first key - Deposit priority for an operator’s first 10 keys (over the lifetime of an operator) - Broader acceptable validator performance **NOTE*: the CSM v2 currently supports 0x01 withdrawal credentials, so references to “keys” imply 32-ETH validators.* Refer to the additional enhanced parameters listed below. ![](https://blog.lido.fi/content/images/2025/10/data-src-image-995b0ef4-9c27-4ba0-8ee8-d62f5dd1d162.png) Operators can apply for ICS via the [CSM widget](https://csm.lido.fi/type/ics-apply?ref=blog.lido.fi). To qualify, applicants must provide proofs across three categories (i.e. Experience, Engagement, and Humanity) to verify themselves as individuals. Read the [ICS blog post](https://blog.lido.fi/unlock-exclusive-benefits-as-an-identified-community-staker/) to dive deeper. ### Strikes System & EIP-7002 Integration To boost the resilience and security of the module, an upgrade to the Lido protocol is shipping alongside CSM v2, integrating [EIP-7002](https://eips.ethereum.org/EIPS/eip-7002?ref=blog.lido.fi) (Execution Layer Triggerable Withdrawals) into the protocol. This integration improves fault tolerance and reduces trust assumptions by allowing the protocol to initiate validator exits via the Execution Layer with its withdrawal credentials, in cases such as voluntary operator requests or forced ejections of systemic underperformers. Building on this, the [Strikes system](https://hackmd.io/@lido/csm-v2-tech?ref=blog.lido.fi#Bad-performance-strikes26) introduced in the CSM v2 allows for the permissionless ejection of validators that consistently underperform, protecting protocol health and maintaining overall validator performance and APR. ## Toward a More Decentralized Ethereum With the release of the CSM v2, Community Stakers are poised to take on an even larger role in the Lido protocol, enabling the scaling of permissionless participation in the Lido protocol and further diversifying the Node Operator set. ### Next Steps 1. Explore CSM: [csm.lido.fi](http://csm.lido.fi/?ref=blog.lido.fi) 2. Apply to become an Identified Community Staker → [CSM widget](https://csm.lido.fi/type/ics-apply?ref=blog.lido.fi) 3. Start home staking with the CSM → follow the [Setup Guide](https://docs.lido.fi/run-on-lido/csm/?ref=blog.lido.fi) 4. Contribute to a more secure, decentralized Ethereum through the Lido protocol Happy home staking. ### Hex Trust Adds Custody Support for stETH via the Lido Protocol URL: https://blog.lido.fi/hex-trust-adds-custody-support-for-steth-via-the-lido-protocol/ Last updated: 2025-09-17T09:41:22.000Z [Hex Trust](https://www.hextrust.com/?ref=blog.lido.fi), a leading digital assets financial service provider specialising in market services, custody, and staking has introduced custody and staking support for stETH, Ethereum’s largest liquid staking token issued via the [Lido](https://lido.fi/?ref=blog.lido.fi) protocol. Institutions using Hex Trust can now access Ethereum staking rewards while maintaining flexibility and liquidity through stETH. stETH has become the most widely adopted liquid staking token on Ethereum, representing nearly a quarter of all staked ETH. It is integrated across lending platforms, trading venues, and collateral frameworks. For institutions, stETH provides a way to combine staking rewards with deep, immediate liquidity in their portfolios. By supporting stETH, Hex Trust brings together liquid staking and institutional-grade custody. Clients can hold and deploy stETH within their portfolios, stay liquid, and access onchain use cases without needing to run validator infrastructure directly. Hex Trust’s platform goes beyond custody, providing integrated access to markets, DeFi, and staking. This means institutions can manage stETH within a single infrastructure - from secure safekeeping through to onchain deployment - without adding new operational layers. ## **Built for Institutions** - **Secure Custody**: stETH supported within Hex Trust’s established custody platform, built for institutional clients. - **Capital Efficiency**: Receive Ethereum staking rewards while retaining the flexibility to manage portfolios and liquidity needs. - **Broad Utility**: Deploy stETH across lending markets, collateral frameworks, and restaking strategies, extending its value beyond simple staking. - **Operational Ease**: Access staking rewards without the overhead of running or managing validators directly. ## **Expanding Access to Institutional Staking** With more than $10 billion in assets under custody and a growing roster of institutional clients, Hex Trust’s support for stETH reflects how established custodians are incorporating liquid staking into their service stack. > “For institutional investors, efficiency and security are not just preferences — they are necessities,” said [Calvin Shen](https://www.linkedin.com/in/calvinshen/?ref=blog.lido.fi), Chief Commercial Officer at Hex Trust. “Our clients need to generate rewards without compromising on their risk framework. Our solution provides that critical combination: a secure custody platform that enables a seamless one-click staking experience. This eliminates the operational friction and counterparty risks associated with managing on-chain activities, allowing them to focus on portfolio strategy, not infrastructure.” The integration reinforces the momentum of institutional adoption of Ethereum staking and highlights stETH’s position as the market leader in liquidity and utility. For custodians, asset managers, and ETF issuers, stETH provides a scalable way to access staking rewards while retaining flexibility in portfolio and treasury management. > [Kean Gilbert](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi), Head of Institutional Relations at the Lido Ecosystem Foundation, added: “Hex Trust’s integration extends custody access to stETH, issued via the Lido protocol. This is another step toward making Ethereum staking accessible to institutions in a way that balances security, scale, and liquidity.” ### **About Hex Trust** Established in 2018, Hex Trust offers regulated institutional digital asset markets services, custody, and staking to builders, investors and service providers. Get access to our comprehensive, secure and regulated suite of services built on our fully integrated infrastructure. For more information, visit [hextrust.com](https://hextrust.com/consensus2025?ref=blog.lido.fi) or follow Hex Trust on [LinkedIn](https://www.linkedin.com/company/hextrust?ref=blog.lido.fi), [X](https://twitter.com/Hex%5FTrust?ref=blog.lido.fi) and [Telegram](https://t.me/hextrustannouncements?ref=blog.lido.fi). ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, please visit lido.fi/institutional **Follow Lido on X**: [x.com/LidoFinance](https://x.com/LidoFinance?ref=blog.lido.fi) **Follow Lido on LinkedIn:** [linkedin.com/company/lidofi](https://www.linkedin.com/company/lidofi/?ref=blog.lido.fi) ### Lido GGV: Automated Access to Blue-Chip DeFi Strategies URL: https://blog.lido.fi/lido-ggv-vault-access-to-defi-strategies/ Last updated: 2026-05-05T21:33:28.000Z Managing DeFi strategies has never been simple. Between monitoring multiple protocols, rebalancing positions, and keeping up with evolving yield opportunities, even experienced users face friction. For newcomers, this can be overwhelming. The **GG Vault (GGV)** was designed to solve this. In collaboration with [**Veda**](https://veda.tech/?ref=blog.lido.fi), [**Somm Finance**](https://somm.finance/?ref=blog.lido.fi), and [**P2P.org**](http://p2p.org/?ref=blog.lido.fi), GGV provides automated access to a curated set of blue-chip DeFi strategies. With one deposit, ETH, WETH, stETH, and wstETH holders can gain exposure to diversified, battle-tested protocols. All without the hassle and complexity of manual oversight. **Access Lido GGV here:** [**stake.lido.fi/earn/ggv/deposit**](https://stake.lido.fi/earn/ggv/deposit?ref=blog.lido.fi). ## What’s Inside the Vault DeFi offers enormous potential, but the user experience has remained fragmented, with strategies live across multiple networks and interfaces. GGV addresses these challenges by consolidating strategies into one integrated vault, removing the need for active management and enabling a smoother, safer entry point into DeFi. ![](https://blog.lido.fi/content/images/2025/09/data-src-image-fe3d4ca7-b84e-4a77-adbc-f24fc5149e96.png) At launch, GGV integrates strategies from some of DeFi’s most trusted protocols: - Uniswap - Gearbox - Aave - Euler - Balancer - Morpho - Fluid By bringing these strategies together, GGV creates a diversified yield engine, giving depositors broad exposure while minimising the need for direct management. ## Seamless Access Through Multiple Front-Ends GGV is designed as plug-and-play infrastructure. This means the vault can be integrated into a variety of user interfaces, each catering to different audiences and use cases. For launch, [**Somm Finance**](https://somm.finance/?ref=blog.lido.fi) and[**P2P.org**](https://p2p.org/?ref=blog.lido.fi)are the first front-end partners, providing users with a simple UI to deposit, monitor, and manage their position in the GG Vault. Additional integrations will follow, making GGV accessible through multiple platforms. ## Start Earning with the GG Vault The GG Vault is live. ETH holders can begin earning today by accessing GGV here: 1. Navigate to [stake.lido.fi/earn/ggv](https://stake.lido.fi/earn/ggv/deposit?ref=blog.lido.fi). 2. Connect a wallet. 3. Deposit ETH, WETH, stETH, or wstETH. 4. Receive GG tokens representing your shared position in the vault. Their value reflects the amount you deposited and the vault’s performance. 5. Hold GG tokens while DeFi rewards accrue behind the scenes according to the vault’s strategy. 6. Withdraw GG tokens to wstETH to exit the position, which can then be unstaked via [stake.lido.fi/withdrawals/request](https://stake.lido.fi/withdrawals/request?ref=blog.lido.fi), or simply held or re-utilized in other DeFi venues. 7. Rewards are automatically included in your GG token balance and are realized upon withdrawal to wstETH. ![](https://blog.lido.fi/content/images/2025/09/Screenshot-2025-09-17-at-09.16.11.png) ### Disclaimer - Rewards are not assured, may fluctuate and are influenced by factors outside the platform’s control, including changes to blockchain protocols, the specific rules and mechanisms established by each underlying blockchain network and validator performance. - Note, that the vaults involve protocol, slashing and other risks. You can find more details in the Lido GGV FAQs. Users should conduct their own research, seek professional advice, and ensure they understand, acknowledge and accept the risks before participating. - Lido GGV service relies on third-party infrastructure provided by Veda, subject to Veda’s [Terms of Service](https://veda.tech/terms?ref=blog.lido.fi) and [Privacy Policy](https://veda.tech/privacy-policy?ref=blog.lido.fi). ### Introducing Earn: stETH-Powered Vaults for Advanced DeFi Strategies URL: https://blog.lido.fi/introducing-earn-steth-powered-vaults-for-advanced-defi-strategies/ Last updated: 2025-09-03T16:07:22.000Z ## **TLDR** - The new [Earn tab](https://stake.lido.fi/earn?mtm%5Fcampaign=ll&mtm%5Fkwd=earn&mtm%5Fsource=blog&ref=blog.lido.fi) on [stake.lido.fi](http://stake.lido.fi/?ref=blog.lido.fi) offers a one-stop gateway to advanced DeFi strategies and decentralization-focused staking. - Connect a wallet, choose a vault, deposit in a few clicks, and monitor positions in one place. - Earn is launching together with two vaults: - **The GG Vault** (GGV) utilizes tried-and-tested strategies with premier DeFi protocols for increased rewards on deposits of ETH or (w)sETH. - **The Decentralized Validator Vault (DVV)** provides staking rewards boosted by Distributed Validator Technology (DVT) provider incentives while supporting Lido node operator decentralization. ## **Why Earn** The Earn tab enables users to allocate their crypto assets (ETH, WETH, stETH, and wstETH) to vetted DeFi strategies through stake.lido.fi. Instead of moving across multiple protocols to get higher rewards through credible strategies, Earn brings opportunities into a single flow where users can discover, deposit, and track, all without shifting between multiple UIs. ## **Meet the Launch Vaults** ## **1\. GGV: A One-Click Gateway to stETH-Driven DeFi** [**GGV**](https://stake.lido.fi/earn/ggv?mtm%5Fcampaign=ll&mtm%5Fkwd=ggv&mtm%5Fsource=blog&ref=blog.lido.fi) provides one-stop access to a set of blue-chip DeFi strategies, reducing the need to monitor multiple protocols or rebalance positions manually. In collaboration with **Veda Labs**,GGV is designed for users who want higher on-chain yields with diversified strategy exposure in an easy-to-use package. ![](https://blog.lido.fi/content/images/2025/09/GGV-1--1-.png) ### What’s Inside the Vault: At launch, integrations are sourced from established protocols, including **Uniswap**, **Gearbox**, **Aave**, **Euler**, **Balancer**, **Fluid** and **Morpho**. This consolidation creates a diversified rewards engine that aims to offer broad exposure without the overhead of running positions across many venues and chains. ### How to Use GGV via Earn: 1. Navigate to [stake.lido.fi/earn/ggv](https://stake.lido.fi/earn/ggv?mtm%5Fcampaign=ll&mtm%5Fkwd=ggv&mtm%5Fsource=blog&ref=blog.lido.fi). 2. Connect a wallet. 3. Deposit ETH, WETH, stETH, or wstETH. 4. Receive GG tokens representing your shared position in the vault. Their value reflects the amount you deposited and the vault’s performance. 5. Hold GG tokens while DeFi rewards accrue behind the scenes according to the vault’s strategy. 6. Withdraw GG tokens to wstETH to exit the position, which can then be unstaked via [https://stake.lido.fi/withdrawals/request](https://stake.lido.fi/withdrawals/request?ref=blog.lido.fi), or simply held or re-utilized in other DeFi venues. 7. Rewards are automatically included in your GG token balance and are realized upon withdrawal to wstETH. ### **One Vault, a Multitude of Access Points:** GGV is built as plug-and-play infrastructure that third-parties can integrate and extend. Somm Finance and[ P2P.org](https://eth-defi.p2p.org/?ref=blog.lido.fi) are the first front-end partners, offering a simple UI to deposit, monitor, and manage positions in GGV, with additional integrations planned. ## **2\. DVV: Earn While Supporting Decentralization** [DVV (Decentralized Validator Vault)](https://stake.lido.fi/earn/dvv?ref=blog.lido.fi) is implemented by Mellow. It channels deposits of ETH or WETH to Lido Core and its Distributed Validator Technology (DVT)-supporting modules: the Curated Module, the Simple DVT Module, and the Community Staking Module, with the goal of increasing the share of Distributed Validators in the node-operator set and improving network resilience. DVT is a technology that distributes a validator’s duties across multiple nodes to reduce single-point-of-failure risk and support higher uptime. Incentives and rewards: under the program parameters, over 75% of Lido-related Obol and SSV Network incentives are routed to vault stakers, with the remainder reserved for the node operators running the DVT infrastructure. The current reward share splits differ by module and are available [here](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x15cdcb4881d85d48e363bcc449cabfc26b627ac395e2515d65d6637453c35ab3). ![](https://blog.lido.fi/content/images/2025/09/DVV-2.png) ### **How to Use DVV via Earn:** 1. Navigate to [stake.lido.fi/earn/dvv](http://stake.lido.fi/earn/dvv?ref=blog.lido.fi). 2. Connect a wallet. 3. Deposit ETH or WETH. 4. Receive DVstETH tokens representing your shared position in the vault and start receiving Obol and SSV rewards, plus Mellow points. 5. Withdraw DVstETH tokens to wstETH once you decide to leave the position in Lido DVV. 6. Claim your rewards via the [Obol Incentives Program](https://obol.org/incentives?ref=blog.lido.fi) and [SSV Rewards](https://www.ssvrewards.com/?ref=blog.lido.fi). ## **What’s Next** Earn launches with GGV and DVV. Additional vaults may be introduced after evaluation against quality and security standards commensurate with those utilized for the Lido protocol. Access will be available via [stake.lido.fi](http://stake.lido.fi/?ref=blog.lido.fi) and, depending on the vault, through trusted partner access points. Explore vaults in Earn to get started. --- ## **Disclaimer** - Rewards are not assured, may fluctuate and are influenced by factors outside the platform’s control, including changes to blockchain protocols, the specific rules and mechanisms established by each underlying blockchain network and validator performance. - Note, that the vaults involve protocol, slashing and other risks. You can find more details in the Lido DVV and the Lido GGV FAQs. Users should conduct their own research, seek professional advice, and ensure they understand, acknowledge and accept the risks before participating. - Please note that Lido DVV service relies on third-party infrastructure provided by Mellow, subject to Mellow's[ Terms of Service](https://mellow.finance/Mellow-Terms-of-Service.pdf?ref=blog.lido.fi) and[ Privacy Notice](https://mellow.finance/Mellow-Privacy-Notice.pdf?ref=blog.lido.fi). And Lido GGV service relies on third-party infrastructure provided by Veda, subject to Veda’s[ Terms of Service](https://veda.tech/terms?ref=blog.lido.fi) and[ Privacy Policy](https://veda.tech/privacy-policy?ref=blog.lido.fi). ### Institutional Guide to Ethereum & Liquid Staking URL: https://blog.lido.fi/institutional-guide-to-ethereum-liquid-staking/ Last updated: 2025-08-27T13:13:33.000Z Institutional adoption of liquid staking is accelerating, driven by a growing recognition among custodians, asset managers, exchanges, and ETF issuers of its ability to deliver liquidity, operational efficiency, and simplified access to Ethereum staking rewards. To meet this demand, [Fireblocks](https://www.fireblocks.com/?ref=blog.lido.fi), [EY](http://www.ey.com/?ref=blog.lido.fi), and Lido Institutional contributors have collaborated on a detailed analysis covering liquid staking mechanics, liquidity considerations, and key risks to help institutions make informed decisions about incorporating liquid staking into their digital asset strategies. ### [Access the complete institutional analysis on Fireblocks.com](https://www.fireblocks.com/report/liquid-staking-101/?ref=blog.lido.fi) ## **What the analysis covers:** - An overview of Ethereum’s proof-of-stake mechanism, including key operational and financial considerations. - A detailed breakdown of Ethereum staking models: solo staking, staking-as-a-service, custodial staking-as-a-service, centralized liquid staking, and decentralized liquid staking. - An in-depth look at liquid staking mechanics, including primary (in-protocol) and secondary (market-based) liquidity. - Insights into liquidity profiles for institutional investors, including circulating supply, exchange availability, and daily trading volumes. - Risk considerations specifically for institutional liquid staking, including market volatility, counterparty risk, slashing risk, and operational risk management. If you’d like to get in touch with Lido’s institutional contributors and start staking ETH today, [get in touch](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi). *This analysis was jointly developed by Lido Institutional contributors, EY, and Fireblocks for educational purposes. It does not constitute financial, legal, or professional advice. For comprehensive insights and full disclaimers, please refer to the complete report.* ### Unlock Exclusive Benefits as an Identified Community Staker URL: https://blog.lido.fi/unlock-exclusive-benefits-as-an-identified-community-staker/ Last updated: 2026-08-27T08:22:12.000Z The Identified Community Staker (ICS) application is now live on mainnet! While the Community Staking Module (CSM) hasn’t been upgraded to v2 yet, both existing operators and aspiring CSM participants can begin submitting applications [here](https://csm.lido.fi/type/ics-system?ref=blog.lido.fi). The application is a mechanism that allows operators to identify themselves as individuals. Those who qualify as an Identified Community Staker (ICS) and run validators using CSM, can unlock enhanced parameters compared to general permissionless operators. **Important:** Whether or not an operator applies as an ICS, CSM remains fully permissionless — anyone can still participate without applying. ## Paving The Way For Home Stakers Since becoming fully permissionless in January, CSM has seen strong demand, with [450 operators registered](https://operators.lido.fi/module/3?ref=blog.lido.fi) \- including some larger operators drawn by attractive staking terms, such as low [bond](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-e4a6daadca12480d955524247f03f380) requirements and enhanced capital efficiency. This demand has left less room for independent stakers to join CSM and get their validator keys deposited. However, the primary goal of CSM is to empower home and community stakers by bringing new, independent participants into Ethereum staking, and CSM v2 aims to strengthen this mission by further supporting and expanding their numbers. To enable this, there should be a way to identify who qualifies as a Community Staker — and that’s where the application comes in. ## ICS: How It Works The application is based on the [Community Stakers Identification Framework](https://research.lido.fi/t/community-staking-module/5917/126?ref=blog.lido.fi), which introduces a score-based system designed to provide a straightforward and robust way for operators to identify themselves. Applicants are scored based on three broad categories: - **Experience**: Demonstrated experience in independent Ethereum staking - **Engagement**: Community involvement or contributions to the ecosystem - **Humanity**: Indicators of individual via third parties, as opposed to institutional behaviour ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXeMF2HpQ6TjXu1IXx_51ijD8lggrRslLdZxpWy6Ew5XoKyac_410EszjNj7cDD4zkteRvLC1d2PGDaBlRckOvK_tx9SJN-UOcGM7sKMBO0b2r6-dMslyFh7PCOT0aq-XxHmTvXxpA?key=4MxzxspHaaXGR_2mCysZxw) Each category includes a variety of proof sources, with each source contributing a certain number of points. To qualify, an applicant must meet the minimum threshold in each category and **achieve a total combined score of at least 15**. For a detailed breakdown of proof types and scoring, refer to the [Extended Framework](https://research.lido.fi/t/community-staking-module/5917/141?ref=blog.lido.fi#p-22081-high-level-design-of-the-framework-4). ## Ecosystem-Driven Proofs The ICS evaluation framework places significant emphasis on the data and assessment mechanisms drawn from the wider ecosystem. - **Experience data** is sourced from EthStaker/StakeCat, Obol network, and SSV network and historic CSM participation. - **Community engagement** is evaluated by [HighSignal](https://app.highsignal.xyz/?ref=blog.lido.fi), and **ecosystem contributions** are verified via [GitPoap](https://github.com/lidofinance/staking-modules/blob/develop/ics%5Fassessment/engagement/data/gitpoap%5Fholders.csv?ref=blog.lido.fi). - **Humanity verification** is conducted through Human Passport and [Circles](https://aboutcircles.com/?ref=blog.lido.fi). [Human Passport](https://passport.human.tech/?ref=blog.lido.fi) is one of the Proof-of-Humanity sources used in the application. It is an identity verification application and Sybil resistance protocol with more than 2.2M users. It enables users to collect verifiable credentials, or Stamps, that prove their unique humanity without exposing personally identifying information. A [custom interface](https://app.passport.xyz/?ref=blog.lido.fi#/lido%5Fcsm) is provided for applicants to view their Unique Humanity Score according to an [ICS-specific weighting model](https://research.lido.fi/t/community-staking-module/5917/160?ref=blog.lido.fi), designed to align the ICS scoring framework with the Human Passport system while maintaining proportionality with the original weights where possible. In some cases, weights have been increased to reflect a higher level of confidence applicable to ICS. This score is calculated after Stamps are collected, either proactively or passively, and is converted to corresponding ICS points during the application process. ## Benefits of ICS As per [DAO-approved CSM v2 fee structure](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0xf7b718e7807f763ba826735781145dd06b79b0228b37b74a22dd5ac252e03c40), ICS will enjoy tailored conditions aimed to benefit Community Stakers, including: - 6% reward share for the first 16 keys (compared to the flat 3.5%) - Reduced bond requirements from 2.4 to 1.5 ETH for the first key - Deposit priority for the first 10 keys - Wider acceptable validator performance Beyond the benefits above, you can view additional exclusive parameters [here](https://research.lido.fi/t/community-staking-module/5917/137?ref=blog.lido.fi). Is it worth the effort? Absolutely. For independent stakers, verifying as an Identified Community Staker is more than just a label — it’s the key to an easier, more rewarding experience within CSM. Better rewards, lower bonds, priority access — it’s well worth the effort to apply. ## Apply as an ICS The application process is straightforward, involving four main steps: 1. **Submit** **your application through the** [**CSM widget**](https://csm.lido.fi/type/ics-system?ref=blog.lido.fi). - Connecting the address for which you want ICS status - Optionally adding up to five addresses with supporting proofs - Optionally including contact information 2. **Wait for review**. If approved, you’ll see the status update with the estimated date of the next ICS list update. If not approved, you'll receive feedback to revise and resubmit. 3. **Wait for the ICS list to be updated**. Your address will be included in the next on-chain ICS list via Easy Track governance. 4. **Claim ICS Node Operator type.** Once the EasyTrack motion gets enacted. **Note**: You may begin submitting applications now. The first review round will conclude on October 1\. Following this, the [CSM committee](https://docs.lido.fi/multisigs/committees?ref=blog.lido.fi#29-community-staking-module-committee) together with Lido contributors will nominate the addresses associated with approved applications and execute on-chain updates to the ICS list via the[ Easy Track](https://lido.fi/governance?ref=blog.lido.fi#easy-track) governance mechanism, around October 8\. Applications submitted after October 1 will not be reviewed and approved in the first round. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcikUmmnbiVfWs_kRZEKeJGSuN2A2gRiPWP5nj8eE-dC_8A2qEoLG7QDcVHPsjz6Z-UJv_rSnIS4Kw_CgkxamFZUyb_dDnQlRTkBy2eAF1Qu2vG2_tzG6qdmMa6-ydEcXZEEspkKw?key=4MxzxspHaaXGR_2mCysZxw) ## Next Steps The full CSM v2 upgrade — including an increase in CSM share limit to 5% — is right around the corner. Submitting your application now affords the opportunity for approval in the first review round — positioning you to be among the earliest, excluding EA-migrated operators, to access ICS-specific benefits after the upgrade. ## Find Out More - [Identified Community Stakers Framework Walkthrough](https://www.youtube.com/watch?v=uKey7YUvYds&ref=blog.lido.fi) - [CSM v2 Features](https://hackmd.io/@lido/csm-v2-tech?ref=blog.lido.fi) - [Community Staking Module v2\. Architecture and Fee Structure](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0xf7b718e7807f763ba826735781145dd06b79b0228b37b74a22dd5ac252e03c40) - Extended [Community Stakers Identification Framework](https://research.lido.fi/t/community-staking-module/5917/141?ref=blog.lido.fi) - [Values for CSM v2 parameters](https://research.lido.fi/t/community-staking-module/5917/137?u=irina%5Feverstake&ref=blog.lido.fi) ### Lido Poolside Recap: Tokenholder Update, August 2025 URL: https://blog.lido.fi/recap-lido-q3-2025-tokenholder-update/ Last updated: 2025-12-01T14:26:06.000Z In the first Tokenholder Update call, [Vasiliy](https://x.com/%5Fvshapovalov?ref=blog.lido.fi), Executive Director of the Lido Labs Foundation, delivered updates on Lido's current status, Lido Labs' leadership changes and business approach, key growth priorities, and buyback proposals. Read the highlights below or watch the [full 50 minute recording](https://www.youtube.com/watch?v=31b7WG%5FvNdw&ref=blog.lido.fi). ## **Agenda** 1. Current State of Lido 2. Staking Market Overview 3. Lido Labs Leadership 4. New Business Approach 5. Restarting Growth: Key Segments 6. Buyback Proposals ## **Main Highlights** ### **New Leadership and Structure** Lido Labs Foundation has adopted a new leadership structure with clear hierarchy and defined reporting lines. [Vasiliy Shapovalov](https://x.com/%5Fvshapovalov?ref=blog.lido.fi) has transitioned from Research Lead to the newly created position of Executive Director, with [Isidoros Passadis](https://x.com/IsdrsP?ref=blog.lido.fi) as Chief of Staking, and [Sam Kim](https://x.com/samkim118?ref=blog.lido.fi) as Chief Legal Officer & Chief Operating Officer. ### **New Business Approach** The business strategy is now anchored in developing Ethereum's premier staking product while increasing surplus for LDO holders. ### **Growing Beyond LST: Low-Risk and APR Maxis Segments** Lido remains the largest liquid staking provider, ready to expand beyond simple LST into APR Maxis and low-risk markets, targeting different customer types with specific products. - **APR Maxis**: Targeting advanced, yield-seeking stakers with new high-yield products, such as [Lido Earn](https://stake.lido.fi/earn?ref=blog.lido.fi) – stETH powered vaults for advanced DeFi strategies - **Low-Risk Staking**: Launching customizable stVaults and custodial wrappers tailored for institutions and risk-averse users. ### **Buyback Proposals** Several buyback mechanisms are being discussed. The first proposed step [is to develop NEST ](https://research.lido.fi/t/nest-network-economic-support-tokenomics/10648?ref=blog.lido.fi)(triggerable rails to buy LDO with stETH, compatible with any mechanism). It builds a foundation and flexibility for any approach selected in the future.A detailed proposal outlining the chosen mechanism will be published by the end of the year. ## **1\. The Current State of Lido** ### **Business Model** ![](https://blog.lido.fi/content/images/2025/09/data-src-image-2f5aa794-7b47-47c0-8a47-0462a5e4c187.png) Users deposit ETH to the Lido protocol and receive stETH (staked ETH) in return, a liquid token that can be utilized across the broad DeFi ecosystem. The ETH is allocated through the Staking Router into various Staking Modules. Staking rewards flow back to the Lido protocol, with 90% distributed to stakers, approximately 5% (depending on the Staking Module) allocated to Node Operators, and the remainder directed to the Lido DAO Treasury. ![](https://blog.lido.fi/content/images/2025/09/data-src-image-6035a30f-536f-4aec-9103-7291b5157fc0.png) Lido DAO is a decentralized organization governed by the LDO holders. [Through the governance process](https://lido.fi/governance?ref=blog.lido.fi), the tokenholders oversee upgrades and changes to the Lido protocol and manage the Lido DAO Treasury, which funds operations for Lido Labs Foundation and other foundations contributing to the protocol. ### **Financials** Since launching in December 2020, Lido has grown from 1.6M staked ETH (2021) to a peak of 9.7M ETH (2024). ![](https://blog.lido.fi/content/images/2025/09/data-src-image-b6188b09-b140-4852-a080-a84a1bd99ec8.png) Same time total spending decreased from $190.8M (2021) to a projected $46.5M (2025). ![](https://blog.lido.fi/content/images/2025/09/data-src-image-ecd0f1b1-d257-4f97-be10-6ec3e377a060.png) This reflects evolution from a growth-stage protocol requiring heavy liquidity incentives to a sustainable business model. For deeper insights, refer to the Lido Protocol Economic Reports: [dune.com/steakhouse/lido-safu](https://dune.com/steakhouse/lido-safu?ref=blog.lido.fi) ## **2\. Staking Market Overview** ### **Lido’s Protocol Market Share** Lido remains the largest liquid staking provider, commanding 24.7% of all staked Ethereum—well ahead of Coinbase (11.7%) and Binance (8.4%). However, while Lido’s total ETH staked has continued to grow, its overall market share has declined as new staking segments have emerged and expanded more rapidly. ![](https://blog.lido.fi/content/images/2025/09/data-src-image-60f4c5d9-4be9-4007-a19e-9746edbb5b9c.png) More details in the [Extended Lido Analytical Dashboard on Dune](https://dune.com/LidoAnalytical/Lido-Finance-Extended?ref=blog.lido.fi). This trend can be understood by looking at the evolving landscape of Ethereum staking. The market could be fragmented into five key segments: APR Maxis, simple LST users, exchange staking, low-risk staking, and other—uncategorized stakers like home stakers. ### **Staking Market Segments** ![](https://blog.lido.fi/content/images/2025/09/data-src-image-538bb22d-922d-4d6e-b3ff-f8bc5de6dc41.png) - **APR Maxis**: In 2023, only 2% of staked ETH was used in yield-enhancing strategies due to limited available options. By 2025, that share grew to 20%, driven by the rise of restaking, leveraged staking, junior tranches in fixed-yield protocols, liquid vaults, and other advanced staking mechanisms. - **Simple LST**: The largest segment in 2023 at 35% shrank to 20% by 2025. - **Exchange staking**: Grew by 5 percentage points from 25% to 30%. - **Low-risk staking**: Remained fairly constant at 20%—typically delegated staking for high-net-worth individuals, institutions, and funds. ### **Lido’s Position Within Each Market Segment** ![](https://blog.lido.fi/content/images/2025/09/data-src-image-f6260b5d-3914-4e27-8b5f-92a1564dd459.png) Lido protocol continues to lead the Simple LST segment with 90% market share, while the segment itself has contracted from 35% to 20% over the past two years. The biggest growth category has been APR Maxis, where Lido is actively used, but the competition in this category has grown significantly compared to 2023. Exchange staking has also expanded, though this segment remains not easily accessible for non-exchange providers. ## **3\. Lido Labs Leadership** In response to evolving market conditions, to strengthen Lido's presence in the segments driving today's growth, Lido Labs has restructured its leadership and developed a more focused business strategy. ![](https://blog.lido.fi/content/images/2025/09/data-src-image-3b1eb46a-d357-4c97-a352-bcec67460152.png) [Established earlier this year ](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0xdf648307e68415e7b5cf96c6afbabd696c1731839f4b4a7cf5cb7efbc44ee9d6)with a horizontal structure, Lido Labs Foundation has now adopted a new leadership structure with a clear hierarchy and defined reporting lines. While the core team remains largely unchanged, the key development is Vasiliy Shapovalov’s transition from Research Lead to the newly created position of Executive Director, with Isidoros Passadis as Chief of Staking, and Sam Kim as Chief Legal Officer & Chief Operating Officer. ## **4\. New Business Approach** The new leadership team formulated a strategic business approach aligned with the protocol mission. 1. Long-term success will be measured by developing **Ethereum's premier staking product while increasing surplus for LDO holders**; 2. All proposals and products must demonstrate clear commercial value. To support these priorities, the budget has been restructured: core business maintenance is maintained at breakeven, while a separate budget is committed to growth initiatives: - Base: $31M - Growth and liquidity: $17M (10-15% of treasury). ### **Directions for Surplus Growth** 1. **Growing share in staking:** 1. Capture time-limited opportunity as institutional vehicles like ETFs and treasury companies enter the market. 2. Target the APR Maxis segment by creating high-yield products, as user capital in this segment is highly yield-sensitive and can be captured with superior APR offerings. 2. **Increasing revenue of market share:** without raising fees, which could risk losing stakers. It can be addressed through V3 stVaults pricing and synergistic products, including liquid vaults and lending markets. 3. **Reducing the cost of revenue:** Community Staking Module serves as an example of this approach in practice. 4. **Reducing operating expenses:** The number of contributors was reduced by 15% to improve operational efficiency. 5. **Diversifying revenue streams** ## **5\. Restarting Growth: Key Segments** In past years, Lido DAO prioritized foundational improvements over short-term market capture tactics. Investments in the Dual Governance and Community Staking have strengthened the protocol's security, decentralization, and long-term sustainability. For progress tracking on these goals, refer to the Lido on Ethereum [Scorecard](https://lido.fi/scorecard?ref=blog.lido.fi). Now, Lido stETH stands as the best-in-class LST product. With $176M in treasury, Lido is well positioned for growth, fueled by strong liquidity, brand recognition, and an extensive network that enables entry into new, more customized market segments. Combined with the expectation of rapid market expansion, this creates the perfect momentum to push forward. ### **Expanding Beyond LST** Lido is ready to expand beyond the simple LST category into APR and low-risk staking, using LST liquidity while targeting different customer types. ![](https://blog.lido.fi/content/images/2025/09/data-src-image-09a556f1-e578-43c3-b4c1-19eebdaf521d.png) ### **APR Maxis** Lido protocol is positioned to recapture leadership in the APR-maxis segment[ through V3 vaults](https://v3.lido.fi/?ref=blog.lido.fi) and strategic DeFi integrations, transforming short-term market pressures into mid-term competitive advantages. Existing products: - stETH looping - stETH collateral in LRTs ### **Low-risk Staking** This segment remains a big greenfield opportunity for Lido as it offers - **stVaults** \- customizable staking solutions with access to best-in-class liquidity. - **Custodial wrapper products** \- institutional-friendly packaging *Vaults are great for Insti because of full customization while still giving access to best-in-class liquidity, as evidenced by the recent win.* Starting in a few months, ETH bridged to @LineaBuild will be automatically staked on the Ethereum mainnet through Lido v3\. ### **V3 Vaults for Delegated Staking (Delegation++)** The low-risk category is mostly delegated staking with Node Operators like Figment and P2P running expert sales teams to get customers. At the moment, they have no incentive to recommend liquid staking or DeFi strategies since they would lose those customers, and have very few customization opportunities. Node Operators struggle with differentiation—staking is essentially the same service regardless of provider, with only minor setup differences that many stakers don't understand or care about. Lido V3 allows node operators and channel partners to offer liquidity and DeFi participation without losing clients or staking fees—it's an enhanced delegation model. For more details on the staking market segments, [proceed to the full recording of the call](https://www.youtube.com/watch?v=31b7WG%5FvNdw&t=1495s&ref=blog.lido.fi). ## **6\. Buyback Proposals** Several buyback proposals are being discussed on the Research forum ([1](https://research.lido.fi/t/dynamic-buyback-program-for-ldo/10494?ref=blog.lido.fi), [2](https://research.lido.fi/t/rfc-align-ldo-with-protocol-fees-without-buybacks-or-dividends/10589?ref=blog.lido.fi) and [3](https://research.lido.fi/t/nest-network-economic-support-tokenomics/10648?ref=blog.lido.fi)). While this aligns with the directional goals for this year, further evaluation is advised, as major improvements in regulatory clarity are expected within weeks, and possible mechanisms (manual, semi-automated, or fully automated) need to be agreed on. ### **Proposed solution** - Implement NEST (triggerable rails to buy LDO with stETH, works with any future mechanism). - Research and select the best framework. - Make a holistic decision on the exact approach as a part of GOOSE-3 ([the Guided Open Objective Setting Exercise](https://research.lido.fi/t/the-guided-open-objective-setting-exercise-goose-proposal-a-genesis-step-to-jump-start-a-dao-wide-goal-setting-exercise-and-cadence/5355/9?ref=blog.lido.fi)) and EGG (Ecosystem Grants gRequest) proposals for 2026. The formal proposal is published; for further details, [check the Research Forum](https://research.lido.fi/t/nest-network-economic-support-tokenomics/10648?ref=blog.lido.fi). ## **7\. Next steps** - Start building [on the stVaults testnet](https://v3.lido.fi/testnet?ref=blog.lido.fi). - Signal demand to your custodian or exchange, or express interest in deploying capital for stETH ETPs or ETFs [via this form](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi). - [Vote](https://vote.lido.fi/?ref=blog.lido.fi) or [delegate your LDO](https://vote.lido.fi/delegation?ref=blog.lido.fi) and participate in governance. To dive deeper, watch the full Tokenholder Update Call that covers detailed financial breakdowns, technical roadmap insights, and an extended Q&A session. *The next Tokenholder Update will be held in Q4 2025\. Community calls with special guests will continue monthly – stay tuned for announcements.* ## **Disclaimer** This material is for informational purposes only and is not investment, legal, or tax advice. No representation or warranty, express or implied, is made as to its accuracy, completeness, or timeliness. Any opinions or forward-looking statements reflect the current judgment of the presenter as of the date of this presentation and are subject to change without notice. ### GK8 by Galaxy Launches Custody for Lido's stETH, Expanding Institutional Liquid Staking Access URL: https://blog.lido.fi/gk8-galaxy-launches-custody-for-lido-steth/ Last updated: 2025-08-07T12:18:20.000Z The institutional adoption of liquid staking has reached another important milestone, as [GK8 by Galaxy](https://www.gk8.io/?ref=blog.lido.fi), a leading institutional-grade custody provider and wholly-owned subsidiary of [Galaxy](https://www.galaxy.com/?ref=blog.lido.fi), announces the integration of custody support for Lido's stETH. GK8’s support of stETH, Ethereum’s leading liquid staking token issued via the Lido protocol, addresses critical institutional needs including security, compliance, and capital efficiency. ## **Lido's stETH: Ethereum's Most Liquid Institutional Staking Token** stETH is Ethereum’s most widely adopted liquid staking token, currently representing nearly 25% of all staked ETH, and over $30 billion in total value locked (TVL). Institutions increasingly recognize the need to access staking rewards without sacrificing liquidity. Unlike other staking tokens, stETH provides deep liquidity, allowing institutions to enter or exit substantial positions seamlessly, with minimal slippage across major decentralized finance (DeFi) and centralized platforms. ## **Institutional-Grade Custody with GK8 by Galaxy** GK8 by Galaxy provides secure, institutional self-custody technology designed specifically for institutions. Its custody infrastructure is built to ensure that institutions maintain compliance and operational control while interacting securely with digital assets. With this integration, GK8 clients can securely custody stETH by leveraging GK8's advanced custody technologies, such as the Impenetrable Vault for fully offline storage, and Unlimited Multi-Party Computation (uMPC) for highly secure, flexible and fast transaction signing. This unique combination ensures maximum asset security, and operational scalability, providing institutions with a strong foundation for Ethereum staking via stETH. > “Liquid staking has been a foundational element for crypto-native participants, and we’re now seeing institutional interest accelerate – driven by growing market maturity and increased regulatory clarity,” says [Benjamin Duve](https://www.linkedin.com/in/benjamin-duve-592a04/?ref=blog.lido.fi), Global Head of Partnerships at GK8 by Galaxy. “By integrating stETH, we’re proud to provide our institutional clients with secure, compliant access to the broader digital asset ecosystem, enabling them to participate confidently in emerging opportunities like liquid staking and beyond.” ## **Key Benefits for Institutions** By enabling institutions to securely custody and mint stETH directly through its platform, GK8 provides clear advantages to its clients: - **Enhanced Capital Efficiency**: Institutions gain the ability to seamlessly receive Ethereum staking rewards while maintaining liquidity, improving overall portfolio performance and flexibility. - **Compliant solutions**: GK8 strives to maintain compliance with evolving global regulatory requirements, making it easier for regulated entities to incorporate stETH into their portfolios - **Secure Direct Minting**: Through GK8’s integration, institutions can directly mint stETH, simplifying access to Ethereum staking rewards without additional intermediaries or technical complexities. ## **Strengthening Institutional Adoption of Ethereum** This launch is part of the Lido Ecosystem Foundation’s broader strategy to strengthen stETH’s position as the institutional standard for Ethereum liquid staking, supported by trusted custodial integrations like GK8 by Galaxy. > “GK8’s integration is another key milestone for institutional liquid staking," said [Kean Gilbert](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi), Head of Institutional Relations at the Lido Ecosystem Foundation. "By combining GK8’s custody solutions with stETH’s market-leading liquidity available via the Lido protocol, institutions now have a secure, compliant, and capital-efficient way to deploy their Ethereum holdings strategically.” For more details or to begin staking ETH via GK8 by Galaxy, contact [Lido Institutional](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi). ## **Stay up to date with Lido Institutional:** - [Website](https://lido.fi/institutional?ref=blog.lido.fi) - [LinkedIn](https://www.linkedin.com/company/lidofi/?ref=blog.lido.fi) - [X (Twitter)](https://x.com/LidoFinance?ref=blog.lido.fi) ### Linea and Lido V3: Bringing Native Yield to L2s URL: https://blog.lido.fi/linea-lido-bringing-native-yield-to-l2s/ Last updated: 2025-08-04T15:00:41.000Z ## **Overview** Contributors to the Lido protocol are proud to announce the upcoming integration of Lido v3 and stVaults into [Linea](https://linea.build/?ref=blog.lido.fi)’s ***Native Yield***, a new protocol mechanism for automatic, directly integrated Ethereum staking rewards. [***Linea Native Yield***](https://linea.build/blog/introducing-native-yield-sustainable-defi-rewards-from-bridged-eth?ref=blog.lido.fi) is a novel mechanism that channels Ethereum staking rewards from bridged ETH (L1 → L2) directly into Linea’s liquidity incentive program, which can then be claimed by Linea users. Linea Native Yield will work by leveraging the upcoming stVault architecture of the Lido protocol as one of the core components of its yield engine, and Native Yield functionality will be available for all Linea stack chains to optionally activate. The Lido [V3 whitepaper](https://hackmd.io/@lido/S1-r1Cdexl?ref=blog.lido.fi) outlines a range of stVault use cases centered around institutional and DeFi staking vaults, and Linea’s Native Yield infrastructure illustrates the range of new technology enabled by Lido V3’s composable tech stack. ## **Bridged ETH as Yield-Bearing Infrastructure** From a unique model designed by the Linea team and in collaboration with Lido protocol contributors, bridged ETH on Linea will automatically earn Ethereum-native staking rewards without altering the withdrawal or custody guarantees of the bridge. ETH deposited to Linea will be staked via a Lido v3 stVault, controlled by Linea’s protocol infrastructure, with rewards directed toward liquidity providers and DeFi participants on Linea. This design ensures bridged ETH on Linea contributes to network staking incentives while preserving full non-custodial and permissionless access to funds. Withdrawals on Linea are processed through a protocol-level Liquidity Buffer, which holds a reserve of unstaked ETH to enable immediate redemptions under normal conditions. In scenarios where the buffer is temporarily depleted, such as during high-volume exits, users are offered a secondary withdrawal path via stETH, allowing them to exit without delay. This fallback mechanism ensures continuous access to funds while preserving the non-custodial and trust-minimized guarantees of the bridge. ## **Lido V3 & stVaults: Purpose-Built for Bridging & Infrastructure** [Lido V3](https://blog.lido.fi/lido-v3-ethereum-staking-infrastructure/), scheduled for mainnet release in early Q4/2025, introduces **stVaults**, a modular primitive for building secure, non-custodial Ethereum staking vaults. stVaults provide infrastructure partners - including rollups, custodians, and enterprise staking providers - with the ability to create purpose-specific staking environments without compromising on operator requirements, permissionless access, or access to liquidity. In its effort to push forward DeFi innovation and increase onchain capital efficiency, the Linea team explored multiple avenues to deliver native staking functionality, including consideration of both custom staking setups as well as LSTs. When Lido V3 was announced, the Linea team appreciated the key innovations that it would bring, and was eager to work closer with Lido contributors on being one of the first adopters of this technology. The specially configured Linea stVault deployment will be integrated into their Native Yield infrastructure, serving bridge-native capital flows, and enabling Ethereum-native yield to be earned by ETH bridged to the Linea L2\. The stVault integrates directly with Linea’s infrastructure, offering protocol-level control over staking, rebalancing, and liquidity management while maintaining the same non-custodial properties as Lido’s V3 protocol. The Linea configuration does not mint stETH by default. Instead, it uses a staking-only flow with a rebalancing mechanism that preserves capital availability through an unstaked buffer. The stVault is managed by Linea’s Native Yield Operator, who cannot withdraw funds externally but can perform staking and liquidity operations under protocol-enforced constraints. This implementation highlights stVaults as general-purpose staking infrastructure, capable of supporting bridge systems, liquidity programs, and ecosystem-aligned yield flows with minimal additional risks. ## **Ethereum-Centric Staking, Extended to L2** The launch of Linea Native Yield coincides with accelerating momentum around Ethereum. By leveraging Ethereum-native staking rewards to fund liquidity, the design supports sustainable ecosystem incentives aligned with long-term network security, and Linea, as believers in the vision for this new chapter in the Lido protocol, has chosen to adopt the protocol’s technology to help power its Native Yield engine. Linea Native Yield reinforces Ethereum’s position in DeFi as a secure and yield-generating base asset, and the Lido protocol as the unique staking solution able to meet its complex technical, security, and governance requirements. On Linea, bridged ETH contributes to validator operations and liquidity growth while remaining permissionlessly accessible. - ETH earns L1-native yield - Yield funds ecosystem liquidity - Liquidity drives protocol utility and fee generation - Protocol-level ETH burn complements deflationary pressure The result is a virtuous cycle for ETH on Layer 2 - yield generation, protocol revenue, and economic alignment. **If you’re building Ethereum scaling infrastructure, or are using the Linea stack for your chain and considering Native Yield, and you’re curious about bringing stVaults to your protocol, get in touch with the Lido contributor team.** ## **Additional Resources** - [Lido V3 stVault Whitepaper](https://hackmd.io/@lido/S1-r1Cdexl?ref=blog.lido.fi) - [Linea Native Yield Litepaper](https://community.linea.build/t/linea-native-yield/10588?ref=blog.lido.fi) - [Introducing Native Yield: Sustainable DeFi Rewards from Bridged ETH](https://linea.build/blog/introducing-native-yield-sustainable-defi-rewards-from-bridged-eth?ref=blog.lido.fi) ### Caladan Integrates stETH as Institutional OTC Collateral URL: https://blog.lido.fi/caladan-integrates-steth-as-institutional-otc-collateral/ Last updated: 2026-05-28T14:16:22.000Z [Caladan](https://caladan.xyz/?ref=blog.lido.fi), an institutional OTC desk handling over $50 billion annually across 65+ exchanges, now accepts stETH - Ethereum’s largest liquid staking token issued via the Lido protocol - as collateral across its options and structured-product desks. Hedge funds, crypto-native trading firms, and foundations can now use stETH as collateral for sophisticated options, hedging, and short-term positioning strategies. Crucially, institutions retain full liquidity and continue receiving Ethereum staking rewards even as they strategically deploy their assets. ### **Institutional adoption driven by deep liquidity** Institutional adoption of liquid staking tokens continues to accelerate, with stETH now representing over $30 billion in ETH staked via the Lido protocol. Broad integrations across decentralized finance (DeFi), OTC desks, and major custodians - including Fireblocks, Copper, and BitGo - further reinforce stETH’s position as the institutional standard for liquid staking. Caladan’s addition of stETH simplifies previously complex processes for institutions aiming to incorporate liquid staking into structured trading, risk management, and treasury operations. ### **Key Benefits of Using stETH Collateral with Caladan** - **Receive staking rewards and maintain liquidity:** Keep ETH staked and receiving rewards while deploying it as collateral. - **Streamlined operational integration:** Caladan simplifies operations, making stETH easy to integrate into sophisticated institutional trading strategies. - **Institutional-Grade Trading Infrastructure:** Leverage Caladan’s extensive OTC network, executing over $50 billion annually across 65+ exchanges, enabling efficient and scalable deployment of stETH collateral. *“This is about unlocking new capital pathways,” said Julia Zhou, COO of Caladan. “Instead of forcing institutional players to choose between yield and liquidity, we’re giving them both, as well as strategic optionality.”* *“Caladan’s integration shows why institutions are increasingly turning to stETH," added* [*Kean Gilbert, Head of Institutional Relations at the Lido Ecosystem Foundation*](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi)*. "They gain access to market-leading liquidity, Ethereum staking rewards, and decentralized infrastructure through the Lido protocol - all key ingredients for strategically deploying ETH holdings.”* This integration is another meaningful step forward for institutional adoption of liquid staking. With proven liquidity, extensive institutional adoption, and decentralized infrastructure, stETH is fast becoming a core component of efficient treasury management. For more information on utilizing stETH collateral with Caladan, please contact the [Lido Institutional team](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi). ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido protocol’s open-source, liquid staking middleware by non-retail users. Lido middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, please visit [lido.fi/institutional](http://lido.fi/institutional?ref=blog.lido.fi). **Stay up to date with Lido Institutional** - [Website](https://blog.lido.fi/lidos-roadmap-to-pectra-delivering-validator-consolidations-in-the-protocol/) - [LinkedIn](https://www.linkedin.com/company/lidofi?ref=blog.lido.fi) - [X (Twitter)](https://x.com/LidoFinance?ref=blog.lido.fi) ### Lido’s Roadmap to Pectra: Delivering Validator Consolidations in the Protocol [Pt 3] URL: https://blog.lido.fi/lidos-roadmap-to-pectra-delivering-validator-consolidations-in-the-protocol/ Last updated: 2025-07-25T10:06:49.000Z ### Introduction In the [previous 'Lido's Roadmap to Pectra' explainer](https://blog.lido.fi/lidos-roadmap-to-pectra-navigating-complexity/), we discussed how contributors to Lido DAO have been approaching the Ethereum protocol changes introduced by the Pectra hard fork (live since May 7 2025), particularly the opportunities and risks tied to EIP-7251, the major upgrade that raised MAX\_EFFECTIVE\_BALANCE limits for validators. The article outlined three key areas of focus: - **Consolidation and large validator benefits and tradeoffs:** Merging multiple 32-ETH validators into larger units reduces network load, and has a small positive impact on rewards. Effects on slashing and correlation risks are small, but response time becomes crucial to mitigate any losses. - **Modular upgrade:** Any Lido protocol changes to support consolidations will be delivered through the Staking Router architecture, working towards a clean and safe deployment in line with the protocol's newest architecture. - **Phased rollout:** Contributors are planning a careful and staged delivery of consolidations for the Lido protocol in Two Phases, starting with Lido V3, previewing more details to come on risks, scope, and release plans. Balancing security, decentralization, and efficiency are key factors in shaping Ethereum’s staking landscape, and Lido will play a key role in scaling Ethereum. Today’s article discusses this commitment with a concrete plan to deliver the upgrade to all users of the Lido protocol. Over the past months, Lido contributors have been exploring the opportunities and tradeoffs associated with validator consolidations, a concept unlocked by Ethereum’s latest upgrade, Pectra. The groundwork has been laid for some major protocol upgrades that stand to meaningfully improve the overall network while making the Lido protocol even more efficient and scalable. Today we dive deep into understanding this evolution and how it reflects the long term vision for Lido, including the role the protocol will play in the future of Ethereum validation. Once [Lido v3](https://v3.lido.fi/?ref=blog.lido.fi) launches, the protocol will consist of two main parts: stVaults and Lido Core (which includes the Staking Router and its modules). stVaults will support 0x02-type large validators from day one, along with validator consolidations to a certain extent. ## Lido Core, Large Validators & Consolidations The Staking Router (SR) in Lido is a core architectural component that enables modular, and flexible Node Operator participation in the Lido staking protocol. It acts as the coordination layer in Lido Core, allocating staking deposits between the various modules that make up the core protocol. SRv2, launched in 2024, finally transitioned Lido from a monolithic, whitelisted operator set to its current modular architecture (which includes the Curated Module, SimpleDVT and Community Staking Module, plus any upcoming modules). ### Staking Router v3 A new full-featured upgrade, dubbed Staking Router v3, is currently in development, and support for large validators and validator consolidations is expected to ship alongside it, in the first half of 2026. SRv3 isn't just a minor update, it marks a significant step forward in the Lido DAO's commitment to Ethereum's long-term health and its benefits for the community. It reflects months of foundational design work and would act as a cornerstone release for the protocol's next phase. SRv3 is structured to serve multiple longer-term goals: - Implementing a balance-based accounting system across the protocol, enabling modules to use either 0x01 or 0x02 validator types, and thus larger validators and validator consolidation. - Enabling selective direct deposits at the module level, which compliments products such as the Distributed Validator Vault (DVV), ensuring that stake flows to validators that are run in a certain manner. - Enabling stake reallocation between operators and/or modules through a combination of triggerable withdrawals, validator consolidations, and module direct deposit functionality. - Laying the groundwork for marketplace functionality, a more granular architecture for SR stake allocation to be designed in tandem with other upcoming changes at the module level. ### Staking Router v3 & What's Next Why are consolidations so important? Support for the new EIPs, including EIP-7251, is a key step in bringing Lido closer to Ethereum’s native validator mechanics, and it goes well beyond just letting operators consolidate their managed stake. While users might see some benefits like faster stETH redemptions, the real impact is deeper: it unlocks a more flexible and efficient protocol, technically and operationally. With these changes, the protocol will be able to do things like: - Reallocate stake between operators/modules with consolidation operations - Support new deposits into large validators, naturally streamlining the network - Lay the groundwork for smarter, leaner validator management overall **A new, 0x02-ready, accounting model: Although already supported by the stVaults architecture, this is a fundamental shift for Lido Core.** Currently, the Lido Protocol handles critical aspects of validator accounting (including functions such as: deposits, rewards, withdrawals, etc.) through a unit-based approach where 1 validator equals 32 ETH. A balance-based accounting model is absolutely crucial for consolidations because it allows the protocol to treat validators as flexible balances rather than fixed units, enabling seamless consolidation. For this to happen, a major rework of several key components of the on-chain protocol is necessary. **Consolidations via EasyTrack: This initial, optimistic and governance-driven implementation provides a secure and transparent way to operationalize consolidations, ensuring immediate utility for Node Operators.** By leveraging EasyTrack, an established and robust mechanism for regular protocol operations, the delivery of consolidations is significantly expedited. It can be implemented using Lido’s existing governance structure, significantly reducing the risks and operational overhead involved in the process. ### Other Unlocked Features As mentioned, SRv3 isn't just about unlocking consolidations. It also includes other vital components that lay the groundwork for Lido's future, including foundational support for Direct Deposits. SRv3 will allow direct deposit support, which will streamline how new stake comes into the protocol and is allocated. This feature will initially be enabled at the module level (restricted to whitelisted actors), with the potential to become available for individual Node Operators within modules that support future allocation logic. ### **Groundwork for a New Stake Allocation Mechanism** These capabilities will enable the protocol to strategically optimize stake distribution based on defined parameters and performance metrics, a feature that has precedence in the protocol via CSMv2\. Over time, the basic marketplace structure will support a more balanced and diversified validator set: reducing over-concentration, improving fault tolerance, increasing overall returns, and strengthening the resilience of the Lido protocol. ## The Roadmap The development plan for SRv3 reflects a clear set of priorities: 1. Validator Consolidations: This is the top priority, ensuring effective and protocol-aligned rollout for operators. 2. Direct Deposits: The next critical step to enhance stake inflow. 3. Foundational stake allocation design: Essential for our long-term vision, expected to be designed alongside the SRv3. ![](https://blog.lido.fi/content/images/2025/07/roadmap--3-.png) These upgrades are currently deep in research and development. ![](https://blog.lido.fi/content/images/2025/07/Screenshot-2025-07-18-at-10.44.34.png) ### A Stronger, More Resilient Lido The commitment to ship these upgrades in **H1 2026**, centered around Lido Core consolidations enabled by EIP-7251, reflects a coordinated effort across protocol stakeholders, driven by a shared focus on building a stronger, more resilient Lido. These changes are expected to significantly improve operational efficiency, reduce costs, and enhance the overall health of the protocol. Node Operators, in particular, stand to benefit from simplified management and lower overhead. This release marks another step in Lido’s ongoing commitment to innovation, decentralization, and delivering meaningful improvements across the ecosystem. More updates will follow as the rollout of SRv3 progresses. ### BitGo Becomes First U.S. Custodian to Enable Native ETH Staking via Lido URL: https://blog.lido.fi/bitgo-becomes-first-us-custodian-to-enable-native-eth-staking-via-lido/ Last updated: 2025-07-17T14:09:13.000Z [BitGo](https://www.bitgo.com/?utm%5Fsource=website&utm%5Fmedium=staking&utm%5Fcampaign=lido), a leading qualified custodian trusted by over 2,000 institutional clients globally, has announced native ETH staking support via the Lido protocol. This allows clients to stake ETH directly within BitGo’s custody platform and mint stETH, Ethereum’s largest liquid staking token. This integration is the first time a U.S.-based qualified custodian has enabled institutional clients across Europe and Asia to easily access Ethereum staking rewards through stETH, benefiting from its market-leading liquidity and the decentralized infrastructure of the Lido protocol. Institutional interest in stETH continues to grow, driven by its ability to enhance capital efficiency and liquidity management without the lock-up periods associated with traditional staking. Over $25 billion in ETH is currently staked via the Lido protocol, representing more than 25% of all staked ETH. Its extensive integration across decentralized finance (DeFi) and centralized platforms, including lending markets, liquidity pools, OTC desks, and regulated custody platforms, makes stETH an increasingly important holding for institutional treasuries and portfolio managers. BitGo’s regulated custody solution for stETH leverages its institutional-grade custody platform, which currently safeguards over $100 billion in digital assets under custody and $48B in assets staked, globally. By enabling native staking capabilities through Lido, BitGo addresses custody and operational hurdles commonly faced by its institutional clients, offering a streamlined, regulated solution for accessing liquid staking. Institutional clients using BitGo’s custody solution can now: - **Stake ETH** directly within BitGo’s regulated custody platform to mint stETH. - **Redeem stETH** back into ETH, enhancing treasury management and liquidity flexibility. - **Deploy stETH in DeFi** for lending and collateralization, further enhancing capital efficiency and liquidity management. - **Easily monitor and report** on staking activities through BitGo’s familiar custody interface. > *"BitGo’s integration is an important milestone for institutional liquid staking. By enabling native ETH staking using Lido directly through regulated custody, BitGo unlocks the full institutional value of stETH’s deep liquidity, providing institutions with a regulated and capital-efficient pathway to manage their digital asset strategies.” -* [*Kean Gilbert*](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi)*, Head of Institutional Relations, Lido Ecosystem Foundation* This integration marks a significant step forward for institutional Ethereum adoption, offering a simpler way to participate in liquid staking, while enhancing capital efficiency and liquidity. > *“Institutions shouldn’t have to choose between security and opportunity. With our Lido integration, BitGo is delivering both—giving clients the ability to stake ETH, stay liquid with stETH, and operate at scale, all within the infrastructure they already trust.” -* [*Daniel Du*](https://www.linkedin.com/in/danieldu92/?ref=blog.lido.fi)*, Senior Product Manager, BitGo* For more details or to begin staking ETH via BitGo, contact [Lido Institutional](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi). --- ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido protocol’s open-source, liquid staking middleware by non-retail users. Lido middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, visit [lido.fi/institutional](http://lido.fi/institutional?ref=blog.lido.fi) ### **About BitGo** BitGo is the leading infrastructure provider of digital asset solutions, offering custody, wallets, staking, trading, financing and settlement out of regulated cold storage. Founded in 2013, BitGo is the first digital asset company to focus exclusively on serving institutional clients. BitGo is the world’s largest independent digital asset custodian with multiple regulated entities across the globe and over 2,000 clients across 90 countries. For more information, visit [bitgo.com](http://www.bitgo.com/?ref=blog.lido.fi). ### A Year with Simple DVT: Strengthening Ethereum Staking Through Diversity and Resilience URL: https://blog.lido.fi/a-year-with-simple-dvt-strengthening-ethereum-staking-through-diversity-and-resilience/ Last updated: 2026-07-06T10:10:55.000Z One year ago, the first Simple DVT validators went live on Ethereum mainnet, following a long process that began with [a strategic commitment by Lido DAO to support the research and development of DVT](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/QmTM4MUMyLLFpP1GWY92muTML6LcEwrnUA56uuVWzWjD4q) back in 2021\. As a part of the execution of [Lido’s Next Chapter](https://blog.lido.fi/the-next-chapter-for-lido/) roadmap to deliver a robust and diverse Ethereum validator set, following [numerous successful testnets](https://blog.lido.fi/category/node-operator/), a [proposal was passed by Lido DAO that introduced the Simple DVT Module](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0xf3ac657484444f0b54eba2c251135c47f875e3d1821496247d11bdd7fab0f291) in October 2023\. To celebrate the module’s first anniversary, let’s recap how the Simple DVT Module has grown since its inception and dive into details about how it is decentralizing the network. ## About Simple DVT The Simple DVT (SDVT) Module is the second Staking Router module, added to the Lido protocol in Q1 2024\. Integrating Distributed Validator Technology (DVT) was the fastest and most effective path to enhance Lido’s decentralization and security by scaling and diversifying the Lido Node Operator set. It also inherits the benefits of DVT, such as increased resilience, security, and infrastructure distribution. The initial mainnet pilot utilized [Obol](https://obol.org/?ref=blog.lido.fi) and [SSV Network](https://ssv.network/?ref=blog.lido.fi) DVT solutions, through which node operators work together to run validators in a cluster setup. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXf5RJbUcQSL7TvE90PJhGuuzCzl-sYzYBANvkhRlcLHg0rl9TCHUegR3u3ngmoUvzYqEfDm36W2-p4COPIFsBIqsmNw1xLIdEoOYLba2ShhTiR_NYwG7D6Ba6kTDQuoIw?key=5fQ4VISEFaluX6HpDQvJXWJo) The successful rollout of the SDVT Module contributed to the Next Chapter roadmap, presented in 2022, and continues to support the path towards decentralizing the Lido validator set—a goal reaffirmed in the GOOSE framework updates in [2024](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x0fa423280ce2bcc2596901d81322716ad440c7581658030a7d21784c2661d81c) and [2025](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0xeedef9fea3d782f192410768cabaf6974da40ef36e1d22c7f8fff5fd4cfc7a59). ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXe98Do7AREACOUpwczTLwYTaf85gYPTJL4AvONhrwt1xViMyGtc6KA7RwN9FPUov2sdSlEb42SVA5z_BHkmMC0tdcwAcbnhkFiqFrnNqpRlH6TT-kLwGu90eSpECv6knG237tZO?key=5fQ4VISEFaluX6HpDQvJXWJo) Notably, the Simple DVT Module also democratized access to run validators through Lido. For the first time since the protocol’s launch, home stakers, community staking groups, and other staking organizations—regardless of size, maturity level, jurisdictional structure, or origin country—could run validators using the largest Ethereum liquid staking protocol. To learn more about the SDVT Module, read the [previous article](https://blog.lido.fi/leveraging-distributed-validator-technology/). ## Simple DVT Today Following nine extensive testnets—four each with Obol and SSV Network and a later trial with [SafeStake](https://blog.lido.fi/exploring-distributed-validator-technology-with-safestake/)—with over 1,000 participants, the SDVT Module was successfully activated on mainnet one year ago. Today, the module consists of 82 clusters of seven participants each: 36 regular Obol Clusters, 36 regular SSV Network Clusters, and ten Super Clusters–five leveraging Obol and five SSV Network, respectively. A regular Simple DVT cluster includes a mix of Node Operators from the following groups: - Curated Module Node Operators - Advanced Node Operators (ANOs): This classification, introduced in the [original Simple DVT Module proposal](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/16?ref=blog.lido.fi#further-increases-to-validator-limits-9), refers to participants who demonstrated consistently strong performance, both qualitative and quantitative, during SDVT testnets and/or on mainnet, along with strong alignment with the broader Ethereum staking ecosystem - Community staking groups - Home stakers Super Clusters consist of ANOs and members of the Curated Node Operator set. They were designed to operate a larger number of validators and support increased capacity. The chart below illustrates the composition of Simple DVT Module participants, showcasing the diverse mix of Node Operator types that have helped enrich and diversify the Lido validator set. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXehMv3Qbakan1d5LCOqxgAuCfPl-Ra5jDEj6G08bhqwvttkCIYJht1ycKp2QBmLn9K9mlvaT5Z2HE781rOMQTQIk1OWrSCuYAeiDFUCXPq9Z3xxKOBstet3jcEjnJLK1QjAMEx1_g?key=5fQ4VISEFaluX6HpDQvJXWJo) As of June 2025, 261 SDVT operators run approximately 9,500 validators through the Lido protocol. Another 64 have just received their first deposits in the module. The appendix provides a full list of clusters and participants. Of the Simple DVT participants, 127 operators—representing 39.32%—are part of both Obol and SSV clusters. Additionally, 27.86% participate exclusively in Obol clusters, while 32.82% are involved in SSV clusters only. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXc4ioxbN6AwxHDXvxXGFo6jrEVKCSIbdaP25BUH75eI5WPVAxcTeh__8g1cqYXOgQjgu0zXh2-bmLshyyFyBrFFn_HBBSvKKAgr_VsqONAJMxxqJNHzz-fpOZebhAlgeS40Sjbt?key=5fQ4VISEFaluX6HpDQvJXWJo) Among the current SDVT Module participants, 28 are members of the Curated Node Operator set, and 36 are also part of the [Community Staking Module](https://blog.lido.fi/community-staking-module-new-era-for-solo-stakers/) (CSM). ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXc9X8DpBJDbFkI1iESlzfEcqne15CDR9jPqioZgQJ1cJrG2wp02gWfkbVbYRyJ6eT0saVQpoeaHhZBf07Qec3riPiZMR-gjJbMPBAFmm60tFIQNtGjcni767_kE9aiU6w6LDDb7TQ?key=5fQ4VISEFaluX6HpDQvJXWJo) As of June 27, 2025: | Onboarding Round | Testnet Results | \# of Clusters | \# of Active Keys Per Cluster | | ------------------- | ---------------------------------------------------------------------- | -------------- | ----------------------------- | | Obol Cohort #1 | [Link](https://blog.lido.fi/lido-on-ethereum-obol-network-testing-v2/) | 12 | 80 | | SSV Cohort #1 | [Link](https://blog.lido.fi/lido-on-ethereum-ssv-network-testing-v2/) | 12 | 80 | | Obol Cohort #2 | [Link](https://blog.lido.fi/simpledvt-obol-testnet-results/) | 14 | 80 | | Obol Super Clusters | | 5 | 500 | | SSV Super Clusters | | 5 | 500 | | SSV Cohort #2 | [Link](https://blog.lido.fi/simpledvt-ssv-testnet-results/) | 9 | 80 | | Obol Cohort #3 | [Link](https://blog.lido.fi/simple-dvt-obol-testnet-4-results/) | 10 | 80 | | SSV Cohort #3 | [Link](https://blog.lido.fi/simple-dvt-ssv-testnet-4-results/) | 15 | 5 | A total of 323 unique operators run these clusters, with almost 300 being net-new to the protocol. This represents an increase of nearly 53.8% over initial onboarding estimates for the Simple DVT Module, and a growth of over 800% compared to the original 37 members of the Curated Node Operator set. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcFvzjxvOhgsAZ91ypMIxrJwy97QWdx58twHAfGU88bpOMnlFYAnra7KdRM49NgvgpyhKYs6a7UGbRl-MUiozb6f6xclCyPGg-Db3Xpp2_n8i5FR8V79IeyQvh_0s6IKNvVLMp5Pw?key=5fQ4VISEFaluX6HpDQvJXWJo) The initially approved proposal set a cap on the SDVT Module at 0.5% of the total Lido stake, equivalent to 44.1k ETH (around 1,377 validators) at the time of the proposal. This capacity was expected to enable the onboarding of 250+ net-new Node Operators within the first six months post-launch. Three months after the successful mainnet rollout, the operational reliability of the Simple DVT Module, meaningful progress in decentralizing the Lido Node Operator set and accelerated adoption of Obol and SSV DVT implementations across the staking ecosystem led to a proposal to [increase the module’s maximum target share to 4%](https://research.lido.fi/t/proposal-expanding-the-simple-dvt-module/7549?ref=blog.lido.fi#why-the-sdvtm-should-be-expanded-2) and introduce Super Clusters. One of the most impactful advancements enabled by this increase was the rise in validator count per regular cluster, making economic participation more sustainable for Node Operators as the number of clusters scaled. Currently, Node Operators in the Simple DVT Module run 308,320 staked ETH, representing 3.39% of all Lido protocol deposits and 0.88% of the total Ethereum stake. At this time, as the SDVT module is the smallest active module with spare capacity, all new deposits are directed to Simple DVT clusters. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcAo-ERZP2lrEJUqDOc6ImKf_ABxgNDDGZZ6eS4f7pj85YtIWYbAsdcZ5oFDatIQOCmDwFYO78-6J0y6MoUzb8Hg6orXrP_QvHiLkydAIEwO9xrI8TOabj2MNlMIW5gG-jro-VB?key=5fQ4VISEFaluX6HpDQvJXWJo) The SDVT Module's aggregate performance, measured by 30-day [Rated RAVER](https://docs.rated.network/documentation/methodologies/ethereum/rated-effectiveness-rating/rated-effectiveness-rating?ref=blog.lido.fi), stands at 97.9%, outperforming the Ethereum network average of 97.3%. Over the same period, the module accumulated 607.3643 ETH in Consensus (CL) and Execution Layer (EL) rewards with 3.07% average APR. Aggregate and per-cluster performance metrics are available on [Rated](https://explorer.rated.network/o/Lido%20SimpleDVT%20Module?network=mainnet&timeWindow=30d&viewBy=operator&page=1&pageSize=15&idType=poolShare&ref=blog.lido.fi). ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXfP6UBaXU4UOUP5sVoerHuLfcs9-bhEP0xnGCqyusfAhoaWH1RawNGT5NYvlz3338dzrXU9Q92pz3EIxRJN1SUoi-f0H0v_2qYFL1k2nTG9MVG27HMwttFem7YSN9Jra5J6290m?key=5fQ4VISEFaluX6HpDQvJXWJo) ## Sculpting 'The Best Validator Set' The Simple DVT participants operate nodes from 32 different countries across North and South America, Europe, the Middle East, Asia, and Australia. While Germany and Finland continue to hold a significant share of nodes, having established themselves as reliable data centre hubs, the overall distribution reflects a growing global footprint. Participation is increasing in countries such as the United States, the United Kingdom, and France, underscoring a more diverse and decentralized operator landscape. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXeHRrtMc_zY4a9PnA1_yerk7HpkJHG_lRcPqRc2zVZaM_2aEIrCYzNrOYmw2NohWyHGOAeJHCWHnKG4i7XIC2AyrenCsvg6_z0RLk3NUvu0eLw6Wto8B4eNngyaGGR2MSAtJvv1?key=5fQ4VISEFaluX6HpDQvJXWJo) As of the end of Q1 2025, the Gini Coefficient—a measure of distribution inequality, in this case representing the number of validators per Node Operator—stood at 0.4651, reflecting a moderate concentration level. While this marks a slight increase from the end of 2024, the distribution across the 67 active clusters and 261 operators remains stable. Please refer to the [Glossary in the VANOM report](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi#:~:text=APPENDIX-,Glossary,-Consensus%20layer) to better understand the methodology behind the Gini Coefficient. As of June 25, 2025, the average number of validators per active cluster is 64.375 and 500 per Super Cluster. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXf-vLwpKtU1QYkuE1d4XHYJMapWLPsHzBYcf0o4TzvMtD4OuuRmTNpnoP9lGCgeEjl8lPY_0puyby-mkvPjSrHideGQeZv4MP9HeNmNbP4ejCp2jwcUS-ymcE1rZw3fgeIy16Hmsg?key=5fQ4VISEFaluX6HpDQvJXWJo) 56.66% of SDVT Node Operators are active in a single cluster. Meanwhile, one in five participants operates at least two clusters. Additionally, 13.93% and 9.29% of members—mainly the Curated Set members and Advanced Node Operators—contribute to three and four clusters, respectively. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcdLH9i6tKpTwVWtryClDIKkZ-O7pnNd6G2Cw6R4rEODdS2QAk5t1ohxFVMO7XZ3onIdX72dIgJWXpMZKX_tBEEvu1cm1v134MZ9Ok2p3Bwm7cV8KSGewytRQ8CuKYLkVfNu7_yhw?key=5fQ4VISEFaluX6HpDQvJXWJo) Client distribution across EL and CL clients has significantly improved following the onboarding of all eight planned cohorts. On the EL side, Nethermind remains the dominant client. However, its share declined 26.2% (-20.6 pp.)—from 78.6% at the time of the module’s launch in Q2 2024 to 58% by the end of Q1 2025\. Meanwhile, both Geth (+11.1pp.) and Besu (+7.7pp.) saw 1.6 and 2.6 times gains, respectively. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcMH3sbpX9Q2WVtpGccDh562zo7GJDBCljo_18DvjBuxqCTeaZGyELNxO01loDbCrxK_L6J520M_n6PiDM86ZxG0VQBgocU8Vbojr8UQXDW7sresc6viTIpxNw6M-pYFOpd_oH0AQ?key=5fQ4VISEFaluX6HpDQvJXWJo) Lighthouse remains the most widely used for CL clients. However, its usage declined from 77.4% among participants of Obol and SSV Cohort #1—the first cohorts onboarded to the module—to 56% following the onboarding of all cohorts, a decline of 27.6% (-21.4pp.) year-over-year. Meanwhile, newly onboarded participants mostly use Teku, Prysm, Lodestar and Prysm clients, which led to an increased share of these clients in the overall distribution, contributing to a more balanced and diversified client landscape. Also worth mentioning is that Reth appears for the first time in Q1 2025. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcEoQ_OR5RKOs9I3ndW_EOCkq7dTUiACo-JlicAhbevfjjBwsnyOL0xJnTuPJlPaVZWDD5tpobHhzrX_5cVlhy_3miCCi0sLeckSkGvEPs9Gj0Pg7akqSEDS3CjF-gPfMVFpiACRQ?key=5fQ4VISEFaluX6HpDQvJXWJo) The pie chart below illustrates the infrastructure distribution within the Simple DVT Module. Dedicated servers remain the primary choice, followed by Public Cloud and Colo, which account for 16.04% and 9.67%, respectively. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXfZ0U25UxQAtesc384PYTTizxaOF2rKMWhwPUmeQBMahRaLsJwq9LkoHFtOP2z-GHTAy4dOZXpbWKu7A8dlWSJ_cERDAJM_e2SxZWnfDUQNwnkYTVuDklRbzUoTOnGQ2tkWepg55Q?key=5fQ4VISEFaluX6HpDQvJXWJo) Compared to the Curated Set, the higher usage of home nodes in the SDVT Module highlights the increased participation of home stakers and community staking groups, demonstrating that the goal of bringing more independent participants into the Lido protocol has moved from declared intention to reality. These developments reflect more than just infrastructure improvements, client diversity, and geographical distribution—they signal meaningful progress toward a more open, inclusive, and resilient Ethereum staking ecosystem. The Simple DVT Module has simplified access to Ethereum validation for a wider range of participants and enabled them to take an active role in securing Ethereum through the Lido protocol. This evolution marks a step forward not only in decentralization but also in accessibility and operator diversity, laying the groundwork for a validator set that truly reflects the global and permissionless nature of the network. ## Moving Forward The onboarding process for the Simple DVT Module—which began in Q4 2023 with both SSV and Obol testnets, followed by five onboarding rounds for each—has now concluded. The remarkable progress achieved would not have been possible without the incredible support of the broader community, the thoughtful input of both advocates and critics, the dedication of testnet participants and mainnet Node Operators, and the continued collaboration with the Obol and SSV Network teams. While the ultimate goal of this module is to pave the way for scalable, permissionless DVT-based modules that enhance decentralization, accessibility, and censorship resistance in Ethereum staking, it was never intended to operate indefinitely. As a foundational step, the Simple DVT Module has achieved greater resilience and expanded the Node Operator set within the Lido protocol. In line with the original proposal, it is expected to be wound down within three years. By that time, more scalable and permissionless modules—one example is the Community Staking Module (CSM), which transitioned to a permissionless model earlier this year—are anticipated to take its place. ## Simple DVT Operators on Mainnet **Obol Cohort #1 Participants** - Lido x Obol: Azure Albatross cluster: SenseiNode, UniqNodes, CVJoint, Tessier-Hashpool Ltd., Node3.Tech, Sub7 Security, Spectrum Staking - Lido x Obol: Bountiful Bison cluster: DSRV, 01node, jayjay, OranG3cluB, starnodes, Validation Cloud, Pacobits - Lido x Obol: Covert Cougar cluster: Ebunker, Everlasting, Pier Two, DVStakersSpacesider, goooodnes, ContributionDAO, Nansen - Lido x Obol: Dazzling Duck cluster: A41, Blockblaz, Cosmostation, dimsome, Nodeinfra, Lavender.Five Nodes, Forbole - Lido x Obol: Enigmatic Elkcluster: RockawayX Infra, katesizova, Swiss Staking, Imperator.co, Yutu, Colinka | BeeHive, B62Node - Lido x Obol: Frolicsome Frog cluster: RockLogic GmbH, Mav3rick (BeeHive), H2O Nodes GmbH, natalia3647, TrustedAdvizer, kobya4evo, iicc1 - Lido x Obol: Genteel Giraffe cluster: Blockscape, F5 Nodes, Finoa Consensus Services, Raccoon Nodes, Range, Weaitonamazerid, archimedes0159 - Lido x Obol: Harmonious Hawk cluster: P2P.org, Chainode Tech, Deutsche Telekom, DragonStake SL, hukutu4 (BeeHive), vin4ik (Cryptology), goldstream777 - Lido x Obol: Ingenious Ibis cluster: Staking Facilities, mahof, Chainbase Technology Holdings Pte. Ltd, superjax, Di-nodes, wallclimbr, yura\_zp - Lido x Obol: Jubilant Jackrabbit cluster: Allnodes, Chainnodes, Serenita, Republic Crypto | Runtime, Thenop.io, alkadeta, knightsemplar - Lido x Obol: Knightly Kinkajou cluster: ChainLayer, Staking4All, Liquify LTD, Nodes.Guru, Steaking Frens, LIVE.NODE, farukyasar - Lido x Obol: Lustrous Leopard cluster: Everstake, GlobalStake, Polkachu, Dappnode, Bware Labs, Coinstamp, irina#7966 **SSV Cohort #1 Participants** - Lido x SSV: Agile Antelope cluster: ParaFi Technologies LLC, Spire Blockchain, Hayhouse Projects, Stardust Staking, GBeast, DCG Labs, Michael - Lido x SSV: Blissful Bear cluster: Kiln, Cryptonative Systems, Blockshard, Avaunt Staking, Colossus, Thunderhead, Luciola - Lido x SSV: Curious Coyote cluster: Gateway.FM AS, swiftstaking, Piconbello, Epoch Forge, MIDL.dev, TytyNode, smartinvest.eth - Lido x SSV: Delightful Dolphin cluster: Sigma Prime, BlockVision, LinkRiver, Pier Two, DVStakersSpacesider, IONode Online, XHash - Lido x SSV: Ethereal Elephant cluster: Nethermind, antotg, Matrixed.Link, \[NODERS\]TEAM, STAKR.space, kxinon, nodeADDICT - Lido x SSV: Flirtatious Flamingo cluster: HashKey Cloud, Girnaar Nodes, Sam | Stakesaurus, ChainUp, Liquify LTD, POSTHUMAN validator, Luganodes - Lido x SSV: Graceful Gazelle cluster: Galaxy Digital, Validation Cloud, mattstam, Astro-Stakers, kjnodes, Tessier-Hashpool, Ellipfra - Lido x SSV: Humble Hummingbird cluster: Stakin OÜ, 0xFury, Meria, Orion, 🅰🅻🅴🆇ⒾⓉ, Zim, Vladcrypto - Lido x SSV: Intrepid Impala cluster: Launchnodes, Lavender.Five Nodes, Girnaar Nodes, Blockblaz, htx-pool, OKX, IONode Online - Lido x SSV: Joyful Jaguar cluster: Kukis Global, Lev, 2xStake, Anvil Finance, LiveRaveN, Openbitlab, Moonlet - Lido x SSV: Keen Koala cluster: Stakely, Neuler, KysenPool, B62Node, ipetkov.eth, Lightning Strike, RomanK - Lido x SSV: Lively Lynx cluster: Simply Staking, Enigma, stakelab.zone, VARL, Infer, BlockPI Network, ShardLabs **Obol Cohort #2 Participants** - Lido x Obol: Majestic Moose cluster: Galaxy Digital, snc.xyz (SNC Holding B.V.), LinkPool, nodeskuge, Highnok, PowerStaking, Pacobits - Lido x Obol: Nurturing Narwhal cluster: Stakin OÜ, Luganodes, Anonstake, spacex, Snode, PhiNodes, Nokey - Lido x Obol: Observant Octopus cluster: Stakely, Valakas, Piconbello, Node Guardians, SECARD, sodiumstar, VanGogh - Lido x Obol: Prancing Peacock cluster: Simply Staking, Blockpower, Eridian, tRDM | Nodera, minivipers, Infinite Lux Staking, TdrSys - Lido x Obol: Quixotic Quail cluster: Kukis Global, Finoa Consensus Services, Republic Crypto | Runtime, HellmanResearch, Applepai, lcofjurn, Konstantin#1194 - Lido x Obol: Radiant Raccoon cluster: Nethermind, Chainnodes, Validation Cloud, DMITRY | SCANDALIST, D-stake, sellursoulcryptology, storchec - Lido x Obol: Serendipitous Shark cluster: InfStones, Node3.Tech, CVJoint, anvel, daniilkir, Igor, val4n17 - Lido x Obol: Tranquil Turtle cluster: Launchnodes, Chainode Tech, H2O Nodes GmbH, Conqueror, CryptoZab, P-OPS Team, PMnodes - Lido x Obol: Unfettered Urial cluster: HashKey Cloud, Serenita, 01node, amarkelov, andersen007, natalia\_256, Lefey - Lido x Obol: Vivacious Viper cluster: RockX, Deutsche Telekom, Staking4All, 1to, Anonstake, deNodes, dgnatiuk - Lido x Obol: Whistling Wolf cluster: Simply Staking, StakingCabin, Pier Two, 🅰🅻🅴🆇ⒾⓉ, Crouton Digital, MGTeam, vladislav7137 - Lido x Obol: Xeric Xiphosuran cluster: Stakin OÜ, Luganodes, Imperator.co, ChainOps, kvqd777, maxim\_101, svetlana1969 - Lido x Obol: Yielding Yellowthroat cluster: Nethermind, Liquify LTD, snc.xyz (SNC Holding B.V.), Avdonin#9592 (web3dao), narko2t1, kobzar3830, testovich - Lido x Obol: Zephyr Zorilla cluster: HashKey Cloud, KingSuper, P-OPS Team, voinovbohdan (Cryptology), lesya, stellar\_the\_one, wtoroy (tesla) **Obol Super Clusters’ Participants** - Lido x Obol: Arctic Amarok cluster: Cosmostation, Ebunker, HashKey Cloud, Blockblaz, Nodeinfra, Forbole, StakeWithUs - Lido x Obol: Bold Banshee cluster: SenseiNode, StakeCat, Tessier-Hashpool, Node3.Tech, Everlasting, Node Guardians, Liquify LTD - Lido x Obol: Cunning Chimera cluster: DSRV, Finoa Consensus Services, Luganodes, Chainode Tech, Bware Labs, Swiss Staking, Simply Staking - Lido x Obol: Divine Dragon cluster: Nethermind, RockLogic GmbH, Chainnodes, Validation Cloud, Republic Crypto | Runtime, Nodes.Guru, Colinka | BeeHive - Lido x Obol: Ethereal Elf cluster: P2P.org, Stakely, Deutsche Telekom, snc.xyz (SNC Holding B.V.), 01node, Imperator.co, Mav3rick (BeeHive) **SSV Super Clusters’ Participants** - Lido x SSV: Arid Anubis cluster: Stakin OÜ, Kiln, ShardLabs, StakingCabin, Encapsulate, swiftstaking, Eridian - Lido x SSV: Blazing Basilisk cluster: Pier Two, Sigma Prime, Rockx, DVStakersSpacesider, ChainUp, LinkRiver, BlockVision - Lido x SSV: Celestial Cyclops cluster: Cryptonative Systems, Chainlayer, H2O Nodes, Blockshard, Piconbello, DragonStake.io, Staking4All - Lido x SSV: Dreamy Draugr cluster: Blockscape, Launchnodes, Serenita, Matrixed.Link, ipetkov.eth, LinkPool, Kukis Global - Lido x SSV: Enigmatic Ent cluster: ParaFi Technologies LLC, Astro-Stakers, Ellipfra, Polkachu, Foundry, Spire Blockchain, Stardust Staking **SSV Cohort #2 Participants** - Lido x SSV: Mysterious Manta cluster: A41, Blockblaz, Nodeinfra, Encapsulate.xyz, Chainbase Technology Holdings Pte. Ltd, Ebunker, HellmanResearch - Lido x SSV: Noble Newt cluster: RockX, Node Guardians, D-Stake, Nodes.Guru, Crouton Digital, snc.xyz (SNC Holding B.V.), PhiNodes - Lido x SSV: Optimistic Orca cluster: Chainlayer, Spectrum Staking, H2O Nodes, jayjay, Staking4All, Dappnode, gavryushev - Lido x SSV: Playful Penguin cluster: RockawayX Infra, P2P.org, Republic Crypto, starnodes, hukutu4.eth | BeeHive, Anonstake, Cosmostation - Lido x SSV: Quiet Quetzal cluster: SenseiNode, Tessier-Hashpool, CVJoint, Node Guardians, Protofire, Node3.tech, keklodoq - Lido x SSV: Resilient Rabbit cluster: DSRV, Allnodes, 01node, Birkoff, Forbole, LinkPool, Chainnodes - Lido x SSV: Splendid Swan cluster: Everstake, StakingCabin, Pacobits, Republic Crypto, Serenita, Colinka | BeeHive, Chainode Tech - Lido x SSV: Thoughtful Tiger cluster: RockLogic GmbH, Eridian, Mav3rick|BeeHive, iicc, Blockpower, DragonStake.io, Polkachu - Lido x SSV: Unique Unicorn cluster: InfStones, blockscape, tRDM | Nodera, Deutsche Telekom MMS, Swiss Staking, Coinstamp, Nansen **Obol Cohort #3 Participants** - Lido x Obol: Audacious Aardvark cluster: Infinity Stones Inc (DBA InfStones), Hayhouse Projects, Enti, Axol.io, GBeast, Chuy Garcia, Astro-Stakers - Lido x Obol: Brave Bison cluster: Kiln, swiftstaking, antotg, bountyblok, ipetkov.eth, Stake Village (semalist), Orion - Lido x Obol: Clever Chameleon cluster: A41, ChainUp, Girnaar Nodes, Tané, TWM, breskulpeak.com, Lavender.Five Nodes - Lido x Obol: Dynamic Dragonfly cluster: Galaxy Digital, LinkRiver, Kingnodes, Jon | AussieStake, DxPool, Sam (Stakesaurus), Benedict Chan - Lido x Obol: Elegant Eagle cluster: Everstake, GLCstaked, ShardLabs, P-OPS Team, Thoma Technologies LLC, nodeADDICT, Professor Parpinsons - Lido x Obol: Fierce Falcon cluster: RockawayX Infra, CertHum, Enigma, Yspud, Phuc Vu, smc, SnakePliskin - Lido x Obol: Gallant Gecko cluster: Staking Facilities, StakeLab.zone, CryptoCrew Validators, ITRocket, kxinon, Nodexplus, Igor - Lido x Obol: Heroic Hyena cluster: Allnodes, Syncnode, Blockshard, Openbitlab, 0xFury, CryptoBoru, pWse - Lido x Obol: Jubilant Jackal cluster: Kiln, StakeCat, Matrixed.Link, AutoStake, Jerod, \[NODERS\], Gavryushev - Lido x Obol: Loyal Lark cluster: Kukis Global, Stardust Staking, 2xStake, alikhalili3486, Verre, NakoTurk, 5quat **SSV Cohort #3 Participants** - Lido x SSV: Vibrant Viperfish cluster: ParaFi, Artifact Systems, Stake Village, Stake DxPool, Stefan, pipsqueecs, DenverParaFlyer - Lido x SSV: Witty Wallaby cluster: DCG Labs, Block Farms, ProofGroup, atomicwhale, 0NEinfra, Albinos, zdec6kit - Lido x SSV: Xenial Xoloitzcuintli cluster: SenseiNode, enti, AXBLOX, Fiews, rs3der, lux8.net, Shadon - Lido x SSV: Youthful Yellowtail cluster: Sigma Prime, p10node, Kingnodes, AussieStake, Ben Chan, rick, Uwium - Lido x SSV: Zippy Zorilla cluster: Tané, ContributionDAO, Next Finance Tech, TWM, Khanhwizardpa | p10node, rylos, kongheyfatchoy - Lido x SSV: Agile Aye-Aye cluster: RockLogic GmbH, CertHum, Ethernodes, ThomasBlock.io, 2xStake, igorzp60, CryptoBoru - Lido x SSV: Brave Binturong cluster: stakefish, bountyblok, GRASSETS TECH, Amamu, StakeValid, ethdog, vinsystems - Lido x SSV: Cheerful Cockatoo cluster: stakefish, Sub7 Security, Swyke, khanami.eth, Viacheslav Smirnov, Professor Parpinsons, chainwizard94 - Lido x SSV: Dashing Dingo cluster: blockscape, Provalidator, NodeSoda, starArsonist, Mach5 Validators, efa1994, hereWeGo - Lido x SSV: Elegant Eel cluster: Chainlayer, Syncnode, Nodes International, Mrs\_ml, minibella333, 5quat, tommylowe90 - Lido x SSV: Fearless Firefly cluster: RockawayX, Imperator.co, glcstaked, TXTiger, KudasaiJP, flisko, cgero.eth - Lido x SSV: Gentle Gurnard cluster: Stakely, Thoma Technologies LLC, DeeNode, ShalomGH, Daniil, crimson1, BlockNth - Lido x SSV: Honest Hoopoe cluster: Pier Two, StakeCat, Chuy, NORTHSTAKE, 79anvi, CrisOG, baoquoc1998 - Lido x SSV: Insightful Ibex cluster: Openbitlab, RHINO, Blockops Network, SyncX, Igor, Maksim, humpyy.eth - Lido x SSV: Jubilant Jackdaw cluster: DSRV, CryptoCrew Validators, ChainLabo, Monika, leadparachutes, zheli, jeffjack ### Maple Expands Institutional Stablecoin Lending with stETH URL: https://blog.lido.fi/maple-expands-institutional-stablecoin-lending-with-steth/ Last updated: 2025-06-12T13:19:02.000Z [Maple Finance](https://maple.finance/?ref=blog.lido.fi), the leading on-chain asset manager, has added support for stETH, the leading Ethereum liquid staking token issued via the Lido protocol, enabling institutional stablecoin lending. This addition enhances the institutional utility of stETH and further solidifies its role within the Ethereum ecosystem. By enabling institutions to borrow stablecoins against stETH holdings, Maple provides access to liquidity without requiring institutions to exit their liquid staking positions. Institutions can maintain exposure to liquid staking rewards while efficiently addressing liquidity needs for treasury management, operational working capital, or other strategic financial activities. This support underscores the growing composability and strategic relevance of liquid staking tokens, like stETH, within institutional financial operations. It also reflects a broader trend of traditional and crypto-native institutions adopting DeFi solutions to optimize balance sheets and capital efficiency. Kean Gilbert, Head of Institutional Relations at Lido Ecosystem Foundation, commented: “Maple’s support for stETH provides a valuable liquidity solution, directly addressing institutional need for flexible and efficient DeFi strategies. It highlights the practical role liquid staking tokens play in modern treasury management.” ### **About Lido Institutional** Lido Institutional champions the adoption of Lido protocol’s open-source liquid staking middleware among non-retail users. By facilitating connections between institutions and node operators, the Lido protocol streamlines the staking process, enabling reward generation without the operational complexities of managing validator hardware. Explore further at [lido.fi/institutional](https://lido.fi/institutional?ref=blog.lido.fi). ### Dual Governance 101: Explainer URL: https://blog.lido.fi/dual-governance-101-explainer/ Last updated: 2026-05-06T12:38:36.000Z ### **Introducing Dual Governance: Giving stETH Holders a Voice** There is an inherent tension in DAO-run systems: those who shape the protocol’s design are not necessarily those who **s**houlder the outcomes firsthand. The DAO holds upgrade rights, while stETH holders bear the execution risk. Because upgrades are inevitable as Ethereum evolves, this tension only grows. Dual Governance addresses these concerns by enabling stETH holders to express discontent and exit the protocol if confronted with controversial LDO-governance decisions. At its core, Dual Governance represents **a dynamic timelock**: the more exit signals stETH holders submit, the longer LDO-governance motions are delayed. This achieves two aims at once: 1. Makes contention visible and measurable. 2. Gives stakers the option to exit safely, avoiding unfavorable protocol changes. Here is how it works, why it matters, and the key parameters that make it effective. ## **The Core Idea: The Right to Exit & Balanced Power** 1. **Right to Exit Safely:** stETH holders can withdraw their stake if they oppose governance decisions, preventing forced changes to their crypto-assets. 2. **Balance of Interests:** No single group (LDO holders, node operators, or stakers) can unilaterally push harmful changes on stakers. Each has a voice, and strong disagreements trigger a built-in pause for negotiation or exit. ## **Why It’s Needed: The Risk of Governance Attack** Ethereum’s validator-exit queue can delay withdrawals for weeks or months during congestion. In that window, a hostile majority of LDO tokens could **force smart-contract upgrades, eject node operators, or reassign user-withdrawal addresses.** Dual Governance mitigates such extreme scenarios by allowing stETH holders to voice disagreement and by blocking protocol governance for the time needed to exit. This makes large-scale takeovers **costly and impractical**, enhancing the protection of Lido participants and, indirectly, Ethereum itself. ## **How Dual Governance Works** Dual Governance adds a “sentiment gauge” that lets stETH holders delay LDO-governance execution when opposition rises. Ultimately, the contention is either mediated or—if an active governance attack targets protocol users—stakes can be withdrawn safely through the **rage-quit** gate. The more stETH that signals disagreement, the longer the execution delay. Once opposition reaches a major threshold (10 % of TVL), governance cannot execute any change until the opposing stakers withdraw their tokens. ## **Key Scenarios: When Dual Governance Matters** ### **Scenario 1: Voicing Opposition and De-escalation** - LDO holders propose removing a node operator, unaware of critical reasons to keep them. - stETH holders signal a veto, triggering a temporary pause. - LDO holders reconsider and cancel the proposal. - Governance continues as usual without harming user trust. ### **Scenario 2: Reacting to Takeover—Guaranteed Exit** - A large LDO-holding entity proposes a smart-contract change that jeopardizes user tokens. - Enough stETH holders lock tokens in the veto-signalling contract, delaying execution. - stETH holders exit if LDO holders refuse to cancel. - After withdrawals complete—or the proposal is canceled and stETH holders have unlocked their tokens—governance resumes. ## Dual Governance Design Dual Governance inserts a timelock between Lido-DAO decisions and execution. It is linked to an escrow where stETH holders can signal intent to exit by locking stETH, wstETH, or withdrawal NFTs. Once deposits cross the **first-seal** threshold (1 % of Lido-on-Ethereum TVL), the timelock starts to grow. Reaching the **second seal** (10 % of TVL) triggers **rage quit**—execution is fully blocked until all locked stake is withdrawn to ETH. ![](https://blog.lido.fi/content/images/2025/06/Screenshot-2025-03-04-at-11.54.32.png) All contracts have undergone **multiple independent audits**, ensuring the code meets **the highest security standards**. The system has undergone third-party design reviews from [**Certora**](https://www.notion.so/190bf633d0c980c7ab93f93a68b21745?pvs=21&ref=blog.lido.fi) and [**Runtime Verification**](#). Audit reports are available from [**Certora**](https://github.com/lidofinance/audits?tab=readme-ov-file&ref=blog.lido.fi#02-2025-certora-dual-governance-audit), [**Statemind**](https://github.com/lidofinance/audits?tab=readme-ov-file&ref=blog.lido.fi#10-2024-statemind-dual-governance-audit), [**OpenZeppelin**](https://github.com/lidofinance/audits?tab=readme-ov-file&ref=blog.lido.fi#11-2024-openzeppelin-dual-governance-audit), and [**Runtime Verification**](https://github.com/lidofinance/audits?tab=readme-ov-file&ref=blog.lido.fi#02-2025-runtime-verification-dual-governance-formal-verification). All proposed parameters were tested by two independent teams: [**game-theoretic research**](https://github.com/20squares/dual-governance-public?ref=blog.lido.fi) by [**20squares**](https://20squares.xyz/?ref=blog.lido.fi) and [**agent-based modeling**](https://github.com/collectif-dao/dg-research/blob/main/Lido%20Dual%20Governance%20Simulation%20Report.pdf?ref=blog.lido.fi) by CollectifDAO. ## **Proposal Lifecycle** When the DAO (i.e., LDO holders) supports a proposal—such as upgrading a smart contract or adding a node operator—it does **not** execute immediately. Instead, it enters a four-day waiting period. During this time, stETH holders can trigger **Veto Signaling** by locking tokens. If triggered, a dynamic timelock replaces the standard delay, extending the waiting period according to the amount of stETH committed (from five extra days at 1 % to a maximum of 45 days at 10 %). During this period: - The DAO can still **cancel** pending proposals if contention is visible. - stETH holders may escalate by locking more stETH, further extending the timelock or eventually triggering a **rage quit**. Once the timelock expires, the proposal can be **executed**, allowing on-chain changes to take effect. ![](https://blog.lido.fi/content/images/2025/06/image.png) ## **Governance States** Dual Governance follows a **state-machine** model, each state imposing specific rules: 1. **Normal:** Default state; proposals spend four days pending, then can be executed. 2. **Veto Signaling:** Triggered when 1 % of stETH supply is escrowed in opposition. The proposal is **paused under a dynamic timelock**, which expands from five to 45 days proportional to stETH opposition. 3. **Rage Quit:** If 10 % of stETH remains locked until the timelock ends, stakers exit. No new proposals can execute until withdrawals finish, shielding users from the contested motion. 4. **Veto-Signaling Deactivation** and **Veto Cooldown:** Technical sub-states that resolve edge cases; only pending proposals may execute during Veto Cooldown. ![](https://blog.lido.fi/content/images/2025/06/image--1-.png) ## **The Role of Committees: Fine-Tuning Governance Resilience** Dual Governance introduces three new committees that cover different areas: ### **1\. Reseal Committee** A safety net that extends the withdrawal pause triggered by GateSeal. - **GateSeal:** Pauses withdrawals for 11 days if a critical issue is detected. - **Reseal:** Extends GateSeal’s pause when Veto Signaling is active, giving the DAO more time to act. ### **2\. Tiebreaker Committee** A last-resort measure for unlikely stalemates. - Can force execution of stuck proposals or unseal withdrawal contracts. - Activates only after long-term governance paralysis. **Structure:** A “multisig of multisigs” comprising three subcommittees: - **Ethereum Ecosystem** (3/5 quorum) - **Builders** (3/5 quorum) - **Node Operators** (5/7 quorum) At least **two of the three** subcommittees must reach quorum. All members are external to avoid conflicts of interest. ### **3\. Emergency Committee** **Purpose:** Safety mechanism for the first year after deployment. - Can **pause Dual Governance**, halt permissionless execution, and temporarily restore LDO-token governance. - May execute proposals while DG is disabled to restore stability. **Composition** - **Activation multisig (4/7):** May trigger emergency mode once, within a limited window. - **Execution multisig (5/7):** Temporarily controls governance logic to fix or revert. Designed as a one-off failsafe, not a standing power. ![](https://blog.lido.fi/content/images/2025/06/image--2-.png) ## **Conclusion: Solid governance model for Liquid Staking on Ethereum** One of the key properties of DeFi is the user's right to exit, and Dual Governance implements it for Lido on Ethereum. While catering to Ethereum staking mechanics requires an intricate design, the resulting mechanism aims for resilience, mitigating even theoretical edge cases. The very release of Dual Governance shifts the game theory around the protocol's upgrade levers, mitigating heavy risk vectors without ever being triggered. While it won't prevent **every potential governance risk**, it makes **large-scale attacks impractical** and **rebalances power toward those with the most at stake**. ### Lido Validator and Node Operator Metrics: Q1 2025 URL: https://blog.lido.fi/lido-validator-node-operator-metrics-q1-2025/ Last updated: 2025-05-29T00:47:45.000Z ## **Key Highlights** - Addition of Community Staking Module (CSM), featuring data on basic stats, client diversity, and infrastructure setup. - Addition of basic cross-module participation across Curated, CSM, and Simple DVT operator sets. - Overview of how different Distributed Validator Technology (DVT) providers are used in staking modules. Check the full Q1 2025 VaNOM report via the [link](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi). ## **Introducing the Community Staking Module** In October 2024, the Lido protocol celebrated a major milestone with the launch of the [Community Staking Module](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) (CSM), kicking off with an Early Adoption phase. Designed to enable permissionless entry for Node Operators, CSM empowers homestakers and smaller operators to join Ethereum validation — significantly lowering both capital and technical barriers compared to traditional solo staking. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXe8_kg9ZV93k_cZ1x_T_HP_q8e8vUnl0c-KR6neoBFLpSs_8-gahDEC8iK3HGsVAnFxQeJEYZyIJ4j6fNDSHEvhFAjKhf5zEK_clA-cR3sgL001pC-3iP9vAPZ8c5ZlldP5qSHW5g?key=6Xs-tdV0Ffz16WL21rV37Sib) ![](https://blog.lido.fi/content/images/2025/05/image_2025-05-29_00-45-31.png) In February 2025, CSM became fully permissionless. From its launch through the end of Q1 2025, it attracted 312 operators, collectively running 5,857 validators and representing approximately 2.09% of stake share. Insights about how these stakers run their setups is gathered via an opt-in survey accessed directly via CSM UI on [csm.lido.fi](https://csm.lido.fi/?ref=blog.lido.fi). Survey results reveal a diverse mix of execution and consensus client combinations, a variety of installation tools in use, and a wide range of server setups, from home nodes to cloud-based infrastructure. ## **Cross-Module Operator Participation:** One particularly interesting metric to highlight this quarter is operator participation across different modules (added in 2024/Q4). Each module within the Lido protocol has unique characteristics that attract and accommodate distinct types of Node Operators. The Curated Module, a reputation-based set, is designed for operators who meet the highest standards. Criteria such as business continuity, security practices (including key generation, management, and custody), infrastructure setup, software stack diversity (including client choice), and geographic distribution and regulatory posture are all carefully evaluated to ensure a balanced and resilient validator set. In the Simple DVT (SDVT) Module, validator clusters are operated by participants in a 5-of-7 threshold, meaning uptime expectations for individual operators are slightly lower than in the Curated Module. However, the nature of SDVT introduces technical complexity, requiring participants to understand DKG coordination, manage shared key infrastructure, and engage in high levels of collaboration within validator clusters. The CSM, as discussed earlier, is fully permissionless — welcoming anyone with the technical ability and intent to contribute to Ethereum validation. It lowers the 32 ETH entry barrier to 2.4 ETH for the first validator and 1.3 ETH for each additional one, while contributing to the decentralization of the validator set. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXd4fxWu5HHA9nt8JRhOSuiSDt2cQt40uz3TSJBM_SO0nk5UztVf0IN6nLzYmYHvLvs7c2PkgeSwd-NSq2Wu0yUrIgcOdX2CPRlNaIf2Y6ddJaJZwBEoJh9hSO7_Iq1iTjbE7j94?key=6Xs-tdV0Ffz16WL21rV37Sib) Understanding cross-module participation helps shed light on the composition and dynamics of the Lido operator set. In combination with an awareness of risk profiles across modules, it becomes a useful tool to evaluate how the validator set can continue to diversify and strengthen over time. **Please note:** the metrics presented are based on a combination of sources, including self-identification, voluntary survey responses, and on-chain data. Since CSM is permissionless, some degree of Sybil presence may be present in the data. ## **Distributed Validator Technology Utilization** This quarter’s update includes a breakdown of DVT provider usage across staking modules, offering a closer look at how Lido operators are adopting different coordination frameworks. In the SDVT module, 3,974 validators run using Obol and 2,991 using SSV, supported by 218 and 143 operators, respectively. Notably, CSM is also seeing active DVT adoption — a total 15% of CSM operators responded utilize DVT to run their validators. SSV leads within CSM, securing 1,216 validators run by 28 operators, followed by Obol with 44 validators and 10 operators, and SafeStake with 8 validators across 4 operators. This growing diversity in DVT infrastructure implementations reflects the ecosystem’s steady progression toward greater resiliency, modularity, and collaborative validation setups — key ingredients in a more decentralized and robust staking landscape. ## **Looking Ahead** The months ahead bring meaningful changes across the staking landscape, with [Ethereum’s Pectra upgrade introducing triggerable withdrawals and support for 0x02 validators](https://blog.lido.fi/lidos-roadmap-to-pectra-navigating-complexity/), and protocol-level developments like [Lido V3](https://blog.lido.fi/lido-v3-ethereum-staking-infrastructure/) and the [proposed SSVLM module](https://research.lido.fi/t/ssv-lido-module-ssvlm-proposal/9630?ref=blog.lido.fi) laying the groundwork for more flexible and diverse participation. These shifts will further shape how operators engage with the protocol and how staking evolves over time. As always, DAO commitment is to transparency and continuous iteration. We’ll continue to evolve our metrics, dashboards, and governance processes to reflect this growing complexity. Stay tuned for our next update — and in the meantime, explore the [Lido Node Operator Portal](https://operatorportal.lido.fi/?ref=blog.lido.fi) and join the Node Operator Community Calls [here](https://www.youtube.com/playlist?list=PLhvXP1-8VKZQnuhrHrBBe5asNIoBSJkDv&ref=blog.lido.fi). ### Komainu Supports stETH Enabling Institutional Access to Ethereum Liquid Staking URL: https://blog.lido.fi/komainu-supports-steth-enabling-institutional-access-to-ethereum-liquid-staking/ Last updated: 2025-05-27T13:39:21.000Z [Komainu](https://komainu.com/?ref=blog.lido.fi), a premier regulated digital asset custodian supported by Laser Digital and Blockstream, has introduced custody support for staked ETH (stETH), the leading liquid staking token within the Ethereum ecosystem. This development marks a significant milestone, offering institutional stakers a more secure, and efficient pathway to participate in Ethereum’s staking infrastructure - a sector experiencing rapid growth and increasing relevance in institutional finance. ## **The Role of Lido’s stETH in Ethereum’s Ecosystem** [Staked ETH (stETH)](https://lido.fi/?ref=blog.lido.fi), issued through the Lido protocol, is a pivotal innovation in Ethereum’s proof-of-stake framework. Representing approximately 27% of all staked ETH, with a market capitalization surpassing $23 billion, stETH has emerged as the preeminent liquid staking token. Unlike conventional staking, which immobilizes assets for extended periods, stETH provides a dual benefit: it enables stakers to accrue staking rewards while retaining the flexibility to trade, collateralize, or deploy their tokens across third-party applications, including both centralized and decentralized finance (DeFi) protocols. This liquidity has positioned stETH as a vital instrument for optimizing rewards within the Ethereum network, which now secures over $100 billion in staked cryptoassets following its transition to proof-of-stake in 2022. ## **Komainu’s Robust Custodial Framework** [Komainu](https://komainu.com/?ref=blog.lido.fi) distinguishes itself through a [custody solution](https://komainu.com/services/custody?ref=blog.lido.fi) meticulously engineered to meet institutional demands. Client assets, including stETH, are safeguarded in segregated, on-chain verifiable wallets, underpinned by advanced security protocols that adhere to the highest industry standards. Importantly, Komainu maintains a strict policy against asset reuse or rehypothecation, ensuring client holdings remain fully allocated and protected. By abstaining from staking services or validator operations, Komainu provides a transparent and robust custody offering—attributes that resonate strongly with institutional stakers prioritizing safety operational integrity. **Sebastian Widmann, General Manager Komainu MEA, said:** *“* *With institutions increasing their exposure to crypto-native primitives, it becomes ever more important to enable them to access the digital asset market without compromising on compliance, operational security and transparency. This integration is a significant step in supporting the institutionalization of digital assets by allowing our clients to gain exposure to staking rewards directly and through liquid staked tokens, like stETH.”* **Kean Gilbert, Head of Institutional Relations at the Lido Ecosystem Foundation, commented:** *“Komainu’s custody integration helps institutions incorporate stETH into their portfolios more easily. It directly addresses operational considerations we've consistently heard institutions raise around custody and staking tokens.”* ## **Strategic Capabilities via Komainu Connect** Further enhancing its offering, Komainu Connect will soon enable clients to make use of stETH as collateral for off-exchange settlement or financing arrangements, all while preserving full custodial oversight. This functionality will equip treasury managers and trading desks with the tools to maximize efficiency, get staking rewards, and simultaneously integrate stETH into sophisticated institutional workflows. Such capabilities underscore Komainu’s commitment to bridging the gap between crypto-native opportunities and the operational frameworks of institutional finance. --- ## **About Komainu** Headquartered in Jersey, with additional offices in London, Dubai, and Singapore, Komainu is a regulated digital asset custodian renowned for its fusion of traditional financial expertise and state-of-the-art security practices. Supported by Laser Digital and Blockstream, Komainu delivers a comprehensive suite of services, including multi-asset custody, governance, and financing solutions. For more details, visit [www.komainu.com](http://www.komainu.com/?ref=blog.lido.fi). - Komainu (Jersey) Limited is regulated by the Jersey Financial Services Commission. - Komainu MEA FZE is regulated by the Dubai Virtual Assets Regulatory Authority. - Komainu (UK) Limited is registered with the UK Financial Conduct Authority. - Komainu Europe S.r.l. has an OAM registration in Italy. ### **About Lido Institutional** Lido Institutional champions the adoption of Lido protocol’s open-source liquid staking middleware among non-retail users. By facilitating connections between institutions and node operators, the Lido protocol streamlines the staking process, enabling reward generation without the operational complexities of managing validator hardware. Explore further at[ lido.fi/institutional](https://lido.fi/institutional?ref=blog.lido.fi). ### Advancing Ethereum Block Proposals with Lido: A Simple Guide to Auxiliary Proposer Mechanisms (APMs) URL: https://blog.lido.fi/advancing-ethereum-block-proposals-with-lido-a-simple-guide-to-auxiliary-proposer-mechanisms-apms/ Last updated: 2025-05-19T09:49:41.000Z Ethereum is constantly evolving. As new upgrades and ideas roll out—like Proposer-Builder Separation (PBS) and preconfirmations—the ecosystem becomes more powerful, but also more complex. For Node Operators and staking platforms like **Lido**, staying ahead means adapting to these changes without compromising decentralization, efficiency, or rewards. That’s where **Auxiliary Proposer Mechanisms (APMs)** come in. Let’s break down what they are, why they matter, and how Lido is introducing them responsibly. ### **What Are APMs?** **Auxiliary Proposer Mechanisms** are a proposed framework that helps Lido safely explore and adopt new tools related to block creation on Ethereum. These tools are part of Ethereum’s evolving architecture, especially around how blocks are built and transactions confirmed. Think of APMs as a structured approach to testing innovations like: - **PBS (Proposer-Builder Separation)** – Separates the role of proposing blocks and building them - **Preconfirmations** – Offers quicker assurance that a transaction will be included - **Advanced block markets** – Creates new competitive dynamics for maximizing block rewards By carefully evaluating these mechanisms, Lido ensures that Node Operators and stakers benefit from increased profit and specialization without introducing unnecessary risks. ### **Watch - Lido Contributor Gabriella Presents APM’s on NOCC #27** [![](https://blog.lido.fi/content/images/2025/05/image.png)](https://youtu.be/TThrx9ierAg?ref=blog.lido.fi) ### **Breaking Down APMs: The Three Layers** The APM framework is made up of **three core components**: 1. **Mechanisms** – The high-level concept (e.g., PBS, preconfirmations). 2. **Protocols** – The specific technical designs for implementing mechanisms (e.g., MEV-Boost, Bolt). 3. **Sidecars** – Software tools that support protocols (e.g., MEV-Boost, Commit-Boost). Simple analogy: *Mechanism = big idea* *Protocol = instruction manual* *Sidecar = helper tool to run it* This modular setup allows for flexibility—different tools can be combined and tested without disrupting the core Ethereum software. ### **How Lido Ensures APMs Are as Secure as Possible** To avoid risks, APMs must pass through a structured rollout pipeline: **Step 1: Preparation** For consideration, APMs must have clear documentation, a performance tracking system, a rewards-sharing model, and third-party security reviews (if possible). **Step 2: Community Signal** A [PERCH](https://research.lido.fi/t/proposal-perch-protocol-evaluation-and-request-coordination-hub/8306?ref=blog.lido.fi) proposal is submitted, gauging Node Operator interest. Ideally, a level of testing is already done outside Lido infrastructure. **Step 3: Testnet Period** The APM must run on testnet for at least 1 month, with **a sufficient number of validator keys** participating and clear success criteria. **Step 4: Security Review** The community and Node Operators assess the APM from a security perspective and discuss mitigation plans for any risks found. **Step 5: Gradual Rollout** If all checks are passed, the APM Committee greenlights a gradual deployment, starting with willing Node Operators. ### **Updating the Block Proposer Rewards Policy** To align incentives, Lido is working on a proposal to revise the **Block Proposer Rewards Policy**. This ensures Node Operators using APMs do so transparently and in ways that benefit stakers, Node Operators, and the protocol. ### **Why It Matters** Ethereum’s block production landscape is shifting. This framework will give Lido the tools to navigate this terrain confidently, unlocking new efficiencies and potential rewards, **without compromising on decentralization or safety**. And it’s not just a top-down process. Lido is inviting **Node Operators, researchers, and community members** to help shape how these tools are evaluated and adopted. ### **Join the Conversation** The future of Ethereum block production is being written now. Whether you’re running nodes, staking ETH, or building protocols—your feedback matters.👉 [Visit](https://research.lido.fi/t/introducing-the-apm-framework-mechanisms-protocols-and-sidecars/9884?ref=blog.lido.fi) the original APM framework mechanisms proposal. 👉[ Visit the Node Operator Portal for APMs](https://operatorportal.lido.fi/?ref=blog.lido.fi) to dive deeper, share insights, or participate in testing. ### Lido DAO Governance: Security Measures & Oversight URL: https://blog.lido.fi/lido-dao-governance-security-measures-oversight/ Last updated: 2025-03-31T08:23:03.000Z ## **Introduction** As DAOs scale, so do the risks and challenges of governance. The larger the protocol, the greater the responsibility to ensure secure, decentralized, resilient, and trackable decision-making. Lido DAO is committed to navigating these complexities—continuously working toward trustless, governance-minimized, and ethos-aligned decision-making. While progress has been made (as you can follow [on the Lido Scorecard](https://lido.fi/scorecard?ref=blog.lido.fi)), governance must adapt to an evolving ecosystem. This article outlines recent governance updates and ongoing efforts to boost security, foster participation, and maintain transparency — as Lido grows, so does the work to strengthen the DAO. ## **Three-Step Governance Process** The Lido governance process includes 3 steps: [discussion](https://research.lido.fi/?ref=blog.lido.fi), [off-chain vote](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth), and [on-chain vote](https://lido.fi/?ref=blog.lido.fi). It provides transparency and constitutes a deliberate decision-making process that works toward the DAO's goals of decentralization and ethos-aligned governance in several ways: - **Balanced participation**: The combination of forum discussions (accessible to all), off-chain voting (gas-free), and on-chain execution creates multiple entry points for participation. By socializing all changes publicly before implementation, potential issues can be identified and addressed by the broader community. - **Transparency and public record**: Every step of the process is documented publicly—from initial proposals and their refinements to middle checks, audits, votes, and final implementations. The Research forum ensures community visibility and early feedback. - **Gradual decision-making**: The multi-step process prevents hasty decisions and swift voting proposals. The process is set, and each stage has a specific duration, making it obvious if malicious actors try to quickly push through harmful proposals. ## **Two-Phased On-Chain Voting** The on-chain voting [consists of two phases:](https://blog.lido.fi/moving-to-two-phase-voting/) the main phase and the objection phase. In March 2025, their duration [was extended](https://vote.lido.fi/vote/184?ref=blog.lido.fi): - From 48 hours to 72 hours for the main phase, - From 24 hours to 48 hours for the objection phase. These changes were made to **enhance voter participation** and address key governance challenges: - **Narrow voting window:** Delegates requested extended voting timeframes to allow enough time for proper review of proposals. - **Voting apathy:** The initial voting duration at Lido's launch in December 2020 was 24 hours. This was later extended to 72 hours before evolving into the two-phase system (previously: **48-hour main phase, 24-hour objection phase**). Since then, LDO has become more widely distributed, [yet active voting power has declined](https://dune.com/lido/lido-governance?ref=blog.lido.fi) from 88,364,207 LDO in Q4 2023 to 63,520,217 LDO in Q4 2024\. These numbers demonstrate **reduced voter participation**, as decision-making now involves more people, yet fewer of them are actively participating in votes. Extending the voting timeframe gives tokenholders more time to assess and participate in governance decisions. - **Tokenholder oversight of delegates:** With on-chain delegation, it may require more time for voters to ensure their delegates made the right choice and possibly **override a delegate's vote**. Longer durations of each phase give more room for these decisions to be considered. - **Risk-optimized equilibrium:** The current process balances swift emergency responses with sufficient time for voter participation. While some DAOs opt for much longer voting periods, Lido DAO has chosen a practical middle ground—long enough for thorough governance decisions but short enough to react efficiently when needed. The updated schedule is as follows: - **Main Phase**: Wednesday 14:00 UTC → Saturday 14:00 UTC - **Objection Phase**: Saturday 14:00 UTC → Monday 14:00 UTC ## **GateSeal: An Emergency Response Mechanism** [GateSeal acts as an emergency brake](https://docs.lido.fi/multisigs/emergency-brakes?ref=blog.lido.fi) on specific smart contracts, allowing for rapid action in response to critical vulnerabilities without waiting for the standard on-chain voting procedure to complete. This measure helps mitigate risks in the following ways: - **Targeted protection for fund movements:** GateSeals can **instantly pause** specific contracts: Main GateSeal halts **WithdrawalQueue** (user withdrawals) and **ValidatorExitBus** (node operator exits)—to prevent unauthorized fund extraction during security incidents such as exploits, governance attacks, or network manipulation. **CSM GateSeal** provides extra protection for Core **CSModule**, **CSAccounting**, and **CSFeeOracle** smart contracts. Other protocol components remain unaffected to minimize disruptions. - **Time buffer for governance:** GateSeal provides a crucial time buffer for the community to assess issues, propose solutions, and conduct votes before contracts automatically resume. If the issue cannot be resolved in time, LDO tokenholders can vote to extend the pause. If no action is taken, the contracts unpause automatically. - **Managed by a committee:** However rapid the decision to trigger GateSeals could be, it still requires [committee approval](https://docs.lido.fi/multisigs/emergency-brakes/?ref=blog.lido.fi#11-gateseal-committee), with a 3/6 quorum, preventing unilateral single-party control over the tool. ![](https://blog.lido.fi/content/images/2025/03/Frame-1171276846.png) To maintain the security and efficiency of the GateSeal mechanics, the seal duration was proposed to be twice the governance reaction time plus one day—providing buffer time for preparing proposals and communications, conducting the vote itself, and allowing additional time if a re-vote is necessary in case the first vote fails to meet quorum. As a result, the updated GateSeal duration after the on-chain vote extension is 11 days. ## **DAO Committees** Committees oversee specific areas such as node operations, rewards distribution, and treasury management, ensuring **expert oversight** while balancing **governance efficiency and decentralization**. This structure provides several advantages: - **Expert-driven decisions:** Committees consist of contributors with specialized knowledge, ensuring informed governance. - **Secure and transparent operations:** Each committee decision requires a predefined quorum [through multisig policy](https://research.lido.fi/t/lido-dao-ops-multisigs-policy-2-0/9574?ref=blog.lido.fi), and all actions are recorded **on-chain** for **full transparency** and **public accountability**. - **Treasury management and responsibilities:** Multisigs with a balance over $50K must have an **unlimited allowance set to the Lido Aragon Agent.** This mechanism ensures that **funds remain retrievable** if governance decides to recover them when needed. - **Accountability for routine operations:** Routine decision-making is streamlined through [Easy Track](https://easytrack.lido.fi/?ref=blog.lido.fi), reducing operational burdens while maintaining accountability for the DAO. ## **What's Next** These are the steps Lido DAO has taken toward strengthening governance security, improving voter participation, and refining decision-making. You can participate by following the new proposals on the [Research Forum](https://research.lido.fi/?ref=blog.lido.fi), [Snapshot](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth), and [on-chain](https://vote.lido.fi/?ref=blog.lido.fi). Track progress on the [Lido Scorecard](https://lido.fi/scorecard?ref=blog.lido.fi) to see how these updates are making a difference. Up next, [Dual Governance](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x3bdf528b31956e029e867ebf79b02ee07e9a973987b34c5cffc14392e8b4480c) will bring additional decentralization and security improvements. ### Lido’s Roadmap to Pectra: Navigating Complexity and the Path Forward [Pt 2] URL: https://blog.lido.fi/lidos-roadmap-to-pectra-navigating-complexity/ Last updated: 2025-03-25T16:33:53.000Z A previous [Pectra explainer](https://blog.lido.fi/lido-and-pectra-ensuring-compatibility/) examined key Ethereum Improvement Proposals (EIPs) included in the Pectra upgrade. Pectra introduces EIP-7251, allowing validators to consolidate up to 2048 ETH. This discussion explores the risk-reward trade-offs that inform the integration of new functionalities. - Ongoing research shows minimal changes in slashing risk beyond 100 validators per host, with faster response times being key to mitigating losses. - While larger validators see slight APR improvements, consolidation offers no major financial incentive. - Lido v3 & stVaults will be ready to immediately support consolidation without requiring changes, allowing for an easy transition. - Rolling out consolidation to existing modules (starting with the Curated Set) requires research and technical upgrades, which are currently ongoing with expected support to start in Q1 2026. - Additionally, this discussion provides an overview of EIP-7002, detailing the motivation and technical specifications for triggerable withdrawals. --- Pectra brings new opportunities for validator set structure through EIP-7251, enabling validator consolidations and validators to now have effective balances up to 2048 ETH, and EIP-7002, introducing a voluntary withdrawal (either partial or full, via an exit) operation triggered by a validator’s Execution Layer (EL) withdrawal credentials. These changes involve trade-offs in slashing risks, potential rewards, and technical and operational considerations for the Lido Protocol. This article reviews Lido DAO contributor research on these trade-offs, helping staking ecosystem participants make informed decisions on Pectra functionalities. ## Background & Rationale The advent of increased max effective balance (MAX\_EB) and validator consolidations will significantly contribute to Ethereum’s evolving staking landscape, particularly for protocols like Lido. EIP-7251 enables certain validator types to have effective balances (i.e. ETH that counts as "stake weight" and is eligible for duties, rewards, and penalties) up to 2048 ETH vs the traditional 32 ETH maximum. Protocols may benefit from this feature, which helps reduce network congestion, by either using this validator type for new validators, and/or consolidating existing validators into this new type. Consolidations facilitate a shift toward a new equilibrium between larger and smaller validators, optimizing network composition and stake allocation. This transitional process also introduces challenges, including potential slashing risks, governance complexities, and increased development effort for decentralized protocols, which must implement changes entirely on-chain. Unlike centralized entities that can adapt quickly off-chain, in order to implement the functionality enabled by changes like EIP-7251 and 7002, decentralized staking solutions like Lido require careful considerations with respect to changes of on-chain design and protocol economics, rigorous testing in a permissionless manner in cooperation with Node Operators who use the protocol, and deep analysis on protocol impact. The conducted research aims to assess the trade-offs of different consolidation levels for large on-chain staking protocols like Lido and the node operators that use them, as well as thebroader impact on the Ethereum ecosystem, and attempt identify a robust process for consolidation and usage of larger MAX\_EB validators that balances that with overall goals of protocol decentralization, security, and network stewardship. The impact on the Ethereum network, particularly in reducing the number of attestation messages and overall bandwidth load, could see a decrease of up to one-third (or even more) depending on the extent of consolidation adoption. The following example provides an illustrative scenario of this impact, assuming: - 60% of Lido Curated Module validators consolidate to 2048 ETH. - A 30% reduction in the total number of non-Lido validators due to consolidation. ![](https://blog.lido.fi/content/images/2025/03/01.png) ## Activating Triggerable Withdrawals EIP-7002 introduces "Triggerable Withdrawals" (TWs), finally addressing the key trust issue in delegated staking, where stakers depend on node operators to process withdrawals. This EIP lets stakers withdraw ETH independently of the validator’s signing key, using a new voluntary withdrawal operation tied to the validator's withdrawal credential. For a protocol like Lido, motivations for supporting TW include reducing reliance on trusted entities, enabling permissionless staking modules, providing a fallback for lost validator keys, and supporting Dual Governance by allowing stETH holders to withdraw funds autonomously. Integrating TWs into the Lido protocol [requires updates](https://hackmd.io/@lido/SJKVeT990?ref=blog.lido.fi) to on-chain contracts like the Withdrawal Vault, Accounting Oracle (AO), Validator Exit Bus Oracle (VEBO), CSM contracts, and Staking Router. Off-chain tools, including Oracles and the Ejector, also need modifications, alongside new mechanisms for triggering withdrawals and reporting delinquent keys. TWs would operate in two phases: first, trusted protocol components (e.g. Oracles) submit a report hash to the VEB contract; then, anyone could potentially "unpack" and publish the report data to trigger exits, subject to certain limitations (like safety rate limits). This approach enhances protocol security and robustness by reducing reliance on node operators and oracles, and enabling permissionless exits. ### Goal This summary highlights key findings from [an earlier study](https://research.lido.fi/t/eip-7251-effects-on-rewards-risks/7718?ref=blog.lido.fi) that provided a model for how consolidating parts of the protocol into large validators impacts slashing risks and staking dynamics, with a particular focus on economic factors. Concretely, it explores the security implications of larger validator balances and how changes to the validator set affect reward skimming, fee distribution, and network efficiency. ### Assumptions The analysis of validator consolidations relies on the following key assumptions about Ethereum’s staking and slashing dynamics: - Slashing risk focuses on attestation double votes, primarily caused by running the same validator key(s) on multiple instances with differing chain views. - Slashing penalties scale linearly with a validator’s effective balance. - Double attestation slashings occur only in rare divergent slots, with estimated divergent slot rates ranging from 0.01% to 0.2%. - Node operators typically respond only after an initial slashing event, with reaction times varying from 16 to 7,200 slots. - Attestation frequency remains one per epoch per validator, regardless of balance. - Entry queue size varies between 200 and 20,000 validators, while reward skimming takes an average of 8.54 days. - Gas prices range from 30 to 35 Gwei per month, based on 2023 data. - Total stakeis approximately 31.39M ETH. - Execution layer (EL) APR is 0.425%, with network rewards tied to validator set size and EL market conditions. ### Slashing Risks: A Closer Look The analysis reveals several factors that influence slashing risks, emphasizing the impact of high-value consolidations, reaction times, and network conditions on expected losses: - **Insight #1:** Consolidating into only a few validators (e.g. using two 128 ETH validators instead of eight 32 ETH validators) can lead to higher initial losses in the event of a slashing. In contrast, spreading stake over more than 100 validators tends to lower these initial losses, though further increases in validator count yield diminishing benefits. - **Insight #2:** The speed of response is critical. A prompt response can substantially decrease realized losses. For instance, reacting in about 12 minutes instead of an hour can cut expected losses by nearly three times. However, if reaction times extend to a full day, validator losses may increase to the full amount hosted in a single machine under the study’s model. - **Insight #3:** While consolidation across a large number of validators may reduce expected losses, it simultaneously increases variance, introducing greater overall uncertainty into risk outcomes. Under stressful network conditions, such as prolonged activation delays or high gas fees, the benefits of consolidation become less significant. ![](https://blog.lido.fi/content/images/2025/03/02.png) ### Rewards: Dissecting the Potential Gains The results indicate a modest potential for increased APR through validator consolidations, hard to translate in real impact for small and large validator sets. Some factors like larger validators and certain network conditions provide the most notable benefits: - **Insight #4:** The potential increase in APR from consolidation is modest, with estimations of no more than 0.002% increase under reasonable conditions. Noticeable APR enhancements are primarily limited to very large validators (with balances of 1700+ ETH). In the long run, the compounding of rewards will result in greater returns compared to standard rewards, but again representing a very subtle increase. - **Insight #5:** Validator performance is directly linked to network conditions and overall network health. In cases of activation delays or transaction pool congestion, 0x02 validators can operate more efficiently than the 0x01 validators used by large staking pools. - **Insight #6:** The distribution of validator balances plays a crucial role in total rewards. Employing strategies that involve 0x02 validators (compounding) and leveraging EL-inflows (either from EL rewards or skimmed CL rewards) to create new 0x01 validators can optimize long-term returns. ![](https://blog.lido.fi/content/images/2025/03/03.png) ## Release Timeline & Future Roadmap ### What does this mean for Lido? Validator consolidation presents both opportunities and risks. Although it can lead to minor APR improvements under specific circumstances, it might also amplify slashing risks. The risks are more pronounced when validator numbers are low, and reaction times are slower. It is critical to account for infra setup misconfiguration, where double attestation can lead to slashing. Effective strategies include quick responses to slashing alerts, and Node Operators can minimize slashing costs by immediately shutting down an affected cluster. Usage of larger validators and consolidation operations in the Lido protocol will follow a phased implementation approach: - **Phase 1 – stVaults Launch (2025 Q2-Q3):** Lido v3 and stVaults are designed to support larger MAX\_EB validators from the get-go. stVaults operate using the concept of “vault balances,” independent of the number of operator keys. This architecture enables immediate adoption of the 0x02 withdrawal credentials type while maintaining compatibility with the protocol. This allows stVaults to serve as the initial Lido protocol implementation for larger validators, with support being added to Lido Core sometime thereafter. - **Phase 2 – Module and Marketplace Research (2025 H2 – 2026 H1):** The second phase of the MAX\_EB and consolidations implementation will focus on setting the foundation for a gradual rollout of consolidations across Lido v2 Modules, starting with the Curated Set.While stVaults are already compatible with consolidation, integrating this functionality into Lido Core and its existing modules requires careful planning and re-architecting of base protocol accounting. ## What's Next Research is ongoing to define key consolidation parameters, target values, and a full migration strategy that ensures security, efficiency, and minimal disruption.Beyond operational feasibility, this phase will involve designing and implementing necessary on-chain and off-chain code changes, a process expected to start taking place in the second half of 2025\. ![](https://blog.lido.fi/content/images/2025/03/Screenshot_2025-03-25_at_9.02.15_AM.png) Given the complexity of these upgrades, it is estimated that Lido Core will begin supporting larger MAX\_EB validators and consolidations in Q1 2026.Additionally, migration functionality between Node Operators and modules, through the use the consolidations mechanism, are being actively researched, aiming to refine stake allocation and reallocation strategies. This research, already underway, will continue throughout 2025 to assess how these mechanisms could optimize the protocol towards a robust market of staking products.Based on the above timelines, it is estimated that a Lido protocol optimal distribution of both 2048- and 32-ETH validators will likely take shape by mid-2026. ### Lido On Unichain URL: https://blog.lido.fi/lido-steth-wsteth-now-on-unichain/ Last updated: 2025-12-02T10:39:58.000Z The Lido protocol's stETH and wstETH are now available on [Unichain](https://www.unichain.org/?ref=blog.lido.fi), a DeFi-native Ethereum Layer 2 blockchain built to enhance cross-chain liquidity. Developed by [Uniswap Labs](https://app.uniswap.org/?ref=blog.lido.fi), Unichain takes advantage of [Optimism](https://www.optimism.io/?ref=blog.lido.fi)’s OP Stack to deliver significant improvements in transaction speed and cost efficiency while maintaining Ethereum's security foundation. The deployment on Unichain was implemented using the Lido protocol [Multichain Automaton](https://github.com/lidofinance/multichain-automaton?ref=blog.lido.fi) – a script that streamlines the deployment of stETH and wstETH bridges on OP Stack networks using the reference architecture. ➡️ To bridge your stETH or wstETH to Unichain: [Superbridge](https://superbridge.app/unichain?ref=blog.lido.fi) ➡️ For tutorials & instructions: [Guide: Bridging to Unichain](https://help.lido.fi/en/articles/10696848-bridging-to-unichain?ref=blog.lido.fi) ## **What is Unichain?** Developed by [Uniswap Labs](https://app.uniswap.org/?ref=blog.lido.fi), [Unichain](https://www.unichain.org/?ref=blog.lido.fi) is an EVM-compatible Layer 2 rollup built using [Optimism's OP Stack](https://docs.optimism.io/stack/getting-started?ref=blog.lido.fi) and is a member of the [Superchain ecosystem](https://www.superchain.eco/?ref=blog.lido.fi). It launched as a Stage 1 Rollup with a fully functioning permissionless [fault proof system](https://docs.unichain.org/docs?ref=blog.lido.fi) ensuring trustless security. Unichain is specifically designed for DeFi and cross-chain liquidity, with plans to utilize Uniswap v4's potential for liquidity provision. The chain is supported by a robust DeFi ecosystem of 80+ protocols and features 1-second block times with plans for 250ms sub-blocks through Rollup Boost, reducing latency. ## **Bridging to Unichain** The [Superbridge.app](https://superbridge.app/unichain?ref=blog.lido.fi) provides user interface to transfer stETH & wstETH between Ethereum and Unichain. Before using Superbridge ensure your wallet contains [stETH](https://help.lido.fi/en/articles/5230610-what-is-steth?ref=blog.lido.fi) or [wstETH](https://help.lido.fi/en/articles/5231836-what-is-lido-s-wsteth?ref=blog.lido.fi) (wrapped stETH), then follow these steps: 1. **Access Superbridge:** Navigate to [Superbridge.app](https://superbridge.app/unichain?ref=blog.lido.fi), a popular bridge UI for OP Stack Chains. 2. **Connect Your Wallet:** Link your Ethereum wallet to the bridge UI and verify that you have enough ETH to cover gas fees. 3. **Select Your Networks:** Choose Ethereum as the source chain and Unichain as the destination chain. 4. **Select Your Token:** Choose stETH or wstETH from the list of available tokens in the dropdown menu, and choose the amount you wish to transfer to Unichain. 5. **Approve and Confirm**: Review the transaction details, approve the interaction, and confirm the transfer in your wallet. The bridging process typically takes only a few minutes to complete. You can track your transaction status on both [Etherscan](https://etherscan.io/?ref=blog.lido.fi) and [Uniscan](https://uniscan.xyz/?ref=blog.lido.fi). Bridging back from Unichain to Ethereum may take up to 7 days. This delay is a standard security feature of the OP Stack, serving as a challenge period before the transaction is finalized. If you wish to unwrap wstETH into stETH or wrap stETH into wstETH, it can be done easily on the Unichain network using [Lido’s wrap widget](https://stake.lido.fi/wrap?ref=blog.lido.fi). This ensures a straightforward and efficient way for managing your tokens. ## **Additional Resources** - [Guide: Bridging to Unichain](https://help.lido.fi/en/articles/10696848-bridging-to-unichain?ref=blog.lido.fi) - [Introducing the Lido Multichain Hub](https://blog.lido.fi/introducing-new-lido-multichain-hub/) - [Multichain Automaton script](https://github.com/lidofinance/multichain-automaton?ref=blog.lido.fi) - [Unichain Documentation](https://docs.unichain.org/docs?ref=blog.lido.fi) ### Lido’s Roadmap to Pectra: Ensuring Compatibility with Ethereum’s Next Upgrade URL: https://blog.lido.fi/lido-and-pectra-ensuring-compatibility/ Last updated: 2025-02-28T16:24:01.000Z ### **TLDR:** The upcoming **Pectra** Ethereum hardfork requires adjustment to several core components of the Lido Protocol so that it can remain in sync with Ethereum’s evolving consensus rules. Changes include **updates to the oracle infrastructure**—addressing Ethereum’s new deposit queues and dynamic validator balances—as well as **a redeployment of the CS Verifier contract** to incorporate revised proof indexing and to remove the greatly reduced initial slashing penalty. **Oracle reporter sanity checker parameters will also be refined**, reducing the daily limits for validator exits and appearances. Two sequential on-chain votes are planned (before and after the hardfork) to implement these changes, with fallback measures such as pausing deposits if needed to ensure operational stability. Some of the new functionalities of Pectra are expected to be integrated in subsequent upgrades to the protocol, subject to DAO approval. ## Pectra: High-Level Overview Pectra is Ethereum’s upcoming network upgrade, combining enhancements from the Prague and Electra hard forks. This upgrade impacts both the consensus and execution layers, introducing significant changes designed to improve validator operations, network efficiency, and user experience. On the consensus layer, Electra expands the effective balance range for validators, raising the upper limit to 2048 ETH. It also enables validators to initiate full or partial withdrawals directly from their withdrawal credentials address, streamlining fund management. Meanwhile, the execution layer benefits from Prague’s innovations, including support for more blobs per Ethereum block, improving scalability for rollups. Additionally, Prague enhances EOA (Externally Owned Account) capabilities by account abstraction. Some Ethereum Improvement Proposals (EIPs) included in Pectra span both layers, improving the in-protocol coordination and messaging mechanisms for operations like deposits and withdrawals that require synchronization between the consensus and execution layers. A key transformation for validators in this upgrade is the introduction of a new validator type that supports a higher maximum effective balance (2048 ETH). This change addresses network congestion concerns resulting from the current max effective balance of 32 ETH, which was put in place due to historical constraints based on intents to scale Ethereum via execution shards. Going forward, node operators running validators will have the option of creating new validators with this higher effective balance (i.e. type 0x02), migrating (or consolidating multiple) existing validators (of either 0x01 or 0x02 type), or creating validators using the previous 0x01 or 0x00 withdrawal credentials types. As a result, it is estimated that the total number of validators on the network will decrease through consolidations or operators using 0x02 credentials for new validators while exiting previous 0x01 type validators when needed for withdrawals. By streamlining validator operations and unlocking new execution-layer efficiencies, Pectra sets the stage for Ethereum’s long-term scalability and future advancements. ## How Pectra Impacts Lido For a more technical overview and further discussion of immediate changes proposed to the Lido protocol of Pectra compatibility, refer to [Lido Improvement Proposal 27.](https://research.lido.fi/t/lip-27-ensuring-compatibility-with-ethereum-s-pectra-upgrade/9444?ref=blog.lido.fi) ### **Short-Term Considerations** Immediate changes focus on ensuring that the Lido Protocol remains fully operational through and following the Pectra hardfork. This includes: - Updating the oracle consensus version to manage new deposit queues and dynamic validator balances. - Redeploying the CS Verifier contract with updated gIndexes, and revising validator churn parameters (such as lowering the daily exit and appearance limits). - Additionally, interim measures like fallback plans (e.g., pausing deposits if needed) and two sequential on-chain votes are designed to secure the protocol’s stability during the transition. ### **Long-Term Considerations** Looking beyond the hardfork, the long-term roadmap involves leveraging new Ethereum capabilities and exploring further enhancements. This includes integrating advanced features such as triggerable withdrawals (EIP 7002) and higher effective balance validators and making use of consolidations (EIP 7251), adapting to higher effective balance strategies, and refining monitoring, tooling, and the withdrawals API. Future protocol upgrades will address these opportunities to enable the optimization of the validator footprint of the Lido protocol, ensuring the protocol evolves in step with Ethereum’s ongoing upgrades and broader network improvements. ## List of Upgrades ### **Removal of Initial Slashing Penalty**: The immediate penalty for a slashed validator, now approximately **0.008 ETH**, is less material compared to the previous 1 ETH deduction. Accounting for this penalty only at final withdrawal is proposed. ### **Accounting, Validator Exit Bus, and CSM Fee Oracles**: These off-chain services track validator status and compute rewards and penalties. The addition of deposit queues and modified validator balances in Electra requires new logic to handle dynamic waiting periods for validator activation. ### **CS (Community Staking) Verifier Contract** ### **Proof gIndexes**: Because Pectra reorganizes consensus-layer containers, hashing and indexing rules must be adjusted. A redeployment of the CS Verifier contract is planned to incorporate dual sets of gIndexes (pre- and post-Pectra). ### **Oracle Report Sanity Checker** The restrictions on protocol modifications that the Oracle can implement have been tightened due to the reduced initial slashing penalty, the newly imposed upper limit on exit churn, and changes in the validator entry queue. - **exitedValidatorsPerDayLimit**: Lowered from 9000 to 3600. - **appearedValidatorsPerDayLimit**: Lowered from 43200 to 1800. - **initialSlashingAmountPWe**: Reduced from 1000 to 8 (0.008 ETH). ## Voting & Governance Two consecutive on-chain votes are planned: 1. **Before Pectra**: Oracles will adopt an updated consensus version, and the old CS Verifier will be replaced. 2. **After Pectra**: Additional optimizations, including the updated parameters in the Oracle Report Sanity Checker, will be enacted. ## Upgrade Timeline & Fallback Measures ### **Deployment & Audits** Any new contracts—including the redeployed CS Verifier and Off-chain Oracles—will be audited by external specialists and audit reports will be published before DAO voting. ### **On-Chain Votes** - **Pre-Hardfork Vote**: Approval signals readiness for Pectra; the new oracle software and verifier contracts ensure uninterrupted service once the upgrade activates. - **Post-Hardfork Vote**: Further parameter adjustments will be ratified, such as updated validator churn and slashing amounts. - **Fallback Plan** If the initial vote fails or is delayed, deposits may be paused approximately 24 hours before the hardfork to mitigate operational risks. In that scenario, a separate DAO vote would decide the timing for reopening deposits once post-upgrade stability is confirmed. ## Looking Ahead The additional capabilities introduced by Pectra, such as higher validator balance caps and more robust solutions for validator exits, offer exciting paths for future enhancements. However, only minimal changes required for protocol continuity are addressed at this stage. New features such as triggerable exits in EIP-7002 and consolidation logic in EIP-7251 involve complex changes and may be adopted through separate proposals. An analysis of optimal consolidation parameters is currently in development and will be released soon for community review and discussion. Meanwhile, execution-layer innovations in Prague—ranging from greater blob support to historical block-hash storage—support broader Ethereum performance goals and may eventually influence how staking services are offered. Ongoing analysis will continue to determine whether any direct effects on Lido warrant additional protocol changes. ## Further Reading ### **Increase the MAX\_EFFECTIVE\_BALANCE *(EIP-7251)*** The effective balance range for new validators now extends from **32 ETH up to 2048 ETH**, moving away from the strict 32 ETH limit. 32ETH is still the min\_activation\_balance. Validators from before the upgrade are not affected. Users can change to the new validator configuration via a “Consolidation Request”, as opposed to having to exit. EIP 7251 also introduces the new 0x02 compounding withdrawal credential. ### **Execution layer triggerable withdrawals *(EIP-7002)*** Withdrawals and validator exits can be initiated via a validator’s execution layer withdrawal credentials (0x01 or 0x02), reducing the operational responsibilities and trust assumptions placed on the validator key and whoever controls it. ### **Supply validator deposits on chain *(EIP-6110)*** The beacon chain no longer parses events from the deposit contract. Instead, a new pending\_deposits queue and a deposit\_requests mechanism manage inflows, changing the timing by which validators appear on-chain. ### **General-Purpose Execution-Layer Requests *(EIP-7685)*** This proposal defines a general-purpose framework for storing contract-triggered requests by extending the execution header with a single field to hold request information—which is later exposed to the consensus layer for processing—and is motivated by the growing demand for additional EL-triggered behaviors from smart contract-controlled validators, enabling these systems to delegate administrative operations directly to their governing contracts without updating the execution block structure, thereby enhancing overall safety. ## **Prague: Execution-Layer Upgrades** ### **Precompile for BLS12-381 curve operations *(EIP-2537)*** Add functionality to efficiently perform operations over the BLS12-381 curve—including BLS signature verification through curve arithmetic and multi-scalar multiplication for aggregating public keys or individual signers’ signatures—to provide over 120 bits of security compared to the existing BN254 precompile’s 80 bits. ### **Serve historical block hashes from state** *(EIP-2935)* Store and provide the most recent 8,192 block hashes as storage slots in a system contract to enable stateless execution. ### **Increase Calldata Costs** *(EIP-7623)* The current calldata pricing permits EL payloads of up to 7.15 MB, although the average size is closer to 100 KB. This EIP proposes adjusting calldata costs to reduce both the maximum block size and its variance without adversely affecting regular users, achieved by increasing costs for transactions that primarily post data. ### **Blob Throughput Increase & API Enhancements** *(EIP-7691, EIP-7840)* The number of blobs permitted per block is increased to reach a new target of 6 and 9 blobs per block respectively, and new APIs are provided for managing them. ### **Set EOA account code** *(EIP-7702)* Externally Owned Accounts (EOAs) can store executable code, enabling more sophisticated functionality such as native multicalls or delegated operations. The EIP will add a new tx type that permanently sets the code for an EOA. **EIPs Referenced**: - EIP-7251 (Increase the MAX\_EFFECTIVE\_BALANCE) - EIP-7002 (Execution layer triggerable exits) - EIP-6110 (Supply validator deposits on chain) - EIP-7685 (General purpose execution layer requests) - EIP-2537 (BLS12-381 precompile) - EIP-2935 (Save historical block hashes) - EIP-7623 (Increase calldata cost) - EIP-7691 & EIP-7840 (Blob throughput & schedule) - EIP-7702 (Set EOA account code) ### Introducing Lido V3: Ethereum Staking Infrastructure URL: https://blog.lido.fi/lido-v3-ethereum-staking-infrastructure/ Last updated: 2025-02-11T15:26:28.000Z ## **Overview** Lido V3 introduces stVaults, a modular innovation that adds flexibility to Lido on Ethereum by enabling customizable staking setups, allowing users to select Node Operators and validation infrastructure. Stakers can take advantage of stETH’s liquidity, security, and integrations by tailoring Ethereum staking strategies to meet their needs and optimize rewards based on priorities. **Institutional stakers** can access stETH through fully tailored setups that help fulfil internal compliance requirements while providing the operational control they need. **Node Operators** can design personalized staking products for high-volume participants, offering features like validator customization and enhanced reward mechanisms. **Asset Managers** can develop future-proof structured products, leveraging stETH as premier collateral within the Ethereum ecosystem. ## **The Staking Landscape Shift** Since the launch of Lido and stETH in 2020, the staking market has evolved significantly, driven by new users, emerging use cases, and shifting challenges. Institutional demand for staking has grown, at times accompanied by stricter regulatory and compliance considerations. While many institutions already stake through Lido, others face internal constraints. At the same time, sophisticated users seek greater flexibility in reward structures, while Ethereum—along with its vast ecosystem of protocols—continues to grapple with scalability and stake centralization. With a growing diversity of user needs, a **one-size-fits-all** approach no longer fully aligns with the market’s evolution. While Lido remains the leading choice for liquid ETH staking, the landscape demands more personalization. The time has come to introduce a new layer of flexibility to the most trusted staking solution—one that unlocks tailored, customizable, and *modular staking* on Ethereum. This evolution ultimately transforms Lido from a liquid staking protocol intoEthereum Staking Infrastructure. ## **Lido V3: Ethereum Staking Infrastructure** Lido V3 expands on the capabilities of Lido Core, the Lido on Ethereum protocol as it currently stands, consisting of the Staking Router and its Modules, by introducing **stVaults** (“staking Vaults”), a staking primitive designed to deliver tailored solutions across diverse use cases. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXfkjKeTb23r65LH1pfjhNeMonvMhQFMpQqGGwXOmt6px9HRAVQ2_D8rrlIoybA2XMRRgXQSomyLeZDl4SVw0ipai-TqC88uKmgllB_nLDLQyu6O7waCt-0o27gvYiBRUY-n4_qDaQ?key=2sAf9r7wc0tizZGAkgXCHDVo) stVaults enable access to stETH liquidity in personalised setups where validation, fee structures, risk-reward profiles, and other parameters can be configured to meet the needs of a wide variety of stakers. While the design aims to be as universal as possible, certain segments have been specifically considered to validate this approach: - **Institutional stakers** should have the opportunity to access stETH liquidity while keeping funds within a dedicated perimeter of verified counterparties, helping to ensure compliance with regulatory and risk management requirements; - **Node Operators** should have direct access to institutional and high-volume stakers, diversifying revenue streams and directly affecting their TVL and Rewards; - **Curators and Asset Managers** should be able to swiftly adapt to market dynamics, leveraging stETH’s universal collateral properties to develop innovative strategies, optimize capital efficiency, and integrate with emerging DeFi opportunities. End of the day, all the parties should have long-term incentive alignment: a predictable, future-proof, and value-based source of rewards within the Ethereum ecosystem. ## **The Technical Foundation: stVaults** stVaults is a non-custodial staking platform that operates alongside the existing Lido Core Protocol. This enables anyone to securely stake ETH via Node Operators of their choosing. Thus, through the connection to Lido Core, stVaults can mint stETH backed by a personalized validation setup, accessing the deepest LST liquidity and integrations the market has to offer. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXd7EIzyeIrdDAdUqda6s6U5TpgIf9lQwciDMYlQetE9t5pskpNOViTRdBK2y7tPfBScNyoWCrcqx68cWTxpFTj6fBCU6efkShWCGgmJKPpqs_MWOg6knkh515LWv6aCCbChGj1y_w?key=2sAf9r7wc0tizZGAkgXCHDVo) This design enables stVaults to support a broad range of product lines while leveraging and enhancing the security, decentralization, and liquidity advantages of the Lido Core Protocol. To mitigate slashing risks, the Reserve Ratio (RR) concept is introduced. stVaults mint stETH against the amount of ETH provided, with minimum amount bonded as defined by the stVault’s RR. This ensures that stETH minted through stVaults remains reasonably overcollateralized. Overcollateralization strengthens stETH’s economic security by increasing its resilience to possible slashing events and prolonged penalties. Additionally, it enables a dynamic adjustment between public Node Operators’ reputation and bond requirements at the protocol level, ensuring network stability and supporting advanced integrations. **Read more on stVaults’ architecture and design in the** [**V3 tech docs**](https://hackmd.io/@lido/stVaults-design?ref=blog.lido.fi)**.** ## **Customizable Vaults for Every Need** With flexible configuration options, stVaults enable diverse builders to customize staking setups, optimize rewards, and develop tailored product lines while benefiting from stETH’s security and liquidity. ### Institutional Staking Institutional staking sometimes requires greater flexibility and control. stVaults address these needs by allowing institutional users to create dedicated stVaults that connect to specific Node Operators, configure integrations, and manage deposit and withdrawal access. As a non-custodial infrastructure, stVault ensures that full control over deposited ETH remains with the vault owner. stVaults can support both custodial and non-custodial setups, accommodating various operational requirements while providing access to stETH liquidity. ### Leveraged Staking For advanced stakers, stVaults provide the tools to implement leveraged staking strategies, aiming for higher staking rewards—either manually or through automated smart contracts. Potential approaches include: - **Primary market:** Accessing ETH directly from the Lido Core Protocol. - **Secondary market:** Utilizing ETH available from DeFi lending platforms. ### Restaking Exposure While the broader Lido Core Protocol helps minimize restaking risks for all stETH holders, stVaults introduce an opt-in approach to shared security. This allows participants to explore customized strategies and engage with emerging restaking trends without imposing socialized risks on the broader ecosystem. ### A Future-proof Foundation stVaults serve as a modular foundation for builders and developers, enabling the creation of staking products and tools adapted to the current meta of the ecosystem. By leveraging stETH’s universal collateral properties, developers can integrate seamlessly with DeFi applications, opening up new possibilities in decentralized innovation. ## **How Lido V3 Strengthens Ethereum’s Decentralization** ### **An emerging marketplace for open coordination and competition** Ethereum relies on a broad decentralized validator network so no single entity can capture the protocol or override social consensus. With the introduction of stVaults in Lido V3, this goal is furthered by offering a modular, customizable staking framework.Each stVault holds deposited ETH, allows minting of stETH for liquidity, and ensures enough ETH remains bonded while still being staked to maintain security. Every stVault can define flexible rules — covering fees, validator configurations, or additional validation sidecars — thus creating an open, decentralized marketplace pivoting from a one-size-fits-all pool principle while retaining the fungibility layer of liquidity represented with stETH. ### **Balancing liquidity, performance & security** stVaults come with mechanisms to balance capital efficiency, validator performance, and stake concentration. An ETH bond mitigates slashing risks, while optional dynamic fees, benchmarked against the Lido Core Protocol being linked to validator subsets within the Staking Router, help manage liquidity, assess performance, and support decentralization. This design encourages more validator setups, promoting healthy competition and spreading validation services across numerous operators. ### **Voluntary upgradability and sovereignty** An stVault lets its staker choose if and when to adopt Lido’s upgradeability. Minting stETH opts into the protocol’s evolving governance, while returning stETH reverts the vault to native staking under the staker’s upgrade objection control. This seamless on-off approach preserves sovereignty, reduces friction, and respects Ethereum’s openness and decentralization. ## **The Roadmap** Lido V3 is designed as a builder-focused product, enabling Node Operators, Curators, Asset Managers, LRTs, and other DeFi protocols to create optimal end-user solutions that leverage stETH liquidity. The strategy prioritizes efficiently delivering the necessary tools and building blocks, iterating alongside partners and the broader community. The rollout is planned in three stages: - **Stage 1**: Early adopters can use the existing tech stack to build re-staked vaults and initiate a pre-deposit and early access program for stVaults. These initial vaults will transition to full stVault functionality upon Mainnet launch. - **Stage 2**: A testnet deployment for stVaults will begin, allowing rigorous testing and integration development with partners to prepare for mainnet readiness. - **Stage 3**: The Mainnet launch of stVaults will enable key use cases, including tailored institutional setups, leveraged staking, and shared security configurations. ## **Next Steps** Lido contributors invite community members and ecosystem participants to collaborate on the design of Lido V3 and stVaults. A [research forum discussion](https://research.lido.fi/t/lido-v3-ethereum-staking-infrastructure-for-a-diverse-product-line/9511?ref=blog.lido.fi) is open. Once the design is finalized, the proposal will go to a Snapshot vote. If approved by LDO holders, an on-chain vote will follow after testnet and audits are completed. --- *Disclaimer: Blockchain staking rewards are not guaranteed, vary and are dictated by the rules of the method for validating transactions, which are developed independently by the developers of each specific blockchain network, and are not subject to modification by any liquid staking protocol. Past performance is not a reliable indicator of future results, and that all users should do their own research and due diligence before using Lido protocol. Additionally, interacting with malicious or faulty smart contracts may result in partial or complete loss of funds.* ### Lido Brings Liquid Staking To Copper's ClearLoop URL: https://blog.lido.fi/lido-brings-liquid-staking-to-coppers-clearloop/ Last updated: 2025-05-28T14:59:01.000Z [Lido Institutional](https://lido.fi/institutional?ref=blog.lido.fi) contributors are thrilled to share that [Copper](https://copper.co/?ref=blog.lido.fi) has integrated Lido protocol, providing their institutional clients the possibility to stake ETH with Lido protocol’s liquid staking middleware for Ethereum. This integration allows Copper’s clients to participate in Ethereum staking, with less operational complexities, and without any minimum staking requirements. By making use of Lido protocol’s liquid staking token (stETH), Copper’s institutional clients can now receive staking rewards within Copper’s institutional-grade custody environment. Copper’s [ClearLoop](https://copper.co/en/products/clearloop?ref=blog.lido.fi) platform enables its clients to manage collateral and operates across multiple exchanges, while also mitigating counterparty risks associated with digital asset management for institutional clients. With this integration, Copper’s clients can now incorporate staking rewards into their diverse use cases and make use of stETH on ClearLoop-supported exchanges, including [OKX](https://www.okx.com/?ref=blog.lido.fi), [Bybit](https://www.bybit.com/?ref=blog.lido.fi), and [Deribit](https://www.deribit.com/?ref=blog.lido.fi). > [Ben Lorente](https://www.linkedin.com/in/ben-lorente-8926037/?ref=blog.lido.fi), Strategic Alliances Director at Copper commented, “We’re thrilled to have integrated Lido protocol. Our clients can leverage Lido’s liquid staking middleware with Copper’s multi-award-winning MPC technology, ensuring assets are protected whilst benefiting from liquid-staking which simultaneously addresses issues of security and liquidity”. > "This integration transforms how institutions participate in Ethereum staking. Combining Copper's institutional infrastructure with Lido's liquid staking technology eliminates the operational hurdles that institutional stakers have faced," said [Kean Gilbert](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi), Institutional Relations Contributor to Lido DAO. ### **About Copper.co** Since being founded in 2018, Copper has been building institutional cryptoasset infrastructure with a focus on custody and collateral management. Underpinned by multi-award-winning technology, Copper has built a comprehensive suite of products and services required to custody and trade cryptoassets. At the core of Copper’s infrastructure is ClearLoop, which enables clients to manage collateral and settle trades across multiple exchanges. ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido protocol’s open-source, liquid staking middleware by non-retail users. Lido middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### CSM Goes Fully Permissionless URL: https://blog.lido.fi/csm-goes-fully-permissionless/ Last updated: 2026-08-26T15:17:51.000Z ### **An Opportunity for *anyone* to be a Community Staker** [The Lido Community Staking Module (CSM)](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) has officially transitioned from its [Early Adoption phase](https://blog.lido.fi/csm-early-adoption/) to being fully permissionless, as the [on-chain vote](https://vote.lido.fi/vote/183?ref=blog.lido.fi) was passed and enacted. ### TLDR - Anyone can now participate and submit their first validator key with just 2.4 ETH as [bond](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-e4a6daadca12480d955524247f03f380), (those joining who are on the EA List can still submit their first one with just 1.5 ETH as [bond](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-e4a6daadca12480d955524247f03f380)). For subsequent validators, the required [bond](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-e4a6daadca12480d955524247f03f380) drops significantly to 1.3 ETH each. - The 12-validators-per-node-operator limit has been removed, enabling independent Node Operators to scale their contributions freely and strengthen their impact on network decentralization. - The module capacity has been increased to 2%, creating more room for independent operators to join, fostering greater diversification of the set of Node Operators using the Lido protocol. ### What is CSM? CSM is the first permissionless module in the Lido on Ethereum protocol, enabling any node operator - particularly community stakers, including independent stakers and home stakers, etc - to use the protocol to run validators by supplying an ETH-based [bond](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-e4a6daadca12480d955524247f03f380). Designed to lower entry barriers, it empowers a broader range of operators to directly contribute to Ethereum’s security and constitutes a worthwhile proposition both for novice as well as experienced node operators. ### Why Ethereum-Aligned Individuals Should Run CSM Validators Running validators using CSM presents a unique opportunity for Ethereum supporters to actively contribute to the decentralization and security of both the network and the Lido protocol, with lower capital and technical requirements compared to traditional solo staking and other independent-staking enabling protocols. 1. Further decentralizing the Lido protocol: Greater participation from community stakers running validators through CSM contributes to a larger, more distributed set of Node Operators and validators, further enhancing the protocol’s decentralization, resilience, and security. 2. Additional Reward Use Cases for Independent Operators: Existing independent operators, such as vanilla stakers, DVT cluster members, or users of CSM-like solutions, can seamlessly operate CSM validators on their current infrastructure with minimal effort. Once their validators get deposited, they can potentially receive enhanced rewards for their idle ETH or staked ETH. 3. Accessible Entry Point for New Stakers: For those who previously refrained from staking due to the 32 ETH requirement, CSM offers a more attainable entry point with only 2.4 ETH needed. 4. Upskilling and Ecosystem Understanding: By joining CSM, participants in the Ethereum ecosystem gain valuable insights into the inner workings of Ethereum staking by operating a validator. This process deepens their understanding of Ethereum's core components while enabling them to potentially receive rewards comparable to those offered by DeFi protocols. ### Early Adoption Benefits Are Still There Even with the permissionless transition, existing Early Adoption members, as well as new CSM joiners whose address is in the EA list, retain the benefit of a discounted [bond](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-e4a6daadca12480d955524247f03f380) amount of 1.5 ETH for their first CSM validator. ### What Has Happened Since Mainnet Launch? The CSM mainnet launched around three months ago, on October 25, 2024, displaying remarkable growth during the Early Adoption phase: - [330+ independent Node Operators](https://operators.lido.fi/module/3?ref=blog.lido.fi) joined CSM, increasing the overall count of Node Operators using the Lido protocol to 500+. - CSM now constitutes \~0.65% of the Lido protocol‘s TVL with \~2,000 active validators. In addition to the portion of Simple DVT (i.e. 1.81%), approximately 2.5% of ETH staked via the protocol is staked with community stakers. - 470+ validator keys are ready for ETH deposit, representing around 15,000 ETH that would further be staked with likely independent stakers. - CSM Over Obol: [150+ Node Operators](https://docs.google.com/spreadsheets/d/1nEkSpxliKBgtV2NVftZc6S5VhKuDxC1dKIhDtPKUz4k/edit?gid=857310896&ref=blog.lido.fi#gid=857310896) have organized themselves to run CSM validators using Obol DVT. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXfPXNeLyat85eLvRrhOALGhP-_nV2gpspfDRAkohQHldq9ZkNvqLh9ffdAopUJnq6uOcCsNoE1j91qbFjozLqs_6Ny6SDBue-vM6cI5t-UFcHVL-TubcRQ4tGGM8YyVIhuHoICjlQ?key=snD2NuijJ6iRhvnrjcgih9H6) The growth of CSM is inseparable from the strong community engagement and contributions. - Through [the Lido Community Lifeguards Initiative](https://research.lido.fi/t/lido-community-lifeguards-initiative/4678?ref=blog.lido.fi), the Community Lifeguards have been engaging with communities and individuals worldwide to share educational content about community staking. This has increased interest among existing Ethereum users, contributors, and new explorers in becoming node operators, directly impacting modules like SDVT and CSM. - [Lido Community Staking Tribes Initiative](https://research.lido.fi/t/egg-establishing-the-community-lifeguards-initiative-cli-sub-committee/7527/17?ref=blog.lido.fi): This initiative was launched to onboard employees and contributors of Web3 organizations into Ethereum solo staking. The first organization to participate was [Drop](https://x.com/dropdotmoney?ref=blog.lido.fi), with four contributors in the process of becoming community stakers. - CSM has been integrated into solutions such as [DappNode](https://docs.dappnode.io/docs/user/staking/ethereum/lsd-pools/lido/?ref=blog.lido.fi), [eth-docker](https://ethdocker.com/?ref=blog.lido.fi), [EthPillar](http://ethpillar.coincashew.com/?ref=blog.lido.fi), [Nethermind Sedge](https://docs.sedge.nethermind.io/docs/quickstart/staking-with-lido?ref=blog.lido.fi), and [Stereum](https://stereum-dev.github.io/ethereum-node-web-docs/docs/installation/tutorial-guides/node-operation/lido/lido-csm?ref=blog.lido.fi) to make it easier for operators to spin up, manage and monitor CSM validators. ### What’s Next? The CSM journey is far from over. Alongside permissionless entry, CSM contributors are hard at work on coming up with proposals for improving CSM to continue to reduce barriers to entry, enfranchise independent stakers, and drastically increase the percentage of stake operated permissionlessly via the Lido protocol. Community involvement is essential for this, so be sure to participate in figuring out what lies ahead in CSM v2 by joining the [research forum](https://research.lido.fi/?ref=blog.lido.fi) or D[iscord](https://discord.com/channels/761182643269795850/1171819964357951498?ref=blog.lido.fi)! Stay tuned for more updates! --- *Disclaimer: Network staking rewards are not guaranteed, vary and are dictated by the rules of the method for validating transactions, which are developed independently by the developers of each specific blockchain network and are not subject to modification by any liquid staking protocol. Past performance is not a reliable indicator of future results.* ### Aave v3.2 Liquid eModes: Now On Base & Arbitrum URL: https://blog.lido.fi/aave-v3-2-liquid-emodes-now-on-base-arbitrum/ Last updated: 2025-01-20T14:00:26.000Z Following the strong adoption of the [Lido Protocol - Aave isolated market](https://app.aave.com/reserve-overview/?underlyingAsset=0x7f39c581f595b53c5cb19bd0b3f8da6c935e2ca0&marketName=proto%5Flido%5Fv3&ref=blog.lido.fi) on Ethereum mainnet, 3.2 liquid eModes are expanding to Layer 2 networks, beginning with [Base](https://www.base.org/?ref=blog.lido.fi) and [Arbitrum](https://arbitrum.io/?ref=blog.lido.fi). These markets provide users with new use cases to utilize LRTs as collateral for borrowing wstETH and implementing DeFi use cases with third-party rewards, while also taking advantage of reduced gas costs on L2s. ## **What's New?** Users can now access new DeFi use cases through 3.2 liquid eModes on Base and Arbitrum, each offering unique third-party rewards and strategy possibilities - from staking and restaking auto-compounded rewards, to efficient points farming. By providing LRTs as collateral to borrow wstETH, users can leverage third-party rewards and benefits within each isolated eMode loop. ## **Expanding DeFi Use Cases** Each pair leverages Aave v3.2's Liquid eModes feature to enable new DeFi use cases. On Base and Arbitrum, these markets create dedicated environments for LRT-wstETH, with parameters optimized for their use cases. Users can access: - Supply and borrow rewards maximisation specific pairs. - Third-party rewards unique to each network. - Recursive use cases through automated management platforms. ## **Why Aave v3.2 on L2s?** The new pair isolation on L2 networks offer the same unique use cases introduced on mainnet while adding new benefits. Users can access new DeFi use cases and rewards on their favorite L2 while managing positions with reduced gas fees and faster transaction confirmations. These improvements maintain Ethereum's security foundation while enabling cost-effective position management. Base offers an optimized experience with some of the lowest gas fees in the ecosystem, while Arbitrum provides access to a mature L2 environment with deep liquidity and extensive DeFi integrations. As on Ethereum mainnet, DeFi automation platforms provide tools to help execute and maintain recursive positions automatically, streamlining the experience for users. ## **What are Aave Liquid eModes?** Aave v3.2 introduces Liquid eModes, a feature allowing wstETH to be eligible for multiple efficiency modes (eModes) simultaneously. For users, this means wstETH can now be used across different market configurations with optimized parameters for each use case. For more information on Liquid eModes, check out the article here: [*‘Aave v3.2: Liquid Emodes’*](https://governance.aave.com/t/bgd-aave-v3-2-liquid-emodes/19037?ref=blog.lido.fi)*.* ## **Getting Started** You can utilize these use cases either directly through Aave or through automated platforms: ### Through Aave 1. **Choose Your Network** - Visit [app.aave.com](https://app.aave.com/?ref=blog.lido.fi) or your preferred DeFi management platform - Select Arbitrum or Base markets - Connect your wallet and switch network based on market of choice - Ensure you have LRT tokens ready or bridge 2. **Transfer Your Collateral** - Transfer your LRT tokens as collateral - Benefit from third-party incentives 3. **Borrow wstETH** - Activate Emode. Learn more on [*‘Aave v3: Efficiency Mode (Emode)’*](https://aave.com/help/borrowing/e-mode?ref=blog.lido.fi). - Borrow wstETH against your LRT collateral - Benefit from third-party incentives ### Automated Platforms **DeFi automation platforms provide streamlined access to:** - Recursive borrowing use cases - Auto-compounded rewards - Position health monitoring These platforms can handle the entire process from initial transfer to execution, often accepting ETH, stETH, or LRTs directly. ## **Looking Ahead** The expansion of wstETH liquid eModes continues with: - Additional L2 network markets - New LRT collateral options - More third-party incentives ## **Join the Conversation** Share your experiences, strategies, and insights with the community on [Twitter](https://x.com/LidoFinance/?ref=blog.lido.fi), [Discord](https://discord.com/invite/lido?ref=blog.lido.fi), and [Telegram](https://t.me/lidofinance?ref=blog.lido.fi). Follow our social channels to stay updated on the latest developments. ### Simple DVT: SSV Testnet #4 Results URL: https://blog.lido.fi/simple-dvt-ssv-testnet-4-results/ Last updated: 2026-05-07T08:20:31.000Z The final phase of the Lido x SSV [Simple DVT](https://operatorportal.lido.fi/modules/simple-dvt-module?ref=blog.lido.fi) testnet ended, with the validator set surpassing all of the minimum aggregate requirements to be considered eligible to move to mainnet! This was the 4th Lido x SSV trial enabling Node Operators to use the Lido protocol on Holesky to run validators with SSV-based Distributed Validator Technology (DVT). Following the success of the testnet, a [proposal has also been made](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/84?u=kimonsh&ref=blog.lido.fi) on the research forums to the DAO with the suggested list of participants to move forward to mainnet for SDVT SSV Cohort 3. ## **About Simple DVT** Today, the [Simple DVT Module](https://operatorportal.lido.fi/modules/simple-dvt-module?ref=blog.lido.fi) (SDVTM) for Lido on Ethereum consists of a total of 67 clusters, with 36 normal Obol Clusters and 21 normal SSV clusters. Additionally, there are 5 Simple DVT Super Clusters with the allowance to run more validators per cluster. For more information on Super Clusters, [read the forum post here](https://research.lido.fi/t/proposal-expanding-the-simple-dvt-module/7549?ref=blog.lido.fi). Overall, the SDVTM clusters are running over 5,400 validators and are expected to reach \~ 12,000 or 4% of the Lido on Ethereum share by Q2 2025\. Furthermore, to date, Simple DVT has led to the onboarding of 235 net-new Node Operators to Lido on Ethereum, including 144 solo and community stakers. Following this onboarding round, over 300 net-new Node Operators are expected to utilize the Lido on Ethereum protocol to run validators through the Simple DVT Module. Another initiative related to the Simple DVT Module is the Decentralized Validator Vault, implemented by [Mellow](https://mellow.finance/?ref=blog.lido.fi) with provider incentives from SSV Network, Obol, and Mellow. Its goal is to boost the number of Distributed Validators (DVs) active in the Simple DVT Module, advance the decentralization and resilience of the Lido on Ethereum node operator set, improve network security, and allow stakers to receive DVT provider incentives in the form of points. For more details, please [read the blog post here](https://blog.lido.fi/decentralized-validator-vault-mellow-obol-ssv/). ## **Lido & SSV Testnet: Overview** ### Participant Distribution The 4th Lido x SSV trial started in August 2024 on the Holesky testnet, with 192 total participants including over 53 solo stakers, 28 community stakers, as well as 80+ and professional node operators. Participants were split into 24 clusters of 7, with an effort to minimize geographic related latency and achieve a diversity of infrastructure types (e.g. bare metal servers, home machines, and public cloud). At the aggregate level, participants ran nodes from 27 countries across North & South America, Europe, Asia, Africa and Australia. ![](https://blog.lido.fi/content/images/2025/01/Simple-map.png) ### The Process Participating clusters started the process by submitting a verified “Individual Manager Address'', used for signing messages in the Protofire Safe and SSV webapp, and an optional “Individual Reward Address'' that participants could choose to receive validator rewards in lieu of their Individual Manager Address. Next, clusters proceeded with choosing a “Cluster Coordinator”, a participant that would be responsible for creating their Safe multi-sig and initializing the Distributed Key Generation (DKG) ceremony for each cluster. Each cluster’s SAFE consisted of a 5/7 threshold, and represented their cluster in the Lido Node Operator registry on Holesky. Once completed, Cluster Coordinators created their respective cluster Safes and their Node Operator entries were created. Thus began the node setup process. In SSV, each participant is responsible for registering as an Operator on the SSV Network, running an SSV Node (which also serves as their validator client), and operating a DKG Node. Once the setup was complete, the Cluster Coordinator initiated the DKG ceremony. After the ceremony was successful, the Coordinator started the process to register the validators to the SSV smart contracts for their cluster participants to sign in the Safe, which also included setting a spend approval for SSV tokens and updating of the cluster Fee Recipient to the Lido Execution Layer Rewards Vault on Holesky. When the clusters completed the signing process and verified the correct validators were registered to their respective clusters, they proceeded with starting the process of submitting their validator keys to the Lido Node Operator registry, which then also required verification from the cluster participants. Soon after, the Lido Simple DVT Module Committee on Holesky raised the key limits for the clusters, and an initial 20 validators were activated. During the following weeks, performance metrics for Uptime and Attestation Effectiveness showed generally promising results, and the clusters proceeded to register and submit 80 additional validators, bringing the total to 100 active validators for most clusters. To test running a larger number of validators, two of the clusters reached 420 active validators. During the trial, the SSV Network underwent a major protocol upgrade via hard fork, known as [the Alan Fork](https://ssv.network/blog/technology/meet-alan-the-ssv-network-scaling-upgrade/?ref=blog.lido.fi). This fork introduced improvements to node resource utilization, bandwidth consumption, and other optimizations. In preparation for the testnet fork on October 8th, cluster participants needed to update their nodes to the latest version of the SSV node. Due to some last minute updates, the SSV Labs team released a new node version on the eve of the scheduled fork. This required participants to react quickly and update their nodes to the new version. After the fork, [an analysis](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/63?ref=blog.lido.fi) by the SSV Labs team confirmed that none of the clusters were negatively impacted and that their performance remained unaffected. The analysis showed significant reductions in resource usage for machines running the SSV nodes: - **CPU usage**: decreased by 75.62% - **RAM usage**: decreased by 23.19% - **Receive bandwidth**: decreased by 71.26% - **Transmit bandwidth**: decreased by 70.47% Finally, to conclude the trial, the clusters exited their validators and successfully tested the rewards claiming flow. ## **Performance Results** ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXei8w8hyNk4HxgjOzWi-vnxJ0MYtGkxBhGys_ED-fMZHJ8PN0LJ6_eLoJBdeCydYoxFui0kW-mxXFG7gd1FzKJUjZGC4UInt2qWTSkB4TCwn6n5Pj_xE3WLR9YK6BWtrTJ49LIiDw?key=q9SfHwBA-fZHMNrZsaZ95iG8) ### SSV Cluster Aggregate Results As seen in the image above, the aggregate metrics for this Lido x SSV trial surpassed all of the Minimum Testnet Success Characteristics outlined in the Simple DVT Module Proposal, with 97.04% Uptime, 80.36% Attestation Effectiveness, and a 92.86% Block Proposal Success Rate (all metrics per [Rated](https://explorer.rated.network/?network=holesky&view=nodeOperator&timeWindow=1d&page=1&pageSize=15&ref=blog.lido.fi)). In addition, outside of Block Proposals, SSV cluster performance also surpassed the tracked aggregate average for the entire Holesky network. ### Cluster Results At the cluster level, 18/24 clusters surpassed the Uptime Benchmark, 20/24 surpassed the Attestation Effectiveness benchmark, and 24/24 surpassed the Block Proposal Success rate benchmark. **All in, 75% of clusters, or 18/24, surpassed all of the observed required benchmarks.** ### Participant Performance While specific participant performance will not be discussed in this blog post, there is an important point to note: participants in clusters that did not reach the minimum performance benchmarks are not automatically excluded from moving forward to mainnet. In many cases, these clusters contained a majority of Node Operators who were highly cooperative within their clusters, responsive to updates and testing requirements, and whose nodes were performant. ![](https://blog.lido.fi/content/images/2025/01/Simple-charts3_1.png) ![](https://blog.lido.fi/content/images/2025/01/Simple-charts3.2.png) ![](https://blog.lido.fi/content/images/2025/01/Simple-charts3_1_1.png) ## **Path to Mainnet** Following the posting of the LNOSG suggested shortlist of participants to the forums, the DAO will have one week to discuss the proposal and state any objections. If no objections arise, clusters will begin the coordination process and the Simple DVT Module Committee will commence Easy Track motions (which can be rejected by LDO token holders) to register the clusters on the Lido Simple DVT Module registry. At this time, no further Simple DVT Module onboardings are scheduled, but ultimately this is up to the community to determine. The Simple DVT Module has demonstrated that the use of DVT is scalable on mainnet and successfully onboarded the first solo and community stakers to the Lido protocol. With the addition of SSV Cohort 3, by February 2025 the Lido protocol is on track to enable over 500 independent Node Operators to run validators across the Simple DVT Module, Community Staking Module, and Curated Module. ## Appendix: SSV Testnet #4 Participants - **Cohort 1**: AXBLOX, Block Farms, pipsqueecs, ProofGroup, spud, Stefan, Tessier-Hashpool - **Cohort 2**: atomicwhale, Blockshard, DenverParaFlyer, Fiews, rs3der, Stake DxPool, Stakecat - **Cohort 3**: Ben Chan, ContributionDAO, Girnaar Nodes, kongheyfatchoy, p10node, rick, TWM - **Cohort 4**: BlockNth, Blockblaz, ChainUp, Kingnodes, Next Finance Tech, rylos, Uwium - **Cohort 5**: AussieStake, KudasaiJP, LinkRiver, mmthellman, Nodeinfra, Provalidator, Tané - **Cohort 6**: 0NEinfra, CrisOG, enti, Garik, StableLab, Sub7 Security, Thoma Technologies LLC - **Cohort 7**: AstroCat, CryptoBoru, Cryptonative Systems, GRASSETS TECH, Mrs\_ml, Restake, Viacheslav Smirnov - **Cohort 8**: baoquoc1998, CertHum, glcstaked, Igor, kotiki, lux8.net, STAKR.space - **Cohort 9**: Andersen, anvel, ChainLabo, ChainOps Russia, CryptoCrew Validators, flisko, natalia\_256 - **Cohort 10**: Attestant BVI, humpyy.eth, Kukis Global, NORTHSTAKE, RHINO, RockLogic GmbH, TXTiger - **Cohort 11**: bountyblok, jeffjack, MasterYarik, Nodes International, StakeCat, StakeValid, stufez - **Cohort 12**: alexeyshkittin, Artifact Systems, crimson1, Natalia, Piconbello, ThomasBlock.io, tommylowe90 - **Cohort 13**: chainwizard94, ContributionDAO, Daniil, Khanhwizardpa | p10node, stakefish, Stake Village, Validatrium - **Cohort 14**: Anvil Finance, Blockops Network, LinkPool, Ponkila Oy, Professor Parpinsons, Staking4All, zheli - **Cohort 15**: Bablovcoin, claire1284, GRASSETS TECH, rodion007, starnodesxyz, Syncnode, ValiDAO - **Cohort 16**: cgero.eth, efa1994, Imperator.co, KT10, Mach5 Validators, smartinvest.eth, yura\_zp - **Cohort 17**: Amamu, Albinos, khanami.eth, leadparachutes, NodeSoda, Stakesaurus, ValidBlocks - **Cohort 18**: 5quat, AJ | Alex Ma, BlockNth, Ethernodes, igorzp60, Maxim Tarasenko, Provalidator - **Cohort 19**: 79anvi, BlockWrangler, DELIGHT LABS, dimkatoy, marisarze, Oneplus, zdec6kit - **Cohort 20**: antotg, ethdog, Imperator.co, minibella333, pWse, ShalomGH, Shimbob | Stakecat - **Cohort 21**: Gorbako, Jirzy, mrman08667, nova, starArsonist, StakeCat, vinsystems - **Cohort 22**: Chainbase Staking, CryptoCrew, DeeNode, Herman | IdeaSoft, pav3g, SyncX, swiftstaking - **Cohort 23**: 0xDonPepe, ariiellus, Brichis, Chuy, CryptoReuMD, Karen84, Salvador - **Cohort 24**: AlexIT, BlockPI Network, hereWeGo, luciolaKami, Monika, Openbitlab, Shadon ### Crypto Finance Enables stETH Custody & Staking URL: https://blog.lido.fi/crypto-finance-enables-steth-custody-staking/ Last updated: 2025-05-28T14:59:54.000Z [Lido Institutional](https://lido.fi/institutional?ref=blog.lido.fi) contributors are excited to announce that [Crypto Finance AG](https://www.crypto-finance.com/?ref=blog.lido.fi) has integrated with Lido, enabling ETH liquid staking for its wallet infrastructure clients. Through this integration, Crypto Finance’s clients can leverage Lido’s liquid staking token (stETH). This development underscores Lido’s rapid growth in expanding access to institutional users. Institutions now have a regulated partner to securely stake and access stETH, enabling seamless integration of stETH into their investment strategies: - **Safeguard stETH holdings**: Benefit from a compliant custody environment tailored for institutional needs. - **Unlock liquidity**: Make use of stETH’s secondary liquidity to maintain staking rewards while preserving staked amount flexibility. No minimum staking amount required. - **Engage in DeFi**: Explore a wide range of DeFi use cases using stETH. > "*As part of the Deutsche Börse Group, we are dedicated to setting industry standards for security and innovation in digital asset services. The integration of the Lido Protocol into our wallet solution is a significant step in meeting the needs of our institutional clients." Stated* [Kasper Luyckx](https://www.linkedin.com/in/kasperluyckx?ref=blog.lido.fi), Head of Wallet Infrastructure & Staking Services at Crypto Finance AG. > *“This integration with Crypto Finance creates new pathways for institutions to access Ethereum staking. By using the Lido protocol middleware, clients can take advantage of stETH’s liquidity and flexibility, helping to bridge the gap between decentralized technology and traditional finance,”* added [Kean Gilbert](https://www.linkedin.com/in/keangilbert/?ref=blog.lido.fi), Institutional Relations Contributor to Lido DAO. ### **About Crypto Finance** Crypto Finance Group, part of Deutsche Börse Group, provides professional digital asset solutions to institutional clients. The Group comprises of Crypto Finance AG, regulated by FINMA in Switzerland, which offers trading, custody, and wallet services, as well as Crypto Finance (Deutschland) GmbH, regulated by BaFin in Germany, which offers trading and custody. Crypto Finance AG is a SIX approved crypto custodian for ETP issuers. For further information please visit crypto-finance.com. ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido protocol’s open-source, liquid staking middleware by non-retail users. Lido middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, please visit lido.fi/institutional --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Finoa Enables Custody Support of stETH URL: https://blog.lido.fi/finoa-enables-custody-support-of-steth/ Last updated: 2025-05-28T15:00:11.000Z [Lido Institutional](https://lido.fi/institutional?ref=blog.lido.fi) contributors are pleased to announce that [Finoa](https://www.finoa.io/?ref=blog.lido.fi), a European digital asset custodian, has added support for Lido protocol’s Staked ETH (stETH) and Wrapped Staked ETH (wstETH), further enhancing the accessibility and security of liquid staking token custody for institutional clients. ## **What This Means for Institutional Users** Finoa’s addition of stETH to its custody offering marks an important milestone for institutional adoption of liquid staking. Institutions now have a regulated partner to store stETH, enabling seamless integration of Lido protocol’s liquid staking token into their investment strategies. With Finoa’s custody services, institutions can: - **Safeguard stETH holdings**: Benefit from compliant custody solutions tailored for institutional needs. - **Streamline operations:** Access Finoa’s intuitive platform for efficient asset management. - **Unlock liquidity:** Make use of stETH’s unique properties to maintain staking rewards while preserving flexibility of the staked amount. ## **Driving Institutional Adoption of stETH** The integration of stETH into Finoa’s custody suite is making liquid staking token custody accessible and practical for institutional users. By collaborating with regulated custodians like Finoa, institutions can participate in Ethereum liquid staking. stETH has already gained significant traction among institutional users due to its ability to combine staking rewards with liquidity. With Finoa’s support, more institutions can now integrate stETH into their portfolios, unlocking new opportunities in decentralized finance. ## **Looking Ahead** As more institutions recognize the benefits of stETH, Lido Institutional contributors will continue to work with partners to expand access and support. To learn more about Finoa’s custody services for stETH, visit[ Finoa’s website](https://www.finoa.io/?ref=blog.lido.fi) or for further information, please visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Simplifying stSOL Withdrawals URL: https://blog.lido.fi/simplifying-stsol-withdrawals/ Last updated: 2025-01-09T20:31:29.000Z Contributors to Lido DAO are pleased to share that a [new dedicated web interface](http://stsol.nansen.ai/?ref=blog.lido.fi) is now available to simplify the stSOL withdrawal process, developed by Nansen to support users following the Lido on [Solana sunsetting announcement](https://blog.lido.fi/sunset-lido-on-solana/). ## **What's New** Starting today, a new user-friendly interface at [stsol.nansen.ai](http://stsol.nansen.ai/?ref=blog.lido.fi) will make withdrawing stSOL accessible to all users, regardless of technical experience. This solution addresses community feedback about withdrawal accessibility. Through this interface, users can either withdraw their SOL completely or choose to restake with Nansen to continue getting network validation rewards. ## **Why This Matters** Since the discontinuation of the [Lido on Solana frontend](https://lido.fi/solana?ref=blog.lido.fi) in February 2024, users have needed technical knowledge of blockchain clients to withdraw their staked SOL. The new interface eliminates this barrier, ensuring everyone can easily access their cryptoassets through a straightforward web interface. ## **Timeline** - **January 9, 2025:** Launch of the new withdrawal interface - Interface will remain available to ensure all users can access their cryptoassets at their convenience. ## **Resources** - [How to withdraw stSOL](https://docs.solana.lido.fi/?ref=blog.lido.fi) (CLI or self-hosted widget) - [Lido on Solana sunset announcement](https://blog.lido.fi/sunset-lido-on-solana/) ### The Lido Community Staking Tribes Initiative URL: https://blog.lido.fi/lido-community-staking-tribes/ Last updated: 2026-08-26T15:16:03.000Z As part of [the Lido Community Lifeguards Initiative](https://research.lido.fi/t/lido-community-lifeguards-initiative/4678?ref=blog.lido.fi), a new initiative has been launched to transform employees and contributors of Web3 organisations - whether companies or DAOs - into Ethereum solo stakers. This will be achieved by empowering them to run validators using the Lido Community Staking Module (CSM). [Drop](https://x.com/dropdotmoney?ref=blog.lido.fi), a cross-chain liquid staking protocol and [Lido Alliance](https://research.lido.fi/t/lido-alliance-an-ethereum-aligned-ecosystem/7475?ref=blog.lido.fi) Member, will be the first organisation to participate in this initiative, with [Dappnode](https://dappnode.com/?ref=blog.lido.fi) as the staking hardware provider! ## How does it work? Through this initiative, participating Web3 organizations: 1. **Nominate contributors**: Select at least four employees/contributors to take part in the program. 2. **Provide staking hardware**: Furnish each of the participants with the necessary tools, such as custom co-branded Lido x Participating Organization staking hardware. 3. **Upskill employees/contributors**: Participants will receive comprehensive training from the Lido Community Lifeguards, in collaboration with hardware providers, through workshops and ongoing support channels, enabling them to become proficient Ethereum solo stakers. 4. **Leverage co-marketing opportunities**: Showcase the participating organisation’s commitment and contribution to enhancing Ethereum's decentralization through co-marketing campaigns. ## Benefits for Participants 1. **Enhance community recognition** of direct contributions to Ethereum security through collaborative marketing campaigns and tailored co-branded staking hardware providers. 2. **Upskilling participants.** Because Proof of Stake rewards generated from Ethereum validators underpin a large part of the DeFi space, actually knowing “how the sausage is made” will provide employees and contributors better perspectives of the customers & communities they engage with. 3. **Tap into potential boosted staking rewards** of the Lido Community Staking Module (CSM), a benefit for participants who adhere to the CSM [rules](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-3951aa72ba1e471bafe95b40fef65d2b). ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXe3S5n_mWIPWthN80rYM5-GI5pZw46IP1qJdpGBHBqjt_QKVO-I_Ccfio9sgQVTqv814N_cWXTtheMQZkfyCykhSzKIRoQEXx8WPfWnW53Vw1bta227JyfRbJrdve1ejHB3YD8B?key=IYAFf0nlj6yvOT4bzLcnsGiU) ## Who is this for? This initiative is perfect for: - **Web3 organizations** that directly benefit from increasing the number of solo stakers or plan to stake their ETH. - **Ethereum-aligned teams** who want to help kickstart a flywheel that introduce new solo stakers continuously to Ethereum - the very foundation upon which their businesses are built. - **Organizations seeking innovative ways** to upskill and incentivize contributors. ***Fill in*** [***this form***](https://forms.gle/JDYHQLCVUDZFHFSL7?ref=blog.lido.fi) ***if you are interested to be part of the next cohort starting in Q1’25 and contributors acting as Lido Community Lifeguards will be in touch!*** ## Motivations ### 1\. Hardware cost is the greatest hurdle to solo staker adoption today The two main sources of capital requirements for solo stakers are ETH capital and hardware costs, with cost of reliable suitably fast internet coming in at a close second. Bonded validators reduce the minimum ETH capital requirements for solo staking and [potentially increase staking reward rates](https://docs.google.com/spreadsheets/d/17mEuaI8ui-pmTTwev1FFIhch1X90HefpDB65kKyXDUU/edit?gid=0&ref=blog.lido.fi#gid=0&range=D27). For instance, with CSM, Node Operators eligible for the Early Adoption program need to provide only 1.5 ETH as bond collateral to run their first validator - one of the lowest capital requirements in the marketplace. However, hardware costs remain a challenge for new independent operators, as they typically range from the equivalent of 0.2 to 0.5 ETH (based on the ETH price at the time of writing). This represents a 13% to 33% increase in capital requirements, measured in ETH, to spin up the first Ethereum validator with the minimum necessary resources. This means that the adoption of solo staking via bonded validators may only make sense for affluent individuals and largely exclude more diverse regions. ### 2\. Hardware is not just hardware; it’s a gateway into the Ether Once aspiring solo stakers get their hands on decent hardware however, many possibilities open up to them. A single set of solo staking hardware is both vertically and horizontally scalable - capable of running hundreds of validator keys across various validator configurations such as Distributed Validators Technologies or DVTs (e.g., Obol and SSV) and Bonded Validators (e.g., Lido CSM). This exposes solo stakers to more use cases and may make it more worthwhile than delegating their stake. For this reason, getting solo staking hardware into the hands of aspiring stakers is considered the most impactful factor in fostering new solo stakers on Ethereum. ## Inspirations This initiative draws inspiration from[**#Teamstaking**](https://blog.aragon.org/kicking-off-the-teamstaking-program-with-dappnode/?ref=blog.lido.fi), a similar program led by Aragon and Dappnode earlier this year. By working with Web3 organisations, this initiative aims to address the final barriers to solo staking adoption for their employees or contributors, such as hardware costs. While hardware may seem expensive for individuals, it remains accessible to Web3 organizations seeking to upskill contributors and signal their Ethereum alignment. Overall, the initiative is essentially a learning & development plus a co-marketing opportunity while actively contributing to the security of Ethereum where you are building. ### Lido on Polygon Sunset URL: https://blog.lido.fi/lido-on-polygon-sunset/ Last updated: 2025-06-05T15:20:17.000Z Over the coming months, [Lido on Polygon](https://lido.fi/polygon?ref=blog.lido.fi) will be effectively discontinued. After extensive [DAO forum discussion](https://research.lido.fi/t/reevaluation-of-lido-on-polygon-state/8848?ref=blog.lido.fi) followed by a [community vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x2f745cb0147791cf656ab292f872f8277ff9df5c9585dbc6622dbda88362d402), the sunsetting of the Lido on Polygon protocol was requested by LDO token holders and this process will begin shortly. Below you will find a breakdown of the reasoning of the sunsetting, as well as key timelines and required actions for stMATIC token holders. For more information, visit [help.lido.fi/en/collections/3631122-polygon-matic-staking](https://help.lido.fi/en/collections/3631122-polygon-matic-staking?ref=blog.lido.fi) ## **Sunsetting Justification** [Lido on Polygon](https://lido.fi/polygon?ref=blog.lido.fi) began with a [proposal submitted by Shard Labs ](https://research.lido.fi/t/lido-for-polygon-proposal-by-shard-labs/816?ref=blog.lido.fi)in 2021\. While initial expectations were high, Lido on Polygon has faced significant challenges in achieving its intended impact. Several factors have contributed to this situation: limited user adoption, insufficient rewards, resource-intensive maintenance requirements, and evolving ecosystem dynamics. A key challenge has been the shifting landscape of DeFi activity, particularly with increased focus on zkEVM solutions. This transition has led to reduced demand for liquid staking solutions on Polygon POS, affecting Lido on Polygon's potential as a foundational DeFi building block. Additionally, alternative liquid staking solutions have been built within a ecosystem that proved smaller than initially anticipated. These developments, combined with the LDO token holders’ strategic refocus on Ethereum as outlined in recent [GOOSE](https://research.lido.fi/t/the-guided-open-objective-setting-exercise-goose-proposal-a-genesis-step-to-jump-start-a-dao-wide-goal-setting-exercise-and-cadence/5355?ref=blog.lido.fi) and [reGOOSE](https://research.lido.fi/t/regoose-updated-goals-for-lido-in-the-light-of-mvi-and-restaking/7462?ref=blog.lido.fi) governance decisions, have prompted a thorough reevaluation of Lido protocol's presence on Polygon. After extensive evaluation and a governance vote by LDO token holders, the decision was made to begin the sunsetting process for Lido on Polygon. For more insights into the decision-making process and discussion, please refer to the forum post: [research.lido.fi/t/reevaluation-of-lido-on-polygon-state/8848](https://research.lido.fi/t/reevaluation-of-lido-on-polygon-state/8848?ref=blog.lido.fi) ## **Implications for Users** - **Discontinued Rewards**: stMATIC holders will stop receiving network rewards throughout the sunsetting process. - **Pre-Sunset Pause**: The protocol will temporarily pause on Monday, February 3rd, and then resume operations on February 10th. No withdrawals can be processed until after the protocol resumes. - **Withdrawal Process**: Users can unstake their MATIC through the [Lido on Polygon frontend](https://polygon.lido.fi/?ref=blog.lido.fi) until June 16, 2025. - **Post-Sunset Access**: After June 16, 2025, withdrawals will remain possible through explorer tools. Unstaking instructions can be found [here](https://docs.polygon.lido.fi/how-lido-on-polygon-works?ref=blog.lido.fi#unstake-tokens). ## **Key Dates** - **December 16, 2024**: Lido on Polygon staking will be discontinued and no new stake will be accepted through the UI. - **December 16, 2024 - June 16, 2025**: A six-month transition period during which users can withdraw through the Lido on Polygon UI. - **February 3-10, 2025**: Protocol will temporarily pause and then resume operations. No withdrawals can be processed during this period. - **June 16, 2025**: Frontend support concludes. After this date, withdrawals will only be possible through explorer tools. [Check the following guide to unstake.](https://help.lido.fi/en/articles/11516998-guide-withdrawing-stmatic-for-matic?ref=blog.lido.fi) Stay connected through [Discord](https://discord.com/invite/lido?ref=blog.lido.fi), [Telegram](https://t.me/lidofinance?ref=blog.lido.fi), or [Twitter](https://x.com/lidofinance?ref=blog.lido.fi) for further updates regarding the sunsetting process. ### Stake stETH for Tokenized RWA Rewards URL: https://blog.lido.fi/stake-steth-for-tokenized-rwa-rewards/ Last updated: 2025-05-28T15:00:33.000Z The Verified Network, a decentralized network of financial services providers across Europe and Asia that enables the issuance, distribution, and servicing of tokenized products, today announced that it has enabled the use of Lido’s stETH. Lido is an open-source, liquid staking middleware, that provides a way to participate in the Ethereum and Polygon blockchain network validation process and get network staking rewards for this activity. Lido middleware lets users connect with node operators to stake their digital assets without the need to individually maintain hardware, as well as interact with various third-party DeFi applications that have independently integrated and support stETH or stMATIC. Verified Network’s integration now allows Ether holders to access Lido’s liquid staking middleware through web and mobile applications to get network staking rewards, as well as the ability to restake stETH and get rewards from tokenized real world assets (RWAs). > **Chirag Shah**, Founder of Nucleus Commercial Finance, a UK-based business lender which is offering a tokenised bond on the Verified Network, said “I am thrilled that Nucleus is the first to adopt this structure in the UK by using Lido’s staked Ethereum (stETH). Being the first in the UK to use tokenized RWA’s is a huge step in the right direction.” ### **About the Verified Network** The Verified Network is a decentralized financial services network that is deployed as permissioned, public blockchain contracts used for the issuance, distribution and servicing of tokenized products by licensed financial services providers such as registrars, transfer agents, custodians, brokerages and market makers. For further information, please visit [www.verified.network](https://www.verified.network/?ref=blog.lido.fi). ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido’s middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, please visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favouring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Lido on Starknet URL: https://blog.lido.fi/lido-on-starknet/ Last updated: 2024-12-05T15:54:54.000Z ### wstETH is now available on Starknet wstETH is live on [Starknet](https://www.starknet.io/?ref=blog.lido.fi), allowing users to bridge their staked ETH and use it within the Starknet ecosystem. This deployment marks a significant step in Lido protocol's multichain use cases, promoting broader adoption of wstETH across various Layer 2 networks. ➡️ Bridge your wstETH to Starknet using StarkGate: [starkgate.starknet.io](https://starkgate.starknet.io/?ref=blog.lido.fi) ➡️ For tutorials & instructions: [Guide: Bridging to Starknet](https://help.lido.fi/en/articles/10233367-bridging-wsteth-to-starknet?ref=blog.lido.fi) ## **What is Starknet?** Starknet is a ZK-Rollup that operates as a Layer 2 network over Ethereum. Using STARK proof technology, Starknet processes transactions with reduced costs while maintaining Ethereum's security properties. As a validity rollup, it processes transactions off-chain and posts validity proofs to Ethereum, ensuring state transitions are computationally verified. For more information on Starknet, visit [starknet.io](https://starknet.io/?ref=blog.lido.fi). ## **Bridging to Starknet** Before using StarkGate bridge to transfer wstETH to Starknet, ensure you have: 1. A Starknet-compatible wallet (Argent X, Braavos). 2. ETH for gas fees on both networks. 3. wstETH tokens to bridge. To bridge your wstETH: 1. Visit [starkgate.starknet.io](https://starkgate.starknet.io/?ref=blog.lido.fi). 2. Connect both your Ethereum and Starknet wallets. 3. Select wstETH from the token dropdown. 4. Enter the amount you wish to bridge. 5. Approve the transaction and wait for confirmation. You can track your transaction status on both [Etherscan](https://etherscan.io/?ref=blog.lido.fi) and [Starkscan](https://starkscan.co/?ref=blog.lido.fi). ## **Why wstETH on Starknet** Deploying wstETH on Starknet provides: - **Access to Starknet DeFi Ecosystem:** wstETH can now be utilized in various third-party DeFi protocols on Starknet, expanding its utility. - **Enhanced Scalability:** Users can transact with lower fees and faster confirmation times compared to the Ethereum mainnet. ## **Network Recognition** The availability of wstETH on Starknet has been recognized by the [Network Expansion Committee (NEC)](https://research.lido.fi/t/establishing-the-network-expansion-committee/8788?ref=blog.lido.fi), which was recently established through [Snapshot vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x7cdf1af7cfeb472ae202c45fb6d7e952bb34bfcbc82113549986b2bc2d5f54c5) to evaluate and recognize stETH and wstETH protocol bridging endpoints and token denominations on new networks on behalf of the LDO token holders. This recognition aligns with NEC's mandate to streamline the process for expanding (w)stETH to new networks. ## **Explore stETH on L2 Networks** Explore Starknet and other supported networks in the Lido Multichain hub, where you can find technical specifications, protocol integrations, and network-specific guides: [lido.fi/lido-multichain](http://lido.fi/lido-multichain?ref=blog.lido.fi). In the future, expect stETH to be available across a number of new L2s to further enhance the utility of stETH. ## **Resources** - [Guide: Bridging to Starknet](https://help.lido.fi/en/articles/10233367-bridging-wsteth-to-starknet?ref=blog.lido.fi) - [StarkGate bridge overview](https://docs.starknet.io/starkgate/overview/?ref=blog.lido.fi) - [Lido Multichain](https://lido.fi/lido-multichain?ref=blog.lido.fi) - [Network Expansion Committee](https://research.lido.fi/t/establishing-the-network-expansion-committee/8788?ref=blog.lido.fi) ### stETH for ETP Issuers URL: https://blog.lido.fi/steth-for-etp-issuers/ Last updated: 2025-05-28T15:01:01.000Z The world of exchange-traded products (ETPs) is evolving rapidly, driven by investor demand for innovation, high-rewards, and accessible options. As Ethereum staking continues to grow in prominence, stETH, Lido protocol’s liquid staking token is emerging as an alternative for ETP issuers. By combining staking rewards with liquidity and utility, stETH offers a unique value proposition that can set ETPs apart in a competitive market. ## **Why is stETH different** ### **Staking Rewards** Ethereum staking traditionally involves a significant trade-off: investors can get staking rewards, but their staked ETH becomes locked and inaccessible. This lack of liquidity limits usability and can deter participation, particularly for those who value flexibility. Furthermore, redemption requests from native staking can face delays or uncertainties due to network withdrawal limits, adding another layer of complexity. [stETH](https://blog.lido.fi/steth-the-mechanics-of-steth/) eliminates these barriers by offering holders liquidity, accessibility, and exposure to staking rewards. It reflects the value of the staked ETH and accrued network staking rewards. These tokens are created upon staking and destroyed when redeemed, with balances adjusted daily based on oracle reports. Users can hold stETH, swap it, or deploy it in decentralized finance (DeFi) without relinquishing participation in Ethereum’s consensus mechanism (thus getting staking rewards) or worrying about unpredictable redemption timelines. By integrating stETH, issuers can offer unique products that benefit from Lido protocol’s middleware solution to get network staking rewards while avoiding the limitations of native staking. ### **Liquidity** stETH is the [most popular liquid staking token](https://dune.com/LidoAnalytical/Lido-Finance-Extended?ref=blog.lido.fi), and the Lido protocol is a prominent liquid staking protocol, with a \~$30bn TVL (Total Value Locked). Moreover, the validator network on Lido protocol is being actively decentralized, through initiatives such as Lido’s Community Staking Module (CSM) - a permissionless staking module aimed at attracting community stakers to participate in the Lido on Ethereum protocol as node operators. Follow the link for a detailed [overview and description of CSM](https://blog.lido.fi/lido-community-staking-an-overview/). ### **Accessibility** stETH is designed to be accessible , and is supported across major exchanges, DEXs, and institutional-grade custody solutions like [Fireblocks](https://blog.lido.fi/bringing-liquid-staking-to-the-fireblocks-network/), [Ceffu](https://blog.lido.fi/ceffu-enables-steth-custody-staking/) and [Taurus](https://blog.lido.fi/taurus-enables-steth-custody-staking/). This broad compatibility ensures that stETH can be easily integrated into ETPs, providing a seamless experience. Additionally, stETH boasts [deep liquidity across markets](https://dune.com/lido/wsteth-liquidity?ref=blog.lido.fi), which is crucial for maintaining smooth trading and ensuring investors can buy or sell their ETP shares with minimal friction. ### **Expanding ETP Utility with DeFi Integration** stETH isn’t just a receipt token — it can also be used with [various third-party DeFi applications](https://lido.fi/steth-in-defi?ref=blog.lido.fi) that have independently integrated and support it. Its compatibility with DeFi protocols enables innovative use cases that can enhance the utility of an ETP. For example, stETH could be used to enable collateralization, or other advanced use cases within the ETP structure. This flexibility future-proofs products built on stETH, allowing issuers to adapt and expand their offerings as the market evolves. ### **Differentiate Your ETP Offering** Incorporating stETH into an ETP isn’t just about providing exposure to Ethereum's staking rewards – it’s about differentiation. stETH offers unique benefits that traditional staking or other crypto assets can’t match, from liquidity and accessibility to DeFi utility. By integrating stETH, issuers can create products that may stand out in the crowded ETP market, attracting innovation-driven investors. [Contact Lido Institutional](https://share-eu1.hsforms.com/1J9K3wmpfTiSn6lO7UgqXWw2dywmt?ref=blog.lido.fi) to learn how stETH can differentiate your ETP offerings. --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favouring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### One Month of CSM Mainnet Adoption: A Look Back URL: https://blog.lido.fi/one-month-of-csm-a-look-back/ Last updated: 2026-06-03T21:03:22.000Z [The Lido Community Staking Module (CSM)](https://csm.lido.fi/?ref=blog.lido.fi) launched on mainnet just over one month ago. Let’s take a look at what’s happened and how CSM has been received by the Ethereum staking community 👇 ## What is CSM? CSM is a revolutionary addition to the Ethereum staking ecosystem, setting the stage to allow any node operator to use Lido on Ethereum to run validators in a permissionless manner. Designed to lower capital barriers, CSM makes it easier for individuals to contribute directly to Ethereum’s security while offering an appealing proposition for both new and experienced node operators. Node Operators supply a specially crafted ETH-based bond, submit their keys, and wait for stake allocation (32 ETH per validator) from the protocol, while running validators with full flexibility. Currently in Early Adoption mode, where likely solo stakers are able to join the module, contributors estimate that the module will become fully permissionless sometime in early 2025. ## CSM: General Statistics The first month of CSM has seen remarkable traction and adoption. Here are some key statistics from [the CSM dashboard](https://operators.lido.fi/module/3?ref=blog.lido.fi) during this period: - 214\* independent operators joined to run Ethereum validators through CSM. - CSM Node Operators managed 0.4% of the Lido protocol's TVL, operating 1225 active validators. - The total number of Node Operators in the Lido protocol increased by 80%, growing from 265 to 479 operators. *\*It is possible that some participants manage multiple operators through different addresses.* ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcploWazJrDqqM_lSDqcqeoZvfxp83Tdpe_wsuP3YEu7FqWshQewxAshLaHgrx2_UCD-Q91_CuxDdcq7jt6PuMpZSh8BDmnAzUSzDz2OsG4PXXEtzZFof3hAE0NQwwnsPvW8DBH6g?key=saYpy91yoRNhJsK2lj04_tRi) ## Performance & Reward Overview CSM validators performed admirably during their first month of operation. Here’s a breakdown of the performance highlights: - [The first Performance Report](https://ipfs.io/ipfs/QmezkGCHPUJ9XSAJfibmo6Sup35VgbhnodfYsc1xNT3rbo?ref=blog.lido.fi) was finalized, and rewards for the first frame (28 days) were successfully allocated. - The CSM’s attestation inclusion rate showcased strong uptime performance at 99.4%, close to the average network performance of 99.73%. - Of the 1,225 validators, 1,216 operated above the performance threshold of 94.73%, which is calculated as the average network performance minus the CSM performance leeway (5%). This means 99.2% of validators were eligible for Node Operator reward socialisation\*. - From the Node Operators’ perspective, only 2.2% of operators (i.e., 4 out of 182) were unfortunately not qualified for Node Operator rewards due to lower validator performance. However, even for Node Operators whose validators did not meet the threshold, their bonds continue to rebase, ensuring they still receive rewards unaffected by validator performance. *\*One of the innovative CSM features is reward socialization within the module via the use of a* [*Performance Threshold*](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-c6dc8d00f13243fcb17de3fa07ecc52c)*. In each claim frame, validators whose performance exceeds this threshold share in the rewards distributed by CSM. Validator performance is assessed based on the attestation inclusion rate, which is calculated as the number of included attestations divided by the total assigned attestations for that frame.* ## Community Contributions & Involvement The community has been instrumental in CSM’s early quick adoption. Here’s how: - **Tooling and Support**: Solutions like [DappNode](https://docs.dappnode.io/docs/user/staking/ethereum/lsd-pools/lido/?ref=blog.lido.fi), [eth-docker](https://ethdocker.com/?ref=blog.lido.fi), [EthPillar](http://ethpillar.coincashew.com/?ref=blog.lido.fi), [Nethermind Sedge](https://docs.sedge.nethermind.io/docs/quickstart/staking-with-lido?ref=blog.lido.fi), and [Stereum](https://stereum-dev.github.io/ethereum-node-web-docs/docs/installation/tutorial-guides/node-operation/lido/lido-csm?ref=blog.lido.fi) provided native support to help Node Operators seamlessly set up CSM validators on mainnet. - **Performance Tracking**: With the release of [Beaconcha.in V2](https://v2-beta-mainnet.beaconcha.in/dashboard?ref=blog.lido.fi), CSM Node Operators can now conveniently view their validator performance via direct links provided in [the CSM widget](https://csm.lido.fi/?ref=blog.lido.fi). Additionally, operators can track their overall performance using the RAVER score system on [Rated Network](https://explorer.rated.network/o/Lido%20Community%20Staking%20Module?network=mainnet&timeWindow=1d&viewBy=operator&page=1&pageSize=15&idType=poolShare&ref=blog.lido.fi). - **Grants & Initiatives**: The first round of Community Staking Grants was a success, and the Community Lifeguards Initiative sub-committee has launched a [second round](https://research.lido.fi/t/community-staking-grants-2-csm-tooling/8920?ref=blog.lido.fi) for contributions. These grants will focus on creating tools to help Node Operators better understand and use the protocol. ## What’s Next? CSM remains in its [Early Adoption](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi#block-ef60a1fa96ae4c7995dd7794de2a3e22) mode, offering unique benefits for identified solo stakers and high-performing testnet participants. If you’re eligible for Early Adoption, this is the perfect time to spin up CSM validators to enjoy potentially higher rewards and avoid competition with large-scale operators for stake allocation once it becomes accessible to all. ### Lido Validator & Node Operator Metrics: Q3 2024 URL: https://blog.lido.fi/lido-validator-node-operator-metrics-q3-2024/ Last updated: 2026-05-11T15:38:36.000Z ## TLDR: - In Q3 2024, SimpleDVT module added over 130 new Node Operators, bringing the total to 236 unique Node Operators. - Client diversity improved, with Geth usage decreasing steadily while Nethermind and Besu gained traction. - Galaxy Digital and Chorus One adopted the Reth client, operating 10k validators in different configurations, where Reth is either used in conjunction with other EL clients or as a failover. **Check the full Q3 VaNOM report:** [app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi) ## Expanding Operator Base with SimpleDVT During Q3 2024, Lido’s operator set expanded significantly through the launch of the SimpleDVT module. The number of node operators running active keys increased from 35 to over 236\. This broader inclusion of smaller operators running fewer keys has influenced the Gini coefficient, which has now increased to 0.8452 across all modules. This rise in the Gini coefficient reflects the protocol's larger scope and signals the early stages of a broader decentralization effort, with more operators gradually joining the network and contributing to its evolving distribution. ![](https://blog.lido.fi/content/images/2024/11/sdtv.png) ## Client Diversity & Infrastructure Evolution The Q3 2024 data shows a clear trend in client diversity, with Geth usage gradually decreasing quarter on quarter from over 90% to 35.6%. This steady decline highlights the increasing adoption of alternative clients like Nethermind and Besu. By Q3, Besu reached 20.3% and Nethermind 38.9%, marking a significant shift in client usage. The diversification of execution layer clients strengthens the overall resilience of the network, reducing reliance on a single client and supporting decentralization and client diversity goals across the operator set. Galaxy Digital operates 8,460 validators in a 1-out-of-3 hybrid configuration, utilizing Reth alongside two other EL clients. Chorus One has incorporated Reth as a failover option for a portion of their validators. Additionally, several operators are currently assessing the integration of Reth into their setups for implementation in the coming quarters. Although these numbers may seem small, this early adoption by major operators signals growing interest in Reth, paving the way for broader client diversity across the network. ![](https://blog.lido.fi/content/images/2024/11/client-diversity.png) ## Metrics for Stake Distribution The Curated Module, through which the majority of stake (99.5% as at end of Q3) is operated via the Lido protocol, continues to feature a well-distributed validator set, averaging 8,459 keys per node operator. Meanwhile, the SimpleDVT module—designed to support smaller operators—currently has a capped share limit of 4%, though only 0.45% of the total stake is actually utilized, spread across 222 smaller operators with 1,365 validators. The module share limits significantly impact stake distribution metrics when calculated across both modules. When combined with the larger Curated Module, the aggregated Gini coefficient appears higher, reflecting an uneven stake distribution. However, this discrepancy highlights the structural differences between the large, established operators in the Curated Module and the newer, smaller entrants in the SimpleDVT module, providing essential context for interpreting decentralization progress across modules. ## Certification Inventory As of Q2 2024, a new section has been added to VaNOM that inventories certifications held by node operators, offering insights into their commitment to security and compliance. This section details common certifications like ISO 27001 and SOC 2, Type I and II, providing users with a transparent view of the operational standards upheld by each operator. ISO 27001 is an internationally recognized standard for information security management systems, demonstrating that an organization has robust processes in place to manage and protect sensitive information. SOC 2, on the other hand, is an auditing standard that assesses how organizations safeguard customer data. SOC 2 Type I evaluates the suitability of design controls at a specific point in time, while Type II goes a step further, verifying the effectiveness of these controls over an extended period. By showcasing these certifications, the report enables users to better understand the security posture of node operators and their dedication to maintaining high compliance standards. ## Censorship Resistance Index (CRI) Also as of Q2 data, the report now features the Censorship Resistance Index (CRI), introduced by Neutrality Watch, as a key metric to assess an operator’s alignment with network neutrality principles. ![](https://blog.lido.fi/content/images/2024/11/cri.png) The CRI evaluates the likelihood of a node operator proposing blocks that include potentially filterable transactions, providing valuable insights into the extent to which an operator upholds censorship resistance within the network. A low CRI score could indicate that an operator is more likely connected to builders or relays known to filter certain transactions, which may limit the inclusivity of the blocks they propose. ## What’s Next? The next VaNOM report is scheduled for release early next year. In the meantime, to stay updated on all the latest developments with Lido Node Operators, explore the [Lido Node Operator Portal](https://operatorportal.lido.fi/?ref=blog.lido.fi) and join the Node Operator Community Calls [here](https://youtube.com/live/OvfTwdmtm3Q?feature=share&ref=blog.lido.fi). ### How to Leverage stETH on Fireblocks Off-Exchange URL: https://blog.lido.fi/leverage-steth-on-fireblocks-off-exchange/ Last updated: 2025-05-28T15:01:23.000Z In September, contributors to Lido Institutional were thrilled to share that Fireblocks had [integrated the Lido](https://blog.lido.fi/bringing-liquid-staking-to-the-fireblocks-network/) Protocol, enabling their users to stake their ETH with Lido Protocol’s liquid staking middleware for Ethereum. This integration has provided in-platform access to Lido Protocol’s liquid staking solution and stETH token. Users can now stake their ETH, get rewards, and use stETH for on-chain activities, including [Fireblocks Off Exchange](https://www.fireblocks.com/platforms/off-exchange/?ref=blog.lido.fi), which allows Fireblocks users to lock their stETH in a self-custodial collateral wallet to trade on exchanges like Deribit and Bybit. ### **What is stETH?** Lido Protocol’s stETH is a receipt token that serves as a blockchain-based document of title. It reflects the value of users’ staked tokens and accrued network staking rewards. These tokens are created upon staking and destroyed when redeemed, with balances adjusted daily based on oracle reports. Users can therefore use stETH on demand as a receipt token before the Lido protocol to withdraw their Ether from being staked. stETH can also be used with various third-party DeFi applications that have independently integrated and support it. With the Ethereum staking mechanism, holders of stETH get daily staking rewards, reflecting the overall growth in value as the Ethereum network grows and becomes more secure. The appeal of stETH lies in its versatility - it functions as a tradable, rewards-bearing token with broad integration across the [DeFi ecosystem](https://lido.fi/steth-in-defi?ref=blog.lido.fi), offering a seamless staking experience. ### **What is Fireblocks Off-Exchange?** Fireblocks provides institutions with a secure and efficient way to manage digital assets. Off-Exchange allows users to trade, lend, and manage assets on partner exchanges without moving them from Fireblocks’ wallet infrastructure. By retaining custody, institutions reduce counterparty risk and ensure that their assets are accessible and benefit from Fireblocks’ infrastructure. The Off-Exchange model is especially beneficial for institutions with high compliance standards or those managing large portfolios, offering added flexibility and operational efficiency. Through Fireblocks, institutions can maintain control over their assets and optimise their workflows across multiple platforms and liquidity venues. ### **Benefits of Using stETH with Fireblocks Off-Exchange** 1. **Rewards-Generating Collateral:** stETH can be used as collateral in various DeFi protocols and centralised exchanges, allowing institutions to leverage a rewards-bearing token that benefits from the staking rewards even while it is collateralised. 1. **Liquidity Without Compromise:** Unlike native staking, where funds are locked and get limited rewards, stETH offers liquidity by representing the Ether the user has previously sent to the Lido Protocol “middleware" and accrued network staking rewards. This enables institutions to trade, lend, or use stETH within DeFi or on CEXs while still getting staking rewards and continuous access to capital. 1. **Efficient Capital Deployment:** stETH’s flexibility on Fireblocks Off-Exchange enables institutions to allocate assets swiftly across exchanges such as Deribit and Bybit, counterparties, and DeFi platforms, all from a single platform. This streamlines operations and accelerates response times. 1. **Reduced Counterparty Risk:** Fireblocks Off-Exchange reduces the need to move assets in and out of exchanges, minimising exposure to counterparty risk. This streamlined approach is ideal for institutions concerned with maintaining custody and mitigating risk. 1. **Efficient Workflow and Flexibility:** By using stETH on Fireblocks, institutions can consolidate their trading, lending, and staking activities within a single platform. This consolidated workflow is not only operationally efficient but also provides a simplified approach to managing on-chain assets while benefiting from Fireblocks’ infrastructure. ### **Conclusion** The integration of stETH with Fireblocks Off-Exchange provides institutional clients with a powerful toolkit to engage in Ethereum staking with peace of mind. With the flexibility of stETH and the infrastructure of Fireblocks’ Off-Exchange, institutions can navigate the digital asset landscape more confidently, optimising rewards, enhancing liquidity management, and maintaining control over their assets. Join institutional players using Lido’s stETH on Fireblocks Off-Exchange. [Book a demo to learn more.](https://www.fireblocks.com/request-demo?ref=blog.lido.fi) ### **Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido protocol’s open-source, liquid staking middleware by non-retail users. Lido protocol’s middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido protocol’s middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. --- Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favouring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors. ### Introducing the New Lido Multichain Hub URL: https://blog.lido.fi/introducing-new-lido-multichain-hub/ Last updated: 2024-11-12T08:16:15.000Z Contributors to the Lido DAO have redesigned the [Multichain page](https://lido.fi/lido-multichain?ref=blog.lido.fi) on Lido.fi, transforming how users discover and learn about stETH across other networks (L2s and beyond). **Check out the new Multichain Hub here:** [**lido.fi/lido-multichain**](https://lido.fi/lido-multichain?ref=blog.lido.fi) What was previously a simple listing has evolved into an interactive information hub that combines real-time data, technical references, and practical guidance for users looking to access stETH outside Ethereum in a more intuitive interface. ![](https://blog.lido.fi/content/images/2024/11/image_2024-11-11_18-11-53.png) ## **What's New** The stETH ecosystem continues to expand across various networks, each offering distinct technical characteristics for users. The redesigned Multichain page helps both experienced users and newcomers understand where and how to use stETH through a flip-card design. Each card presents essential technical information and real-time data on the front, while revealing protocol integrations on the reverse. ## **An Intuitive Discovery Experience** The redesigned Multichain page introduces a new way to explore and understand different networks through interactive cards. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXetOMtL83yRbeUoDQs0J6VTwisiy0FRsagnEkhCdONlCtsveiCgpYFwzUoCpL6gLBaGxj0-9iaj0dw-ISJsHQUw7FS12TugJIoekyYV3q91qhsYFzEhQ5NN2ifMxv5CfiMM0vLhnn1nfuRjniE1sV_LaHOk?key=X2jxBo4U5i4buXT_8ZZR1fw8) Whether you're familiar with multiple networks or just starting to explore beyond Ethereum mainnet, each card provides clear comparisons and explanations of network characteristics. **Network card includes:** - Technical references and network architecture details - Up-to-date TVL data from DefiLlama - Links to Snapshot governance votes and deployed smart contracts - Clear documentation of supported token types - Access to technical resources and guides **The interface makes exploration easy through:** - Networks and their TVL utilisation for simple comparison - Featured and new networks highlights - Flip cards showing curated protocol integrations - FAQ and educational sections ## **How the New Interface Works** The interface helps users navigate supported networks through several key features: **Network Details at a Glance:** Each card presents comprehensive technical specifications, including network type, technical stack, and unique characteristics. Networks are shown with total value locked (TVL), with data sourced directly from [DefiLlama](https://defillama.com/?ref=blog.lido.fi) to ensure up-to-date figures. **Easy Network Comparison:** The standardized card format makes it simple to compare different networks' characteristics, helping users understand the unique aspects of each one. As the number of supported networks grows, additional filtering options will make it even easier to find relevant information. **Transparent Verification:** Each network card includes direct links to its Snapshot governance vote and deployed smart contracts, enabling users to verify the technical details. **Quick Token Access:** The "Get stETH/wstETH" button on each network card provides options specific to that network. Whether you're looking to bridge existing tokens or acquire them directly, the interface shows you the available paths forward. **Curated Protocol Integrations:** Flipping a network card reveals carefully selected protocol integrations for that network. Each integration is chosen to showcase technical possibilities, with direct links to learn more. A link to the full ecosystem page provides access to additional integrations. ![](https://blog.lido.fi/content/images/2024/11/image_2024-11-11_18-11-52.png) ## **Looking Forward** The Multichain page will continue to evolve alongside the stETH ecosystem. Contributors to the Lido DAO will maintain and enhance this resource through: - New networks and protocol integrations available - Up-to-date technical documentation and user guides - Interface improvements based on community feedback Visit the [Lido Multichain page](https://lido.fi/lido-multichain?ref=blog.lido.fi) to start exploring. ### Negative Rebase Protection Now Live URL: https://blog.lido.fi/negative-rebase-protection-now-live/ Last updated: 2024-11-08T04:40:01.000Z Following a successful LDO token holders’ [vote](https://vote.lido.fi/vote/180?ref=blog.lido.fi), Lido DAO contributors have deployed LIP-23: the Negative Rebase Sanity Check with pluggable Second Opinion system. This new layer provides additional safeguards through strict verification of AccountingOracle reports, with planned integration for trustless oracle data providers, anticipating an emerging solution from Succinct Labs, being funded through [LEGO grant](https://research.lido.fi/t/zk-lido-oracle-powered-by-succinct/5747?ref=blog.lido.fi), based on SP1 zkVM. ## **The Problem** As stETH has become increasingly integrated across DeFi protocols, with billions in TVL dependent on its stability, the importance of robust and reliable Oracles has grown proportionally. The Lido protocol relies on an [Oracle committee](https://research.lido.fi/t/expansion-of-lidos-ethereum-oracle-set/2836?ref=blog.lido.fi) to report external data to the protocol including validator balances on the Consensus Layer, which directly affects stETH token value through [rebasing](https://docs.lido.fi/contracts/lido?ref=blog.lido.fi#rebase). This critical mechanism requires state-of-the-art protection – a compromised AccountingOracle reporting incorrect balances could trigger significant negative rebases, potentially causing cascading liquidations in DeFi protocols where stETH is used as collateral and creating broader market turbulence. ## **The Solution: ZK-Verified Oracle Protection** Contributors to the Lido protocol have deployed a comprehensive system that introduces strict mathematical limits on negative rebases while establishing a framework for pluggable external balance-reporting trustless oracles. This supports the upcoming Succinct SP1 solution, which is currently being tested on Sepolia testnet and Mainnet (isolated from the protocol). This dual approach ensures that any changes to user balances are both limited in scope and trustlessly verified. The system achieves this through multiple layers of protection: ### **1\. Stricter Sanity Check Parameters** The system changes the AccountingOracle sanity check parameters from a 5% daily limit on Consensus Layer validator balance and withdrawal vault balance decrease to a maximum of \~3.4% over an 18-day window (equivalent to 1.101 ETH decrease per validator). For more details on the technical implementation, see ‘[LIP-23: Negative rebase sanity check with second opinion](https://research.lido.fi/t/lip-23-negative-rebase-sanity-check-with-second-opinion/7543?ref=blog.lido.fi)’. This precise calibration minimises potential losses of user assets while still allowing for normal validator operations and necessary penalties reports to arrive. ### **2\. Trustless Verification** Succinct Labs' ZK Oracle implementation on SP1 zkVM provides trustless verification by independently calculating validator balances and generating zero-knowledge proofs. This cryptographic solution serves as a "second opinion" to verify AccountingOracle reports containing negative rebase incurring data. ### **3\. Smart Contract Safeguards** The system enforces carefully calibrated parameters through smart contracts: - Maximum initial slashing penalty of 1 ETH per validator, ensuring proportional responses to misbehavior - Inactivity penalty of 0.101 ETH, reflecting standard consensus layer penalties - Error tolerance limit of 0.5% for validator balance reporting, precisely tuned to prevent manipulation while allowing for normal operations This implementation delivers key benefits to stETH holders and DeFi users: stronger protection against negative rebases through mathematical limits and enhanced stability for stETH positions across DeFi applications - all while requiring no changes to how users interact with the protocol. Trustless verification of Oracle reports through zero-knowledge proofs will be implemented as the next step. ## **Rigorous Process** The deployment follows a two-stage process: **Stage 1: Negative Rebase Protection (Currently Live on Mainnet)** - Extensive testing of the Negative rebase protection system on Sepolia and Mainnet - Comprehensive technical security audits by [Chainsecurity](https://github.com/lidofinance/audits/blob/main/ChainSecurity%20Code%20Assessment%20of%20LIP-23%20Negative%20Rebase%20Checks%20Smart%20Contracts%2006-24.pdf?ref=blog.lido.fi) and [MixBytes](https://github.com/lidofinance/audits/blob/main/Lido%20Sanity%20Checker%20Security%20Audit%20Report.pdf?ref=blog.lido.fi). - Final review and approval through [Lido DAO Vote #180](https://vote.lido.fi/vote/180?ref=blog.lido.fi) - Negative rebase protection system deployed and enabled on Mainnet **Stage 2: Second Opinion Integration (Possible future)** - Extensive testing of the ZK prover on Sepolia and Mainnet - Thorough verification of all ZK proof generation and validation processes - Three weeks of parallel testing of the ZK Oracle against Lido protocol’s traditional Oracle - Comprehensive technical security audits - DAO vote for activation ## **How It Works** **Stage 1: Negative Rebase Protection (Currently Live on Mainnet)** When the Oracle committee submits a report that would result in a negative rebase: - The system verifies the report against strict mathematical limits - Reports with abnormal data are automatically rejected - LDO token holder’s vote is required to resolve exceptional cases - The system ensures all rebases stay within the limits defined by the protocol parameters **Stage 2: Second Opinion Integration (Upcoming)** When second opinion capabilities are activated: - Instead of automatic rejection, abnormal reports will trigger second opinion verification - Reports can proceed if validated by the second opinion provider - Enhanced trust minimization through independent verification ## **Rigorous Security Process** ### **Error Tolerance and Attack Prevention** The 0.5% error tolerance limit was carefully calibrated based on current protocol TVL and validator economics. At current TVL levels (\~10 million ETH), an attack would require activating approximately 1,500 validators – making manipulation both extremely costly and ultimately unprofitable. Furthermore, with triggerable withdrawals soon available on Ethereum through EIP-7002, such an attack becomes even more impractical as forged validators could be forced to exit. ### **ZK Oracle Performance** At the moment of writing, Succinct Labs' ZK Oracle implementation on SP1 achieves quite a significant efficiency on Mainnet test runs: - Processes verification of \~1.6M validators - Completes verification in approximately 40-50 minutes - Requires about 400k gas for on-chain verification More details will be provided on the Lido research forum later. ## **Looking Ahead** This deployment represents a significant milestone to contributors' ongoing commitment to protocol development and protection. The integration of Succinct Labs' ZK Oracle built on SP1 zkVM technology should demonstrate how advanced cryptography enhances liquid staking protocols. The next major step will be the integration of Succinct Labs' ZK Oracle on SP1 zkVM technology as a second opinion verifier. This integration will require its own process including a separate LDO token holder vote after comprehensive testing, technical security audits, and several months of parallel running alongside existing systems before it can be connected to the [SanityChecker](https://docs.lido.fi/contracts/oracle-report-sanity-checker?ref=blog.lido.fi) contract. ## **Resources** - [LIP-23: Negative rebase sanity check with second opinion](https://research.lido.fi/t/lip-23-negative-rebase-sanity-check-with-second-opinion/7543?ref=blog.lido.fi) - [Staking Router + Community Staking Module upgrade announcement](https://research.lido.fi/t/staking-router-community-staking-module-upgrade-announcement/8612?ref=blog.lido.fi) - [Lido protocol’s Accounting Oracle](https://docs.lido.fi/guides/oracle-spec/accounting-oracle/?ref=blog.lido.fi) - [Lido DAO Vote #180](https://vote.lido.fi/vote/180?ref=blog.lido.fi) --- *Note: This post describes technical improvements to the Lido protocol's infrastructure. This information is provided for transparency and educational purposes.* ### Deribit Enables stETH for Cross Collateral URL: https://blog.lido.fi/deribit-enables-steth-for-cross-collateral/ Last updated: 2025-05-28T15:01:53.000Z stETH as cross collateral is now available on Deribit, allowing users to use currencies other than the settlement currency as margin for open positions or orders on derivative products. With this independent integration, Deribit has enabled stETH holders to use their assets as collateral across Deribit's trading suite, including options, futures, and perpetual contracts. By using stETH as collateral, users maintain their staking rewards from Ethereum, even as they leverage the asset to support active trading positions. The new cross collateral margin system allows for the use of stETH as margin for open positions or orders on Deribit while still getting network staking rewards. Given the changes from the old system though, portfolio margin users in particular should make sure to read through the available guides, as there are new parameters and calculations. If you would like to learn more about the new cross collateral system, information is available [here](https://insights.deribit.com/exchange-updates/cross-collateral-arrives-on-deribit/?ref=blog.lido.fi). ### **About Deribit** Deribit is a leading cryptocurrency exchange. Founded in 2016, Deribit has quickly become a trusted platform for both institutional and retail traders, offering a secure and highly efficient trading environment. With a focus on innovation and transparency, Deribit provides a wide range of advanced trading tools and deep liquidity, allowing users to hedge, speculate, and manage risk effectively. Headquartered in Panama, Deribit is committed to maintaining the highest standards of compliance and security while continuously enhancing its platform to meet the evolving needs of the global cryptocurrency market. For further information, please visit [www.deribit.com](https://www.deribit.com/?ref=blog.lido.fi). ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido’s middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, please visit[ lido.fi/institutional](http://lido.fi/institutional?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favouring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Introducing The 'stETH in DeFi' Hub URL: https://blog.lido.fi/introducing-the-steth-defi-hub/ Last updated: 2024-11-05T15:13:14.000Z Contributors to Lido DAO are happy to announce the new '[stETH in DeFi](https://lido.fi/steth-in-defi?ref=blog.lido.fi)' hub on Lido.fi, creating an information hub where you can discover the many ways to use stETH across DeFi protocols. This new hub brings together diverse options from across the ecosystem, making it easier than ever to explore and learn about different ways to use stETH. [![](https://blog.lido.fi/content/images/2024/11/Screenshot-2024-11-05-at-16.12.28.png)](https://lido.fi/steth-in-defi?ref=blog.lido.fi) ## **What's New** Until now, finding ways to use stETH in DeFi meant navigating through multiple websites, documentation pages, and community discussions. The new stETH in DeFi page changes this by bringing selected protocols and curators together in one intuitive interface. Whether you're interested in third-party lending and borrowing, third-party diversified rewards or restaking options, you can now discover them in a single place. ## **Key Features** The stETH in DeFi page launches with a small selection of DeFi options, with more coming soon. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXei-EmjymjHEKWjGWjugpbZUjbt4quIu5nHb4rDqTIzDFCIuKBXevlAxcgCVPX8Tnjcry1MVeYPm98N0WKfFQ6XHt1U6xIVzrw3NJePHTTwPGEqwZ0Chm1D3KaEnUY7H4zH1abIdbB-wsd1qEApgMmx6rLo?key=6tG6L_2YCWPIh98oJ630gA) The stETH in DeFi page covers four main categories: - **Third-Party Lending and Borrowing:** Utilize your stETH - lend it out or borrow against it to access liquidity through third-parties when needed. - **Third-Party Diversified Rewards:** Discover multimodal DeFi options for stETH with dynamic rebalancing and flexible operation. - **Restaking:** Use stETH as collateral in restaking for third-party rewards. - **Leveraged Staking (coming soon)**: stETH can be used as collateral and leverage ETH using native rate feeds. Each featured strategy includes essential information to help you evaluate the options available, including the name of curator or protocol, and type of rewards available. However, users are encouraged to conduct their own research and assess whether specific use cases align with their objectives. ## **Using stETH in DeFi** Whether you're just starting out or you're an experienced DeFi user, the new stETH in DeFi page helps you discover strategies that match your experience level and goals. What makes stETH stand out for DeFi strategies? - **Multiple strategy options**: New to DeFi? Start with simple third-party lending or liquidity provision. Ready for more? Explore advanced recursive strategies. - **Highly liquid and widely adopted**: stETH is extensively utilized across third-party lending platforms, restaking protocols, and exchanges, with deep liquidity across major DeFi platforms, making it easy to enter and exit positions when you need to. - **Minimize Slashing Risk:** Benefit from stETH's reliance on a diverse and decentralized validator set. - **Multichain**: While initially limited to Ethereum mainnet, in the future the page will expand to showcase use cases on multiple L2 networks and beyond to benefit from new strategies and enhanced efficiency, while still enjoying Ethereum's security. - **Fully Audited and Battle-tested:** With [multiple audits](https://docs.lido.fi/security/audits?ref=blog.lido.fi) and a [Bug Bounty Program](https://lido.fi/bug-bounty?ref=blog.lido.fi), stETH has been rigorously monitored and undergone extensive security assessments. ## **What’s Next** The stETH in DeFi page is designed to evolve alongside the ecosystem. Contributors to the Lido DAO are committed to regularly updating this hub with new use cases as they emerge, making it an essential resource for discovering ways to use stETH. Visit the new [stETH in DeFi](https://lido.fi/steth-in-defi?ref=blog.lido.fi) page section on Lido to begin exploring these selected curators and protocols. ### Exploring Distributed Validator Technology with SafeStake URL: https://blog.lido.fi/exploring-distributed-validator-technology-with-safestake/ Last updated: 2026-05-05T21:37:44.000Z This blog post covers the results of an initial pilot testnet integration with [SafeStake](https://safestake.xyz/?ref=blog.lido.fi), a Distributed Validator Technology (DVT) provider. Conducted in a similar manner to the initial pilot testnets with [Obol](https://blog.lido.fi/dvt-pilot-with-obol-network/) and [SSV](https://blog.lido.fi/ssv-network-pilot/) pre-Simple DVT, this testnet was aimed at assessing whether SafeStake DVT infrastructure could be utilized by Node Operators to run Distributed Validators (DVs) using the Lido protocol and to examine cluster performance. Over the past two months, 17 node operators (NOs) have participated in the SafeStake testnet on Lido on Holesky. For the duration of the testnet, attestation performance was generally found to be quite performant, but the majority of clusters faced issues with block proposals. Additionally there was a slashing incident which occurred as a result of a faulty SafeStake software upgrade towards the end of the testnet. ## **Lido on Holesky SafeStake Pilot** ### *Participant Distribution* The Pilot Lido x SafeStake Testnet started in late April 2024 on the Holesky testnet, with 17 total participants including 2 solo stakers & community stakers, 14 professional node operators, and SafeStake. Participants were split into 5 clusters of 4, with an effort to minimize geography-related latency and achieve a diversity of infrastructure types (e.g. bare metal servers, home machines, and public cloud). One of the clusters was a SafeStake-only cluster and used as a benchmark to compare against other clusters. Similarly to the other pilot testnets, each cluster included at least one member of the Lido on Ethereum Curated Node Operator set. In addition, an effort was made to include participants that had indicated significant experience with SafeStake based DVT during their applications. At the aggregate level, participants from 13 countries across North & South America, Europe, Asia, and Australia came together to run nodes. ![](https://blog.lido.fi/content/images/2024/10/Countries.png) ### The Process Each cluster started the process by choosing a “Cluster Coordinator”, a participant that would be responsible for creating a Safe multi-sig. Each cluster, and the corresponding Safe multisig consisted of a 3/4 threshold, and represented their cluster in the Lido Node Operator registry on Holesky. Each participant was responsible for setting up their SafeStake operator and sharing their operator ID with the rest of the cluster participants. Once completed, a single Node Operator (NO) from each cluster (usually the coordinator) generated 100 validator keys and then manually split the keys before submitting them to the Simple DVT Module on Holesky. It’s important to note that no Distributed Key Generation (DKG) was used in this process, as the key splitting was performed by the NO itself. While the Simple DVT (SDVT) module was used, this pilot was not considered an SDVT trial, as it was the first time SafeStake was being piloted. The participants started off by using MEV Boost with Aestus, Flashbots, Titan, and Ultrasound as relays. Due to a current limitation of SafeStake’s implementation, the validators were not able to set the appropriate Execution Layer Rewards Vault address as the specified fee address recipient as part of this testnet. After the validators were activated, low block proposal success rates were observed, despite high validator uptime. After analysis by the SafeStake team, they determined that this was due to incorrect MEV-boost configuration as part of the participants’ operator setups. While the SafeStake cluster was able to submit some block proposals successfully, the other clusters were unable to successfully propose any blocks. After the rollout of a software update intended to address block proposal failures during the Lido x SafeStake Testnet, an issue arose where validator slashing occurred due to inconsistent attestation duties. The root cause was traced to running two conflicting versions of the SafeStake software simultaneously within the Clever Coyote cluster, which created a scenario where two leaders handled attestation duties differently, leading to double attestations for the same slot. While the primary focus was on the validators within Lido's SafeStake pilot on Holesky, other SafeStake validators outside of the Lido pilot were also impacted, leading to a slashing event for 15 validators in the Clever Coyote cluster and additional slashing across non-Lido SafeStake clusters. The issue stemmed from a lack of version management between the old and new SafeStake software versions ([Post-Mortem](https://hackmd.io/@mao007/BkSsEorh0?ref=blog.lido.fi)). The older version allowed two leaders to propose attestation duties for the same slot, while the updated version enforced a single-leader model. The conflict between the two software versions resulted in different attestations being submitted for the same block, triggering the slashing. To mitigate the issue, validators were halted across affected clusters, and a new version of the software was deployed to resolve the issue. The operators were instructed to upgrade to the fixed version before restarting their validators. This process ensured that validators resumed operation without further slashing incidents. Soon after, the testnet was concluded. All validators were exited on September 7th, and participants successfully completed claiming of rewards via the SafeStake Reward Distribution process. ### **Performance Results** ![](https://blog.lido.fi/content/images/2024/10/Performance.png) *SafeStake Cluster Aggregate Results* As seen in the image above, the aggregate metrics for this Lido x SafeStake testnet completed with 91.86% Uptime, 71.56% Attestation Effectiveness, and a 10.59% Block Proposal Success Rate (all metrics per Rated). **Cluster Results** ![](https://blog.lido.fi/content/images/2024/10/Metrics.png) ## **Next Steps** While this SafeStake testnet has demonstrated proof of concept, there are still a number of changes and improvements that need to be made and further testing that will need to be undergone before another testnet on Holesky with SafeStake takes place via the Lido protocol. Some of the enhancements necessary include further support for block proposals, distributed key and deposit data generation, and custom fee address recipient address. Among these features, the addition of DKG will be a critical element to reduce the trust requirements currently necessary for creating and submitting validators. DVT continues to be a promising method to enable solo operators and permissionless entry into the node operator set while further decentralizing validator infrastructure using the Lido protocol. ## **Appendix: SafeStake Pilot Participants** Cluster 1: DSRV, Ebunker, Hashkey, Pier Two Cluster 2: ChainSafe, Chainup, Enti, InfStones Cluster 3: Blockscape, Launchnodes, Openbitlab, RockLogic Cluster 4: Allnodes, CryptoManufaktur, Kukis Global, Stakely Cluster 5: SafeStake ### Lido Staking Goes Cross-Chain via Chainlink CCIP URL: https://blog.lido.fi/lido-staking-goes-cross-chain-via-chainlink-ccip/ Last updated: 2024-10-30T09:04:37.000Z ### Users can now stake their ETH directly on layer 2 (L2) networks and receive wstETH, powered by CCIP’s Programmable Token Transfers. Chainlink’s [Cross-Chain Interoperability Protocol](https://chain.link/cross-chain?ref=blog.lido.fi) (CCIP) is powering [Lido](https://lido.fi/?ref=blog.lido.fi)’s new Direct Staking rails that enable users to stake their ETH directly from other blockchain networks and receive wstETH, starting with support for Arbitrum, Base, and Optimism. The peripheral smart contract leverages CCIP’s [Programmable Token Transfer](https://blog.chain.link/ccip-programmable-token-transfers/?ref=blog.lido.fi) functionality to abstract away the process of a user transferring and staking ETH on Ethereum, increasing the accessibility and liquidity of wstETH across the multi-chain economy. Direct Staking offers multiple different methods of staking ETH from L2 networks, depending on the cost and speed preferences of users, and is being adopted by various DeFi frontends, including [XSwap](https://xswap.link/?ref=blog.lido.fi), [OpenOcean](https://openocean.finance/?ref=blog.lido.fi), and [Interport](https://interport.fi/?ref=blog.lido.fi). ## What this unlocks: One-step Lido staking from Arbitrum, Base, and Optimism The core Lido protocol resides on Ethereum mainnet, providing users the ability to tokenize their staked ETH position into a liquid wstETH token, which can then be used across the DeFi economy. As the multi-chain ecosystem has grown, the Lido protocol has made wstETH natively available across a number of L2 networks, where users benefit from reduced transaction costs. However, because wstETH can still only be issued on Ethereum mainnet, it’s difficult for users to mint wstETH using ETH from L2 networks. Holders of ETH on L2 networks looking to stake their ETH must either swap their ETH for wstETH on an exchange and incur slippage, or manually bridge their ETH back to Ethereum mainnet (which may take up to 7 days), stake their ETH in Lido for wstETH, and then manually bridge their wstETH back to the L2 network. The new Direct Staking rails powered by CCIP compresses all of these steps into a single L2 transaction. ## What’s required: Chainlink CCIP Programmable Token Transfers The creation of Direct Staking rails necessitated a cross-chain interoperability solution that could transfer not only tokens cross-chain but also instructions on what to do with those tokens once they arrive on the destination chain. Chainlink CCIP uniquely unlocks this opportunity as the protocol supports **Programmable Token Transfers**, enabling tokens and arbitrary data to be transferred cross-chain as a single transaction. By leveraging CCIP’s Programmable Token Transfers, users can now stake their ETH from Arbitrum, Base, or Optimism and receive wstETH in return in a single transaction. Specifically, Lido’s Direct Staking rails enable multiple different methods of staking ETH from L2 networks, depending on the cost and speed preference of users. These include: - **Approach 1**: The user stakes on the L2, and then the ETH, along with data instructions on what to do with it, is sent to Ethereum via CCIP. A receiving smart contract within Lido’s Direct Staking rails then stake the ETH in Lido’s staking contracts on Ethereum mainnet and the wstETH is bridged to the user’s wallet address on the L2\. - **Approach 2:** The end user stakes ETH on the L2 to receive wstETH from the liquidity pool. This is achieved by using the exchange rate feed to report the Lido protocol’s internal exchange rate for wstETH on that L2\. Once the ETH deposited by the user on the L2 is sent to Ethereum via CCIP along with the instructions to stake, the wstETH is then bridged back to L2 to replenish the pool. This method of acquiring wstETH on L2 networks complements existing methods and does not require any changes to the core Lido protocol or wstETH token deployments. Lido’s Direct Staking is also extensible to any L2 or alternative layer-1 network. For more information on how CCIP enables cross-chain staking, read [this Chainlink blog on scaling staking protocols cross-chain](https://blog.chain.link/scaling-staking-protocols-cross-chain/?ref=blog.lido.fi). Lido contributor selected Chainlink CCIP because it is designed with defense-in-depth security and is powered by Chainlink’s industry-standard decentralized oracle networks, which have a proven history of securing tens of billions of dollars and facilitating over $16 trillion in onchain transaction value. It is the only blockchain interoperability solution with [level-5 cross-chain security](https://blog.chain.link/five-levels-cross-chain-security/?ref=blog.lido.fi), featuring additional layers of protection through the [Risk Management Network](https://blog.chain.link/ccip-risk-management-network/?ref=blog.lido.fi). This first-of-its-kind innovation is uniquely capable of supporting a secure and scalable cross-chain DeFi ecosystem. ## A Single Platform: Leveraging Chainlink for Data, Compute, and Cross-Chain Connectivity In addition to CCIP, Lido’s Direct Staking also leverages data and compute services provided by the Chainlink platform. [Chainlink Data Feeds](http://chain.link/data-feeds?ref=blog.lido.fi) accurately and reliably provide the wstETH exchange rate, which determines the redemption rate that wstETH can be redeemed for ETH, while [Chainlink Automation](https://chain.link/automation?ref=blog.lido.fi) helps Lido manage liquidity by batching cross-chain ETH transfers at preset intervals. “With Chainlink CCIP’s Programmable Token Transfers, Lido’s Direct Staking simplifies staking across Layer 2 networks, improving liquidity for wstETH and enhancing cross-chain interoperability. This aligns with Lido’s mission to democratize staking by making liquid staking more accessible, while maintaining decentralization and advancing the broader DeFi ecosystem." — Jakov Buratović, Master of DeFi, Lido. “It’s great to see Chainlink CCIP’s Programmable Token Transfers unlocking a one-step connection to staking for Lido on Arbitrum, Base, and Optimism, enabling users to easily access the benefits of LSTs in low-fee, fast-execution environments. LSTs have become an important part of the DeFi economy and making them more easily accessible across the multi-chain landscape through the use of CCIP will help grow the onchain economy.”—Johann Eid, Chief Business Officer at Chainlink Labs. --- ### **About Lido** Lido is an open-source, liquid staking middleware, providing a simple way to earn rewards using your digital assets. With a mission to democratize staking, the Lido middleware connects node operators and users by allowing users to self-stake their digital assets without the need to maintain hardware. Lido empowers users to self-mint liquid staking tokens which they can freely use across the DeFi ecosystem. Learn more: [lido.fi](https://lido.fi/?ref=blog.lido.fi) ### **About Chainlink** Chainlink is the universal platform for pioneering the future of global markets onchain. Chainlink has enabled over $16 trillion in transaction value by providing financial institutions, startups, and developers worldwide with access to real-world data, offchain computation, and secure cross-chain interoperability across any blockchain. Chainlink powers verifiable applications and high-integrity markets for banking, DeFi, global trade, gaming, and other major sectors. Learn more about Chainlink by visiting [chain.link](https://chain.link/?ref=blog.lido.fi) or reading the developer documentation at [docs.chain.link](https://docs.chain.link/?ref=blog.lido.fi). ### stETH Enables New Strategies on Aave v3.2 URL: https://blog.lido.fi/steth-enables-new-strategies-on-aave/ Last updated: 2024-10-28T18:03:04.000Z Starting today, deposits and borrows are available on the Lido Aave V3.2 market, allowing for new strategies for DeFi participants. Users can get staking and restaking rewards with stETH on Aave's Liquid eModes by providing LRTs as collateral and borrowing wstETH while getting Aave rewards. ➡️ To get started, visit [app.aave.com](https://app.aave.com/?ref=blog.lido.fi). ## **What’s New?** Aave, the leading lending protocol, has introduced v3.2 featuring Liquid eModes—a game-changer for users seeking reward strategies. This new feature allows granular isolation of assets which will provide users ability to provide liquid restaking tokens and borrow wstETH on the Lido - Aave market, providing access to new strategies. ## **Key Highlights:** - **Deposit LRT as Collateral to Borrow wstETH:** Users can deposit LRTs in the Lido-Aave market and borrow wstETH against their collateral while getting Aave rewards. - **Recursive Strategies:** The Lido - Aave market enables recursive borrowing through automated looping strategies using DeFi management tools. Users can recursively borrow wstETH against LRT collateral, amplifying the positive differential. - **New Vaults Coming Soon:** Future updates will introduce additional vaults and markets, further expanding the current DeFi strategies available. ## **What is Lido’s stETH?** Lido’s stETH is a rebasable utility token representing your share of ETH staked through Lido protocol. Contrary to wstETH, stETH provides holders with the accrued ETH staking rewards reflected through a daily supply rebase, which sees your supply of stETH increase as staking rewards are generated. For more information on stETH, check out the article here:[ *'What is Lido's stETH'*](https://help.lido.fi/en/articles/5230610-what-is-steth?ref=blog.lido.fi) ## **What are AAVE Liquid eModes?** Aave v3.2 introduces Liquid eModes, a feature allowing wstETH to be eligible for multiple efficiency modes (eModes) simultaneously. For users, this means wstETH can now be used across different market configurations with optimized parameters for each use case. For more information on Liquid eModes, check out the article here: [*‘Aave v3.2: Liquid Emodes’*](https://governance.aave.com/t/bgd-aave-v3-2-liquid-emodes/19037?ref=blog.lido.fi) ## **Why This Matters** By enabling recursive staking and restaking strategies with stETH, this expansion of stETH use-cases by Aave's Liquid eModes opens up different possible strategies for DeFi enthusiasts. ## **Benefits of Using stETH on Aave's 3.2** - **Wide Range of DeFi Strategies:** Aave v3.2's Liquid eModes allow the borrowing of wstETH against your LRT collateral to activate strategies that best suit your goals. - **Liquidity:** stETH offers liquidity across multiple DeFi platforms. - **Multichain:** Beyond Ethereum mainnet, you'll soon be able to borrow wstETH against LRTs on several L2s through Aave, benefiting from lower gas fees. ## **How to Get Started** 1. **Choose Your Platform** - Visit app.aave.com or your preferred DeFi management platform. - Connect your wallet and ensure you have LRT tokens ready. 2. **Deposit your collateral** - Deposit your LRT tokens as collateral in the Lido-Aave market. - Benefit from Aave incentives on your deposits. 3. **Borrow wstETH** - Choose your preferred leverage level based on your risk appetite. - Borrow wstETH against your LRT collateral. 4. **Amplify rewards** - Use DeFi automation platforms to: - Implement recursive borrowing strategies. - Auto-compound your rewards. - Maintain optimal health factors. ## **What’s Next?** Here's what's coming: - New vaults and markets will be introduced. - Expansion to multiple networks, allowing you to access strategies with the additional benefits of L2s. ## **Join the Conversation** Share your experiences, strategies, and insights with the community. Follow us on Twitter and join our Discord to stay updated on the latest developments. ### Community Staking Module: A New Era for Solo Stakers on Ethereum URL: https://blog.lido.fi/community-staking-module-new-era-for-solo-stakers/ Last updated: 2026-06-03T21:04:12.000Z ### CSM: Overview - The Community Staking Module is live on [mainnet](https://csm.lido.fi/?ref=blog.lido.fi)! Start your Ethereum validation journey with CSM, following [the onboarding checklist](https://operatorportal.lido.fi/modules/community-staking-module/csm-new-operator-checklist?ref=blog.lido.fi). - The CSM mainnet will begin with an [Early Adoption](https://blog.lido.fi/csm-early-adoption/) stage, allowing identified solo stakers and those who performed well during the testnet to participate first. - CSM is the first module to provide permissionless access for Node Operators, particularly solo stakers, allowing them to run validators using the Lido protocol with a minimum capital requirement of just 1.3 ETH and potential increased rewards. - CSM continues to further the [Lido DAO’s mission](https://research.lido.fi/t/lido-dao-vibe-alignment-purpose-mission-vision/4380?ref=blog.lido.fi) of keeping Ethereum decentralized by introducing a new category of Node Operators, thereby increasing the total number of Ethereum validators. - As one of the key features of the [Lido V2](https://blog.lido.fi/introducing-lido-v2/) upgrade, the Staking Router highlights its modular architectural strength in accelerating the diversification of the Node Operator set by seamlessly integrating CSM and the Simple DVT module in 1.5 years, with additional modules to follow. Whether you're a seasoned staker or new to the ecosystem, CSM presents an unprecedented opportunity to run Ethereum validators using the Lido protocol in a permissionless and cost-effective manner. In this way, anyone is encouraged to participate in Ethereum validation and security, with a lower capital requirement and the potential for boosted rewards. Built on the modular architecture of the Staking Router, the third Lido on Ethereum staking module will continue to increase the diversity of Node Operators and validators within the protocol. The launch of CSM promises to reshape solo staking on the Ethereum network. It marks a pivotal milestone in Ethereum node staking, aligning with the stated mission of Lido DAO to maintain Ethereum’s decentralization, accessibility to all, and resistance to censorship. 0:00 /1:07 1× ### What is the Community Staking Module? [The Community Staking Module](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) is the first module to allow any node operator to use Lido on Ethereum to run validators. It is primarily aimed at lowering entry barriers for those looking to directly contribute to Ethereum’s security, but constitutes a worthwhile proposition both for novice as well as experienced node operators. To run a validator [using CSM](https://docs.lido.fi/staking-modules/csm/join-csm?ref=blog.lido.fi), Node Operators need to supply a specially crafted [bond](https://docs.lido.fi/staking-modules/csm/join-csm?ref=blog.lido.fi#bond), submit the key and wait for stake allocation (i.e. 32 ETH per validator) from the protocol. CSM includes several key features to make solo staking more accessible: - **Permissionless entry**: Anyone can become a node operator to run Ethereum validators using the Lido protocol, encouraging wider community participation in Ethereum staking. - **Competitive bond structure**: Node operators submit a bond in the form of ETH (or stETH) which is used to mitigate the impact of any operational mistakes, allowing Node Operators to run the first validator with a bond of just 2.4 ETH (1.5 ETH for Early Adoption members) and 1.3 ETH thereafter ([more on bond parameters and risk assessment](https://research.lido.fi/t/risk-assessment-for-community-staking/5502?ref=blog.lido.fi)). - **Exclusive use of ETH (stETH) for bonds and rewards:** No platform or governance tokens as collateral are required. - **Smooth rewards distribution**: Node Operators stand to get consistent and stable rewards, in contrast to highly volatile solo staking rewards, as daily consensus layer and execution layer validation rewards are awarded amongst node operators using the Lido protocol. - **Flexible and simplified staking experience**: CSM can be used via a variety of user-friendly interfaces via various integrations (e.g., [DAppNode](https://docs.dappnode.io/docs/user/staking/ethereum/lsd-pools/lido/?ref=blog.lido.fi), [Stereum](https://stereum-dev.github.io/ethereum-node-web-docs/docs/installation/tutorial-guides/node-operation/lido/lido-csm?ref=blog.lido.fi), [eth-docker](https://eth-docker.net/?ref=blog.lido.fi), [Sedge](https://docs.sedge.nethermind.io/docs/quickstart/staking-with-lido?ref=blog.lido.fi), [EthPillar](http://ethpillar.coincashew.com/?ref=blog.lido.fi), and others). Interactions with CSM contracts are cheaper than most other solo staking alternatives (apart from vanilla solo staking), further increasing its accessibility as a solution. Moreover, Node Operators can run their nodes as they wish, and even alongside existing solo staking infra, without the need to install additional software. - **Enhanced reward potential**: CSM’s dual reward structure enables Node Operators to get staking rewards on their bond and a share of staking rewards from user-driven stake, potentially delivering [up to 2.37 times](https://docs.google.com/spreadsheets/d/17mEuaI8ui-pmTTwev1FFIhch1X90HefpDB65kKyXDUU/edit?gid=0&ref=blog.lido.fi#gid=0&range=D27) higher rewards per ETH compared to traditional solo staking. ![](https://blog.lido.fi/content/images/2024/10/key--2-.png) ### What does CSM mean for Lido Protocol? The introduction of CSM represents another major step forward in efforts to enhance Ethereum’s decentralization and security. By allowing permissionless access to a diverse range of participants, the mission “Make staking simple, secure, and decentralized” is advanced. - **Strengthen decentralization**: CSM opens up node staking using the Lido protocol to a wider base of operators, continuing to grow the number of Node Operators on Ethereum. - **Increase community involvement**: Staking is further democratised as, through lowering barriers to entry for validation, net new individuals can now participate as Node Operators in Ethereum. - **Boost security and resilience**: With a larger, more distributed validator set, CSM enhances Ethereum’s overall security and resistance to censorship. The Staking Router, [Introduced in Lido V2](https://blog.lido.fi/introducing-lido-v2/), is a modular architecture distributing stake across various plug-and-play modules, making pools of validators more accessible and customizable. Augmenting the functionality of the Lido protocol as neutral middleware where stakers, developers, and Node Operators collaborate seamlessly, and contribute to a more diverse validator ecosystem. ![](https://blog.lido.fi/content/images/2024/10/arch--3-.png) CSM and the Simple DVT Module (which launched in February, and has since added 220 net-new Node Operators), demonstrate the potential of the Staking Router to drive rapid further decentralization of both Lido and Ethereum. ### The Community Lifeguards Initiative The Lido [Community Lifeguards Initiative](https://operatorportal.lido.fi/community-lifeguards-initiative?ref=blog.lido.fi) (CLI) was introduced to encourage greater community participation in the Lido protocol. Over the past 18 months, the dedicated efforts of the Community Lifeguards - through programs like the Community Staking Fleet and various satellite community events - have successfully brought new stakers into the Lido protocol’s ecosystem. These participants have engaged in learning about node staking, with some even launching their first Ethereum validators on testnet using CSM. Looking ahead, CLI is expected to continue expanding its reach by working with more communities worldwide, promoting Ethereum and staking education to a broader audience. ### As a solo staker, why should I join the CSM mainnet? Solo stakers are essential to preserving Ethereum’s censorship resistance, credible neutrality and decentralization. However, the current 32 ETH requirement and technical complexities deter many from participating. CSM lowers the capital requirement to 2.4 ETH (even 1.5 ETH for EA participants) for the 1st validator (1.3 ETH afterwards), making validator operation more accessible to a broader audience. Additionally, the potential lower rewards for solo staking compared to DeFi opportunities have posed a challenge for those considering whether to solo stake or not. CSM’s reward system offers a more competitive proposition for those considering node staking potentially rivalling rewards from DeFi protocols. In short, CSM presents a win-win validation solution for Ethereum and solo stakers. ### How do I join the CSM mainnet? The CSM mainnet will begin with an [Early Adoption](https://blog.lido.fi/csm-early-adoption/) stage, allowing identified solo stakers and those who performed well during the testnet to participate first. This Early Adoption period helps prevent larger operators from crowding out CSM’s capacity and offers solo stakers exclusive access. Afterward, the module will open to all participants. As a previous or current solo staker, you are highly likely to be eligible for the Early Adoption program. Visit [csm.lido.fi](http://csm.lido.fi/?ref=blog.lido.fi) to check if you’re eligible, and check out [the onboarding checklist](https://operatorportal.lido.fi/modules/community-staking-module/csm-new-operator-checklist?ref=blog.lido.fi) to see how easy it is to set up your first validator with CSM! ### Find Out More - [Community Staking Module: Overview](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) - [Community Staking Module: Docs](https://docs.lido.fi/staking-modules/csm/intro?ref=blog.lido.fi) - [Community Staking Module: Proposal](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi) - [Risk assessment for community staking](https://research.lido.fi/t/risk-assessment-for-community-staking/5502?ref=blog.lido.fi) - [Lido Community Lifeguards Initiative](https://research.lido.fi/t/lido-community-lifeguards-initiative/4678?ref=blog.lido.fi) - [CSM Community Discord](https://discord.com/channels/761182643269795850/1171819964357951498?ref=blog.lido.fi) *Disclaimer: Network staking rewards are not guaranteed, vary and are dictated by the rules of the method for validating transactions, which are developed independently by the developers of each specific blockchain network and are not subject to modification by any liquid staking protocol. Past performance is not a reliable indicator of future results.* ### L1 Adds Liquid Staking to Digital Asset Platform URL: https://blog.lido.fi/l1-adds-liquid-staking-to-digital-asset-platform/ Last updated: 2025-05-28T15:03:05.000Z [Lido Institutional](https://lido.fi/institutional?ref=blog.lido.fi) contributors are excited to announce that [L1.co](http://l1.co/?ref=blog.lido.fi) has successfully integrated Lido’s liquid staking middleware into their digital asset advisory platform. L1 is the operating system for onchain wealth and asset management. They bring together the most powerful networks, protocols, liquidity, and a holistic view of their clients’ digital asset portfolios. With this integration, L1 advisors can now seamlessly recommend to their clients to stake ETH using Lido’s liquid staking middleware. L1 is SOC 2 Type 2 compliant and has built a platform following the highest security standards and practices. L1’s non-custodial, non-discretionary solution ensures clients can advise on digital assets in a compliant manner, they are trusted by VanEck, Securitize and CoinDesk Indices. ### **About L1** [L1](http://l1.co/?ref=blog.lido.fi) is building the future of wealth and asset management. “We believe all asset classes are coming onchain, so we are building the tools for the participants of this new financial system to leverage all of the new infrastructure, protocols, and liquidity without compromising on security or user experience”. For further information, please visit [l1.co](https://l1.co/?ref=blog.lido.fi). ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido’s middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, please visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Ceffu Enables stETH Custody & Staking URL: https://blog.lido.fi/ceffu-enables-steth-custody-staking/ Last updated: 2025-05-28T14:58:43.000Z [Lido Institutional](https://lido.fi/institutional?ref=blog.lido.fi) contributors are thrilled to share that [Ceffu](https://www.ceffu.com/?ref=blog.lido.fi), a trusted institutional custodian has integrated Lido’s prominent liquid staking middleware for Ethereum. Through this integration, Ceffu will provide custody and staking support for staked Ether (stETH) within its Qualified Wallet, an industry-leading cold storage solution. Lido middleware seeks to address common challenges associated with native ETH staking, such as illiquidity, accessibility barriers, and operational complexities. By integrating Lido middleware, Ceffu's institutional clients can stake their ETH and receive stETH, unlocking the ability to receive staking rewards while maintaining liquidity and access to their assets. In response to growing demand from institutional investors, this integration allows Ceffu's clients to leverage Lido's liquid staking solution, enabling them to stake their Ether while still using stETH for on-chain activities, such as trading, lending, and liquidity provision. Ceffu continues to serve as a trusted platform for institutional clients, enhancing the bridge between decentralized finance (DeFi) and traditional finance (TradFi). ### **About Lido Institutional** Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. For further information, please visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). ### **About Ceffu** Ceffu is a compliant, institutional-grade custody platform offering custody and liquidity solutions that are ISO 27001 & 27701 certified and SOC Type 1 & Type 2 attested. Its multi-party computation (MPC) technology, combined with a customizable multi-approval scheme, provides bespoke solutions allowing institutional clients to safely store and manage their digital assets. Institutions also benefit from Ceffu’s secure gateway to a wide range of liquidity products within the Binance ecosystem as Binance’s institutional custody partner through MirrorX, its off-exchange settlement solution. --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Lido's stETH Joins wstETH on OP Mainnet URL: https://blog.lido.fi/lidos-steth-joins-wsteth-on-op-mainnet/ Last updated: 2024-10-15T12:17:50.000Z ### *Lido’s staked ETH (stETH) is now available for use on OP Mainnet* Lido’s stETH is now available on OP Mainnet, allowing users to benefit from direct, daily staking reward rebases and an unmatched bridging experience to access a number of new multichain benefits for stETH. This represents the first deployment of Lido’s stETH on an L2, with stETH joining the already deployed wstETH as part of Lido’s Multichain strategy - a significant step towards a broader adoption of stETH across multichain ecosystems. To bridge your stETH to OP Mainnet, follow the steps outlined here: [help.lido.fi/en/articles/6579546-guide-bridging-to-op-mainnet](https://help.lido.fi/en/articles/6579546-guide-bridging-to-op-mainnet?ref=blog.lido.fi). ### **What is Lido’s stETH?** Lido’s stETH is a rebasable utility token representing your share of ETH staked through Lido. Contrary to wstETH, stETH provides holders with direct ETH staking rewards reflected through a daily supply rebase, which sees your supply of stETH increase as staking rewards come in. For more information on stETH, check out the article here: [*'What is Lido's stETH'*](https://help.lido.fi/en/articles/5230610-what-is-steth?ref=blog.lido.fi) ### **What is OP Mainnet?** OP Mainnet is an EVM-compatible L2 built around a high execution speed, low transaction fees and the security of the Ethereum network, developed with a vision to help scale Ethereum. On OP Mainnet, users can benefit from a plethora of unique DeFi integrations through which to make use of their stETH. For more information on Optimism and the OP Mainnet, visit [optimism.io](https://www.optimism.io/?ref=blog.lido.fi). ### **Motivation For Deploying stETH On OP Mainnet** Lido's wrapped stETH (wstETH) token has already been successfully integrated across various multichain ecosystems, including Arbitrum, OP Mainnet, Base, Scroll, ZKSync, Linea, BNB and others. The deployment of wstETH provides a simplified experience for DeFi integrations through the straightforward value-accruing token, as opposed to through the daily rebasing of stETH. Beyond just updating an account’s balance in the wallet, having rebaseable stETH on a multichain ecosystem works to unlock some of the following use cases: - Staking/withdrawal requests originating from L2s with accuracy accounting for the stETH rebases that occurred during the bridging period. - Performing gas payments in stETH with amounts corresponding to ether on rollups that opted in to support token gas payments (e.g. following the *Account Abstraction*). - Cross-domain stETH deposits/withdrawals (L1 and L2s) for CEXes, custodians, and service providers to support L2s directly (DeFi interactions, deposits/withdrawals), as they can charge fees with each rebase while users still see their balance changing each day. It is important to clarify that users are not required to unwrap their wstETH to stETH to realise the benefits of Lido's staked ETH on Optimism. Whether you are holding stETH or wstETH, you will continue to benefit from ETH staking rewards, faster execution speeds and lower fees. Should you choose to unwrap your wstETH to stETH, keep in mind that this can be done directly on OP Mainnet using [Lido's wrap widget](https://stake.lido.fi/wrap?ref=blog.lido.fi). The deployment of stETH on OP Mainnet represents an important step in the strategy of the Lido 'Network Expansion Workgroup' outlined in the document below. [Lido & Dencun: A Layer 2 RoadmapEthereum Dencun is here and with it comes a new stage for Layer 2s. Read on to learn more about Lido’s L2 roadmap and what’s in the store for the future.![](https://blog.lido.fi/content/images/size/w256h256/2023/09/logo2.png)Lido FinanceLido![](https://blog.lido.fi/content/images/2024/03/Lido_-_Dencun--1-.png)](https://blog.lido.fi/lido-dencun-layer2-roadmap/) ### **What’s Next?** In the coming weeks keep an eye on the Lido Twitter to stay up to date with new DeFi integrations on OP Mainnet. Alternatively, check out the [Lido DeFi Ecosystem hub](https://lido.fi/lido-ecosystem?networks=optimism&ref=blog.lido.fi) for an overview of all current OP Mainnet integrations. [![](https://blog.lido.fi/content/images/2024/10/Screenshot-2024-10-11-at-16.27.14.png)](https://lido.fi/lido-ecosystem?networks=optimism&ref=blog.lido.fi) This deployment of stETH on OP Mainnet represents the first deployment of Lido’s rebasable stETH on an L2, providing users with an exciting opportunity to benefit from direct, daily staking rewards on an L2\. In the future, expect for stETH to be deployed across a number of new L2s to further enhance the utility and relevancy of stETH. ### **Resources** - [Lido L2 Multichain](https://research.lido.fi/t/lip-22-steth-on-l2/6855?ref=blog.lido.fi) - [Guide: Bridging to OP Mainnet](https://help.lido.fi/en/articles/6579546-guide-bridging-to-op-mainnet?ref=blog.lido.fi) - [Lido Ecosystem: Optimism](https://lido.fi/lido-ecosystem?networks=optimism&ref=blog.lido.fi) ### Case Study: Comparing Liquid Staking Tokens, Native Token vs Fiat as Collateral Alternatives when Selling Call Options URL: https://blog.lido.fi/case-comparing-collateral-alternatives/ Last updated: 2025-05-28T14:57:33.000Z ### **Introduction** In the world of cryptocurrency options trading, there is more nuance to choosing the right collateral compared to traditional finance. Different collateral alternatives can impact both payout and operational efficiency. This case study compares three different collateral types when selling ETH call options: USD (fiat), ETH (native token), and stETH (liquid staking token). First, we take a look at how the total payoffs differ between the scenarios. Then, we analyze how margin management can determine the operational burden to market participants, depending on the type of collateral. ### **How does the payoff curve differ?** The payoff curves show the profit or loss of the option, depending on what price the underlying asset trades at the expiry of the option. In this example, a trader sells the following ETH call option: - **Underlying**: ETH - **Option type**: Call option - **Contract size**: 100 (quantity of underlying the call option contract represents) - **Spot price**: $2,600 - **Strike price**: $3,000 - **Option tenor**: 1 month - **Premium**: $3,000 Depending on the collateral used, the payoff curves can significantly differ. 1. **Fiat (e.g. USD)**: Trader would need to post USD of $260,000\[1\] as collateral. This results in a classical payoff curve, where the payoff is equal to the premium up until the price of the underlying ETH hits the strike price, after which the returns scale down as the trader is forced to buy ETH on the spot market and sell at the lower strike price to the party who is long this call option. The potential risk and downside are potentially limitless. 2. **Native underlying token (e.g. ETH in ETH call option)**: Trader would need to post 100 of ETH ($260,000\[1\] equivalent) as collateral. This results in a covered call payoff, because the trader already holds ETH in their portfolio and hence can benefit from the price surge of the underlying. Please read our previous case on “[Generating additional return on crypto holdings with covered call options](https://wintermute.com/generating-additional-return-on-crypto-holdings-with-covered-call-options?ref=blog.lido.fi)”, that explains how this popular strategy works in detail. The potential risk is more limited to the extreme sell-off of the underlying in the market. 3. **Liquid staking token (e.g. stETH)**: Trader would need to post 100 of stETH ($260,000\[1\] equivalent) as collateral. This results in a covered call payoff curve, but gives additional yield via staking rewards (with an average APY of 3% in 2024, translating to 0.25% monthly yield). Given LST of the underlying generally tracks the token in value and accrues rewards denominated in the native token, the overall payoff curve sits above Scenario b. \[1\] For the purposes of comparability in this case study, all trades assume full 100% funding for margin collateral, regardless of the type of collateral. In practice, funding a short call position in-kind or via LST of the underlying can lower the initial margin requirements, as it is [right way risk](https://www.investopedia.com/articles/investing/102015/introduction-wrong-way-risk.asp?ref=blog.lido.fi#:~:text=When%20counterparty%20creditworthiness%20improves%20as,way%20risk%20should%20be%20avoided.). ![](https://blog.lido.fi/content/images/2024/10/Total-payoff--FINAL.png) Let’s dig into the specific figures across the payoff curves. The table below shows the different payouts across various price levels for the underlying at expiry. ![](https://blog.lido.fi/content/images/2024/10/Total-payoff-table---FINAL.png) **Results: Posting stETH as collateral generates additional yield compared to ETH** ### **How does the margin management differ?** Another key aspect in options trading is margin management. Margin requirements are standard in both TradFi and crypto options trades to cover the counterparty risks introduced by the open position. If the current price of the underlying ETH increases, the variation margin for a short call option increases to cover the additional risk associated with the short position. By plotting the three scenarios we have on a graph, we can see the impact of the type of collateral on margin management. ![](https://blog.lido.fi/content/images/2024/10/Collateral-value---FINAL.png) 1. **Fiat (e.g. USD) in light blue**: For margin posted in USD, its value will remain unchanged no matter the changes of the underlying ETH. 2. **Native underlying token (e.g. ETH in ETH call option) in purple**: If the underlying native token is posted as collateral, its value will rise and fall together with the current market price of ETH. 3. **Liquid staking token (e.g. stETH) in blue**: Similar to the case when posting the native token ETH, however with additional accrual from staking rewards (note, these rewards are not pictured in graph, since they depend on time elapsed). **Results: Posting collateral in either the native token or liquid staking version of it can decrease the likelihood of margin calls, making daily margin operations easier.** ### **Key Takeaways** It is important to consider the payoff and margin management impact of the type of collateral one posts for an OTC trade. We have illustrated how liquid staking tokens can provide higher total payoff in certain trades and (alongside native tokens) result in a smaller operational burden on margin management. In addition, it is key to understand that for the same native token, there are various different available LSTs, so **deciding where to stake your assets is an important precursor**. Different staking providers offer different yield, withdrawal mechanics, basing operations and other considerations important in evaluating the overall risk and reward of using LSTs. ### **Explore more on the topic** Interested to learn more about LSTs and how they work? We have linked a few comprehensive articles to help you navigate the landscape: - [Lido's stETH: The mechanics of staked ETH](https://blog.lido.fi/steth-the-mechanics-of-steth/) - [stETH Use Cases within the Institutional Ecosystem](https://lido.fi/institutional?ref=blog.lido.fi) - [Guides for using stETH across Defi ](https://blog.lido.fi/category/guides/) --- ### ***Disclaimer*** *This material is presented to you on an “as is” basis and provided by Wintermute Asia solely for general informational purposes, and is intended only for sophisticated, institutional investors. Specifically, derivatives trading with Wintermute Asia is not suitable for retail persons in the United Kingdom. Trading and investing in digital assets and derivative transactions involve significant risks including price volatility and illiquidity and may not be suitable for all investors. Wintermute Asia is not liable whatsoever for any direct or consequential loss arising from the use of this material. This material does not constitute an offer or commitment, a solicitation of an offer, or commitment, or any advice or recommendation, to enter into or conclude any transactions, or to provide investment services, products or services in any state or country where such an offer or solicitation or provision would be illegal.* *Wintermute Asia does not give any representations or warranties in relation to the accuracy, validity or complicity of the information of this material, including without limitation the factual information obtained from publicly available sources considered by Wintermute Asia to be reliable; and do not accept any liability for any consequences of using the information contained in this material, and for the applicability of this material for the specific purposes and objectives of this material recipients. Any opinions or estimates expressed herein reflect a judgment made by the author(s) as of the date of publication, and are subject to change without notice. Neither this material nor any copy thereof may be taken, reproduced, or redistributed, directly or indirectly, without prior written permission of Wintermute Asia.* *The content in this opinion piece may include information, views and opinions posted by third parties. Such content, views, comments and/or opinions posted in this opinion piece are made independently by and belong personally to these third party posters, and may not purport to reflect the views, comments or opinions of any projects or organizations that they might support in any capacity; and correspondingly, the posting of such content by third parties in this opinion piece is not intended to be and shall not be construed as an endorsement of the views or opinions stated, or the reliability or accuracy of the information specified therein. Posters or any organizations or projects associated with them shall therefore not be liable or responsible for any errors or omissions, or for the results obtained from your use of such information. Where such content includes links to third-party sources, please also note that such links and the contents stated therein are also not under the control of the posters. Posters or any organizations or projects associated with them therefore shall likewise not be responsible for the reliability and accuracy of such third-party sites and their contents.* *You are solely responsible for your own decisions in this regard, and no one assumes any duty of care, responsibility or liability for any losses that you may suffer as a result of relying on the above opinion piece. The content in this opinion piece shall not be construed as financial, legal, tax or any other type of professional or regulated advice.* ### Lido Institutional: Q3 2024 Review URL: https://blog.lido.fi/lido-institutional-q3-2024-review/ Last updated: 2025-05-28T14:56:46.000Z Lido Institutional represents a dedicated group of contributors focused on advocating for the use of Lido’s open-source, liquid staking middleware by non-retail users. Lido's middleware provides a way to participate in the blockchain network validation process and get staking rewards for this activity. With a mission to democratize staking, Lido’s middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. Q3 2024 has seen institutions announcing the independent integration of stETH, thus enabling their users’ access to Lido’s liquid staking middleware. **These include exchanges and custodians such as:** - [Deribit](https://www.deribit.com/?ref=blog.lido.fi), a cryptocurrency exchange that has enabled the launch of trading and use of stETH on their platform. - [Wintermute](https://wintermute.com/?ref=blog.lido.fi), an algorithmic trading firm offers stETH OTC and accepts stETH as collateral on their platform. - [Fireblocks](https://www.fireblocks.com/?ref=blog.lido.fi), a platform delivering an infrastructure for moving, storing, and issuing digital assets that has enabled its users to stake their ETH through Lido’s liquid staking middleware for Ethereum. Fireblocks has launched this independent integration to provide in-platform access to Lido’s liquid staking protocol and stETH token. Their users can now stake their ETH, get network staking rewards, and use stETH for on-chain activities, including Fireblocks Off Exchange, which allows Fireblocks users to lock their stETH in a self-custodial wallet to trade on exchanges like Deribit and Bybit. ### **Q4 2024** As we enter Q4 2024, Lido Institutional’s dedicated group of contributors is dedicated to advocating for the continuous use of Lido’s open-source, liquid staking middleware by non-retail users. To learn more, visit the Lido Institutional website: [lido.fi/institutional](https://lido.fi/institutional?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Simple DVT: Obol Testnet #4 Results URL: https://blog.lido.fi/simple-dvt-obol-testnet-4-results/ Last updated: 2024-10-07T21:37:54.000Z The most recent Lido x Obol [Simple DVT](https://operatorportal.lido.fi/modules/simple-dvt-module?ref=blog.lido.fi) testnet has officially ended, with the aggregate validator set surpassing all of the minimum requirements to move forward to mainnet! This was the 4th testnet where Node Operators operated validators utilizing the Lido protocol with Obol’s DVT solution, following the [first testnet](https://blog.lido.fi/dvt-pilot-with-obol-network/) in 2022, the [second testnet](https://blog.lido.fi/lido-on-ethereum-obol-network-testing-v2/) in 2023 and the [third testnet](https://blog.lido.fi/simpledvt-obol-testnet-results/) at the beginning of this year. As described in the Simple DVT Module Proposal, participation in a Simple DVT testnet is a requirement for Node Operators seeking to participate in running validators using the Lido protocol via the Simple DVT Module on mainnet. ## About Simple DVT The Simple DVT Module (SDVTM) is the second mainnet Lido protocol module, added following an [on-chain Aragon vote in February 2024](https://vote.lido.fi/vote/172?ref=blog.lido.fi). The module provides the first opportunity for solo and community stakers to participate in running validators using the Lido protocol by leveraging the established design of the Curated Operator Module and DVT solutions provided by [Obol](https://obol.tech/?ref=blog.lido.fi) and [SSV Network](https://ssv.network/?ref=blog.lido.fi). Node Operators work together to run validators in what’s known as clusters. Today, the SDVTM for Lido on Ethereum consists of a total of 57 clusters, with 26 normal Obol Clusters and 21 normal SSV clusters. Additionally, there are 5 Simple DVT Super Clusters utilizing Obol and SSV Network’s technology with the ability to run more validators. For more information on Super Clusters, [read the forum post here](https://research.lido.fi/t/proposal-expanding-the-simple-dvt-module/7549?ref=blog.lido.fi). Overall, the SDVTM clusters are running over 1,350 validators and are expected to reach \~ 12,000 or 4% of the Lido on Ethereum share. Furthermore, to date, Simple DVT has facilitated the onboarding of 198 net-new Node Operators to Lido on Ethereum, including 125 solo and community stakers. It is expected after the next two onboarding rounds over 300 net-new Node Operators will be utilizing the Lido on Ethereum protocol to run validators. Another recent initiative related to the Simple DVT Module is the Decentralized Validator Vault, implemented by [Mellow](https://mellow.finance/?ref=blog.lido.fi) with provider incentives from SSV Network, Obol, and Mellow. Its goal is to boost the number of Distributed Validators (DVs) active in the Simple DVT Module, advance the decentralization and resilience of the Lido on Ethereum node operator set, improve network security, and allow stakers to receive DVT provider incentives in the form of points. For more details, please [read the blog post here](https://blog.lido.fi/decentralized-validator-vault-mellow-obol-ssv/). To learn more about the SDVTM, read the [recent blog post here](https://mellowprotocol.substack.com/p/how-we-can-help-decentralize-ethereum). ## Lido & Obol Testnet: Overview ### Participant Distribution The 4th Lido x Obol Testnet started in late April 2024 on the Holesky testnet, with 157 total participants including over 80 solo stakers & community stakers, as well as 70+ professional node operators. Participants were split into 24 clusters of 7, with an effort to minimize geographic related latency and achieve a diversity of infrastructure types (e.g. bare metal servers, home machines, and public cloud). Similarly to the previous testnet, each cluster included at least an experienced participant (either members of the Lido Curated Operator Set or participants from the prior Lido x Obol Testnets). In addition, an effort was made to include participants that had indicated significant experience with Obol based DVT during their applications. At the aggregate level, participants from 28 countries across North & South America, Europe, Asia, and Australia came together to run nodes. ![](https://blog.lido.fi/content/images/2024/10/image.png) ## The process Each cluster started the process by choosing a “Cluster Coordinator”, a participant that would be responsible for creating a Safe multi-sig and initializing the Distributed Key Generation (DKG) ceremony for each cluster. Each cluster’s SAFE also consisted of a 5/7 threshold, and represented their cluster in the Lido Node Operator registry on Holesky. Next, cluster participants each submitted and verified an “Individual Manager Address”, used for signing messages in the Safe and Obol cluster, and an optional “Individual Reward Address” that participants could choose to receive validator rewards in lieu of their Individual Manager Address. Once completed, Cluster Coordinators created their respective cluster Safes and participants configured their nodes, generated 1000 validator keys via DKG, and submitted the keys to the Simple DVT Module on Holesky. The participants started off by using MEV Boost with Aestus, Flashbots, Titan, and Ultrasound as relays. During this onboarding process, some participants were replaced due to technical difficulties or lack of activity, leading to the final number of 157 participants that would complete the trial. Before validators were activated, numerous participants reported error messages in their Validator Client and Charon logs. After analysis by the Obol team, it was determined that due to the large number of Holesky validators as well as issues with certain VCs not being able to parse inactive keys within the set timeout period, an adjustment was required. Once resolved, validators were deposited to and the performance monitoring period started. Early in the monitoring period, similarly to the previous testnet, there were some problems with the Block Proposal Success Rate. While some clusters were able to submit block proposals successfully, a significant number of clusters missed the vast majority of slots, and in some cases missed all of them. This led to the Obol team analyzing and identifying some issues: 1. A client bug affecting validator clients; 2. The large number of inactive keys on nodes causing timeouts; 3. Performance degradation due to ongoing mass slashing events on Holesky at that time. After the rollout of new Charon versions, the implementation of configuration changes and confirming that everyone was pushing metrics to Obol monitoring correctly, an improvement in block proposal success rate was observed. During this period, cluster key limits were raised to 500–1,000 for several clusters to stress test the nodes with a higher number of validators, as well as to accelerate performance improvements. Over the following weeks, performance improvements continued and the Block Proposal Success Rate improved to 81.24%, surpassing the trial’s minimum requirement of 70%. To conclude the testing, all validators were exited on August 11th, and participants successfully completed claiming of rewards via the Simple DVT Reward Distribution process. ## Performance Results ![](https://blog.lido.fi/content/images/2024/10/image-1.png) ### Obol Cluster Aggregate Results As seen in the image above, the aggregate metrics for this Lido x Obol testnet surpassed all of the Minimum Testnet Success Characteristics outlined in the Simple DVT Module Proposal, with 97.87% Uptime, 85.71% Attestation Effectiveness, and a 81.24% Block Proposal Success Rate (all metrics per [Rated](https://explorer.rated.network/?network=holesky&view=nodeOperator&timeWindow=1d&page=1&pageSize=15&ref=blog.lido.fi)). In addition, outside of Block Proposals, Obol cluster performance also surpassed the tracked aggregate average for the entire Holesky network. ### Cluster Results At the cluster level, 22/24 clusters surpassed the Uptime Benchmark, 22/24 surpassed the Attestation Effectiveness benchmark, and 19/24 surpassed the Block Proposal Success rate benchmark. All in, 75% of clusters, or 19/24, surpassed all of the observed required benchmarks. ![](https://blog.lido.fi/content/images/2024/10/image-2.png) ![](https://blog.lido.fi/content/images/2024/10/image-3.png) ![](https://blog.lido.fi/content/images/2024/10/image-4.png) ### Participant Performance While specific participant performance will not be discussed in this blog post, there is an important point to note: participants in clusters that did not reach the minimum performance benchmarks are not automatically excluded from moving forward to mainnet. In many cases, these clusters contained a majority of Node Operators who were highly cooperative within their clusters, responsive to updates and testing requirements, and whose nodes were performant. The LNOSG will meet in the coming weeks to examine the quantitative performance results of the trial at the aggregate, cluster, and participant level and will also have the opportunity to examine the qualitative metrics obtained via survey and notes from the trial from the Lido DAO and SSV contributors. Following that, a forum post will be made on the Lido Research Forum to propose a list of the clusters and participants to move forward to mainnet. Each participant will receive an email with individual feedback noting the proposed assessment and inviting them to participate in the cluster formation discussion and also optionally in future testnets if they so choose. ## Path to Mainnet Following the posting of the LNOSG suggested shortlist of participants to the forums, the DAO will have one week to discuss the proposal and state any objections. If no objections arise, clusters will begin the coordination process and the Simple DVT Module Committee will commence Easy Track motions (which can be rejected by LDO token holders) to register the clusters on the Lido Simple DVT Module registry. In parallel, the SSV Network Testnet #4 is currently underway and expected to be complete by late November or early December. Upon completion, a similar blog post will be shared with the community and an additional LNOSG process will follow for those participants. ## What's next? Once the ongoing SSV Testnet #4 concludes, attention will shift towards the [Community Staking Module (CSM)’s upcoming mainnet launch,](https://blog.lido.fi/presenting-community-staking-testnet/) which also allows for usage of DVT. The Community Staking Module is the first permissionless module, enabling anyone to use the Lido protocol to run validators. Specifically aimed at solo and community stakers, whether running a vanilla node or coordinating as a group with Distributed Validator Technology, CSM enables more people to become operators. This not only enhances decentralization, but also significantly democratizes access to Ethereum staking, making it more inclusive and resilient. Interested in participating? You can [join the CSM testnet](https://csm.testnet.fi/?ref=blog.lido.fi) today or read about the [results](https://blog.lido.fi/community-staking-testnet-overview/) so far, and [follow along with the governance votes](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xd0d7bfd68f2241524dbb14ae6fe0e8414b9fe3e0dcfc50641a8d28f0067d6693) for its release and deployment on mainnet. ## Appendix: Obol Testnet #4 Participants **Cohort 1**: NakoTurk, GDiC, Long, CryptoBoru, polikosi, CryptoCrew Validators, Nethermind **Cohort 2**: enti, Phuc Vu, hereWeGo, Tessier-Hashpool, Hayhouse Projects, marisarze, POSTHUMAN **Cohort 3**: 🔥STAVR🔥, Astro-Stakers, Yspud, CrisOG, Orion, dimkatoy, CVJoint **Cohort 4**: Thoma Technologies LLC, enti, Chuy Garcia, Svetlana, lightningstrike, rodion007, StakeCat **Cohort 5**: rch, Stake Village, Albinos, Altair, CertHum, RockLogic GmbH, pWse **Cohort 6**: Luck, NOXU, Girnaar Nodes, Sam (Stakesaurus), Cosmostation, Blockblaz, TWM **Cohort 7**: ITRocket, Tané, hellman, IT Times.com, LinkRiver, nethon, kycoinapple **Cohort 8**: XHash, DxPool, Jon | AussieStake, Sam (Stakesaurus), Benedict Chan, Kingnodes, Dora Factory **Cohort 9**: Zim, breskulpeak.com, GBeast, Kukis Global, CryptoCrew Validators, Genry, Axol.io **Cohort 10**: Viacheslav Smirnov, Cusp, Alirus, Staking4All, Blockblaz, Donna, kamran **Cohort 11**: ShardLabs, Marlon, AutoStake, gumat, masha.m, gn2020, Attestant BVI **Cohort 12**: enti, Leo Shapeero, StakeCat, Igor, swiftstaking, Jerod, DSRV **Cohort 13**: Kiln, AinsleyKeith, 0xFury, ChainUp, Spirit, Tayfun AYDIN, StakeLab.zone **Cohort 14**: Eridian, ipetkov.eth, Kiarra, Volodya, kxinon, cryptozab, bountyblok **Cohort 15**: farukyasar, VladCrypto, swiftstaking, Nodexplus, crazydimka, GLCstaked, nodeADDICT **Cohort 16**: OnThePluto, ShardLabs, Ashalance, Cosmostation, Candyto, aqquma, TRUPROCRYPTO **Cohort 17**: Gavryushev, Stardust Staking, shimbob, AmoretAaron, Syncnode, Zhantai, 2xStake **Cohort 18**: m0h5en, \[NODERS\], eth10000, d0ri0n, Strong, Openbitlab, getsafari **Cohort 19**: Blockshard, Silent Validator, DreamGallery, larmork, STAKKY, Vault Staking, Dan **Cohort 20**: 2xStake, Professor Parpinsons, makaridza, BlockPI Network, Sergi | rwrnodes, Openbitlab, Florest **Cohort 21**: Matrixed.Link, Tannie, Monika, Mrs\_ml, CrazzyWizzard, SnakePliskin, Pavlo **Cohort 22**: bountyblok, Binh Duong, Bablovcoin, Blockshard, Verre, CodeGp, Let's Node **Cohort 23**: antotg, smc, Syncnode, Dmitry S, Alex, jeni, Luganodes **Cohort 24**: SbGid, Enigma, schisme, jeronima, antotg, 5quat, Stakelab.zone ### CSM Early Adoption: Unique Opportunity for Ethereum Solo Stakers URL: https://blog.lido.fi/csm-early-adoption/ Last updated: 2026-06-03T21:04:56.000Z ## TLDR - The Early Adoption period offers solo stakers priority access to CSM mainnet and the unique benefit of a reduced bond requirement (1.5 ETH) for initial validators, as well as up to 2.37x potential higher rewards per ETH compared to solo staking. - Eligible groups include Ethereum/Gnosis solo stakers, Obol Techne credential holders, Lido OAT holders, and high-performing CSM testnet participants, etc. - Check your eligibility [here](https://lidofinance.github.io/csm-ea-checker/?ref=blog.lido.fi). ## What is CSM? Solo stakers are an integral part of Ethereum’s censorship resistance and credible neutrality. Their importance has been widely recognized within the Ethereum community since the launch of the Beacon Chain. As part of the Ethereum ecosystem, Lido’s [Community Staking Module](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) (CSM) - the first Lido on Ethereum module allowing for permissionless Node Operator entry - aims to empower new solo operators to participate in Ethereum validation while offering existing stakers an alternative pathway. ## The Early Adoption Program As part of the launch, the Early Adoption program offers exclusive bonuses to early participants, specifically designed to reward community stakers for their contributions to Ethereum’s security. Eligible operators will benefit from reduced collateral requirements and enhanced rewards upon the launch of the CSM mainnet. As proposed, all eligible operators in the program will be able to: 1. Run their first Ethereum validator on CSM with a reduced bond requirement of only 1.5 ETH, compared to the 2.4 ETH required for non-early Adoption operators. This represents one of the most competitive bond requirements available in the market; 2. Potentially up to [2.37](https://docs.google.com/spreadsheets/d/17mEuaI8ui-pmTTwev1FFIhch1X90HefpDB65kKyXDUU/edit?gid=0&ref=blog.lido.fi#gid=0&range=D27) times higher rewards per ETH compared to vanilla solo staking, providing a significant incentive for early involvement; 3. Gain early access to the CSM mainnet, allowing them to set up validators from the outset without facing unnecessary competition from professional operators and large staking entities for ETH allocations; 4. Enjoy all these benefits whenever they participate in the CSM mainnet, even beyond the Early Adoption phase. *Note: Operators can run up to 12 validators during the Early Adoption phase. After this phase, there is no limit on the number of validators each operator can run.* ## Early Adoption Eligibility In addition to the curated Ethereum solo stakers, several other groups have been included. The final proposed list of sources is presented below, and the specific filtration rules are [detailed](https://research.lido.fi/t/community-staking-module/5917/62?ref=blog.lido.fi) in the research forum: - [Ethereum solo stakers list](https://github.com/rated-network/solo-stakers?ref=blog.lido.fi) formed by the Rated; - [Ethereum solo stakers lists](https://github.com/Stake-Cat/Solo-Stakers/tree/main/Solo-Stakers?ref=blog.lido.fi) formed by StakeCat; - [Gnosis solo stakers list](https://github.com/Stake-Cat/Solo-Stakers/tree/main/Gnosischain?ref=blog.lido.fi) formed by StakeCat; - [Obol Techne credentials](https://blog.obol.org/introducing-the-obol-techne-credential/?ref=blog.lido.fi) holders; - [Lido OAT holders](https://app.galxe.com/quest/lido?ref=blog.lido.fi) with 6+ points on Lido Galxe Space: Lido community stakers, such as participants from the Simple DVT testnet who claimed the associated OATs, may be categorised within this source; - Performant CSM testnet participants; - Purchasers of [Dappnode Home x Lido](https://dappnode.com/collections/hot-releases/products/home-lido?ref=blog.lido.fi) before September 30th. To check the Early Adoption eligibility for mainnet, please visit [the dedicated checker page](https://lidofinance.github.io/csm-ea-checker/?ref=blog.lido.fi) or review the address collection in the [.json](https://github.com/lidofinance/community-staking-module/blob/develop/artifacts/mainnet/early-adoption/addresses.json?ref=blog.lido.fi) file. ### Bringing Liquid Staking to the Fireblocks Network URL: https://blog.lido.fi/bringing-liquid-staking-to-the-fireblocks-network/ Last updated: 2025-05-28T14:56:20.000Z [Lido Institutional](https://lido.fi/institutional?ref=blog.lido.fi) is thrilled to share that [Fireblocks](https://www.fireblocks.com/?ref=blog.lido.fi) has integrated Lido, enabling their users to stake their ETH with Lido’s liquid staking middleware for Ethereum. In response to growing institutional demand, Fireblocks has launched this integration to provide in-platform access to Lido’s liquid staking protocol and stETH token. Users can now stake their ETH, receive rewards, and use stETH for on-chain activities, including [Fireblocks Off Exchange](https://www.fireblocks.com/platforms/off-exchange/?ref=blog.lido.fi), which allows Fireblocks users to lock their stETH in a self-custodial collateral wallet to trade on exchanges like Deribit and Bybit. Liquid staking enables users to transfer and operationalize staked tokens without the firm requirements that lock up assets for stakers on the Ethereum network. It allows users to deposit tokens and receive tradable liquid tokens (stETH) in return, thereby unlocking the ability to receive staking rewards while maintaining liquidity and access to their assets. Liquid staking with Lido may be useful for institutional ETH holders and can provide the ability to stake without the requirement of maintaining complex staking infrastructure. While Ethereum direct-stakers must stake in increments of 32 ETH, liquid staking allows users to stake any amount of ETH, with the ability to access instant liquidity. This flexibility also has the potential to benefit retail-facing exchanges and fintechs, whose end users might have less than 32 ETH but want to reap the rewards of ETH staking. Those with at least 32 ETH can unlock capital efficiency through liquid staking, leveraging their staked ETH tokens (stETH) for on-chain activities. With the Lido integration, Fireblocks customers can stake their ETH without locking it up or having to maintain complex infrastructure – all while still participating in on-chain activities and receiving network rewards from their staked ETH. ### **About Fireblocks** Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through patent-pending SGX & MPC technology. For further information, please visit [www.fireblocks.com](https://www.fireblocks.com/?ref=blog.lido.fi). ### **About Lido Institutional** Lido is an open-source, liquid-staking middleware that provides a way to participate in the blockchain network validation process and reap rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. Lido users can interact with various third-party DeFi applications that have independently integrated and support the liquid staking tokens. For further information, please visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Introducing Drop: Liquid Staking Protocol for the Interchain URL: https://blog.lido.fi/introducing-drop-liquid-staking-protocol-for-the-interchain/ Last updated: 2026-08-26T15:16:55.000Z ### Overview: - [Drop](https://x.com/dropdotmoney?ref=blog.lido.fi) is a liquid staking protocol designed for Interchain assets, backed by the [Lido Alliance](https://research.lido.fi/t/lido-alliance-an-ethereum-aligned-ecosystem/7475?ref=blog.lido.fi). - Built as an integrated application on [Neutron](https://www.neutron.org/?ref=blog.lido.fi), Drop aims to strengthen the economic viability of sovereign blockchains by transforming stagnant, frozen assets into streams of opportunity. - Drop enables seamless smart contract interactions, supporting capital-efficient use cases like leveraged staking without slippage or trade fees. - You can now liquid stake ATOM with Drop to earn staking rewards without locking assets, deploy staked ATOM in apps for additional rewards & benefits, auto-compound rewards and more. - Mars V2 is now live on Neutron, allowing you to receive Droplets by borrowing ATOM instead of purchasing it, eliminating direct exposure. ## What is Drop? Drop is a liquid staking protocol designed for Interchain assets, backed by the Lido Alliance. Led by former Lido and P2P contributors, Drop aims to strengthen the economic viability of sovereign blockchains by transforming stagnant, frozen assets into streams of opportunity. ![](https://blog.lido.fi/content/images/2024/09/What-is-Drop-.png) Built as an Integrated Application on Neutron, Drop benefits from deep integrations with DeFi partners, offering users the best yield and user experience. ## The Drop Mission Despite the tremendous growth in the Interchain, billions of dollars remain staked but unusable, leading to capital constraints that hinder ecosystem growth and increase the risk of network failure. Drop’s mission is to address these challenges by unlocking the potential of these staked assets, transforming them into active, reward-generating resources that strengthen blockchain economies. ## How Drop Works Drop allows users to stake their Interchain assets and receive dAssets in return—receipt tokens that represent their staked positions. For example, staking ATOM with Drop will reward users with dATOM. These dAssets automatically compound staking rewards and can be utilized throughout Drop’s ecosystem to earn additional rewards. Liquid staking with Drop via dAssets enables users to earn staking rewards without locking their assets, deploy them in various apps for additional yield and benefits, auto-compound rewards, exit anytime, stay eligible for airdrops, support ecosystem growth, and earn DROP tokens. Apps gain from new users and capital, while networks benefit from increased economic activity without sacrificing network security. ### What Makes Drop Different Drop’s architecture offers unique advantages over other liquid staking protocols. As an Integrated Application on Neutron, Drop benefits from synchronous composability, allowing its smart contracts to interact seamlessly with other applications, enabling capital-efficient use cases like leveraged staking with zero slippage or trade fees. Additionally, Drop’s system is highly scalable, with the ability to onboard new networks and assets in a single transaction while minimizing risks. Drop currently supports liquid staking for ATOM, with plans to add support for TIA soon. Other Interchain assets will be introduced in the future, further expanding Drop’s capabilities and opportunities for users. ### Fees & Tokenomics Currently, Drop allocates 10% of staking rewards from liquid staked assets into a dedicated pool. After the DROP token is launched, the DROP DAO will determine how these assets are used, which could include distributing rewards to DROP stakers or creating Reserve Fund. ## The Droplets Program The [Droplets Program ](https://medium.com/drop-protocol/introducing-the-droplets-program-the-ultimate-guide-to-earning-drop-d80fd58c6a3e?ref=blog.lido.fi)is designed to coordinate market participants to maximize the economic welfare of the Interchain and measure each participant’s contribution to the protocol’s success. ![](https://blog.lido.fi/content/images/2024/09/Droplets.png) A total of 100,000,000 DROP tokens (10% of the total supply), the governance token of Drop Protocol, will be distributed to participants in the program. Users can earn Droplets by liquid staking, using dAssets within ecosystem applications, and referring friends. At the program’s conclusion, Droplets holders will receive Drop tokens and become the inaugural members of the Drop DAO. As Drop decentralizes, the community will play a crucial role in the protocol’s long-term success, with Droplets ensuring that the most committed members lead the DAO and receive the highest rewards. DAO members will have the authority to influence the protocol’s design, asset support, and the management of the Drop Treasury. ### Validator Selection & Accountability Drop selects validators based on their performance and infrastructure, with validators required to maintain 95% uptime,operate independently of centralized custodians, and run their own infrastructure. If a validator’s performance decreases or if they misbehave, their stake will be redistributed across the remaining set. ### Security Focus Security is a core focus for Drop. Its modular smart contract architecture is designed to minimize risk and ensure recoverability: - Protocol upgrades do not introduce systemic risk; instead, they are able to introduce new functionality with minimal code changes. - Modularization contains risk: if a component fails, the system simply pauses, improving the security and recoverability of the protocol. - Modularization enables better risk response: if an issue is detected with a component, that specific component can be safely paused and a fix introduced while the rest of the protocol continues to operate properly. - Because components are standardized and reusable, the underlying code only becomes more and more battle-tested as time passes. Key security practices include: - Continuous security audits from industry leaders like Oak Security and Ottersec. - Rigorous testing, including unit and end-to-end tests. - Real-time 24/7 monitoring and alerting systems. - A $1M bug bounty program through Immunefi. - Over $2B of economic security from ATOM via the Cosmos Hub. This multi-layered approach ensures that Drop remains a reliable and secure protocol for users. ## What's Next? Looking ahead, the Drop app will bring a range of new features, including fresh liquid staking assets and native ETH staking with Lido. Users can explore expanded distribution and use cases for wstETH in the Interchain, alongside new ways to use and custody dAssets for enhanced rewards. ![](https://blog.lido.fi/content/images/2024/09/What-s-next-.png) A major highlight is the upcoming rapid unstaking feature, which will significantly cut down the time required to unstake dAssets, making the process faster and more efficient. Stay tuned for more news on Drop and their journey as part of the [Lido Alliance](https://research.lido.fi/t/lido-alliance-an-ethereum-aligned-ecosystem/7475?ref=blog.lido.fi). ### Resources: - [Drop: Twitte](https://x.com/dropdotmoney?ref=blog.lido.fi)r - [Staking with Drop](https://medium.com/drop-protocol/guide-liquid-staking-atom-with-drop-b5920574fc02?ref=blog.lido.fi): Guide ### Wintermute Enables Collateral Support of stETH URL: https://blog.lido.fi/wintermute-enables-collateral-support-of-steth/ Last updated: 2025-05-28T14:56:01.000Z [Lido Institutional](https://lido.fi/institutional?ref=blog.lido.fi) contributors are excited to share that stETH joins Wintermute’s multi-currency collateral support for OTC trading. With this update, you can stake your ETH, get rewards and for the first time, use stETH as collateral for OTC trading at [Wintermute](http://wintermute.com/?ref=blog.lido.fi), allowing institutions to maximize their assets and improve trading efficiency. Out of the 120M ETH in circulation, only 33.8M is staked, with \~10.2M through Lido. While 70% of ETH remains completely unstaked for receiving staking rewards, Lido Institutional contributors believe stETH has significant potential beyond DeFi, and with Wintermute extending stETH’s utility it will unlock new opportunities that were previously out of reach. This setup is far more productive than traditional fiat collateral, which usually sits idle. It offers greater flexibility and capital efficiency. Wintermute is committed to being at the forefront of crypto innovation and providing counterparties with more efficient ways to trade. ### **About Wintermute** [Wintermute](https://wintermute.com/?ref=blog.lido.fi) is a leading algorithmic trading firm that is focused on the innovative digital asset markets and is building the future of finance while also empowering its employees to act like owners and achieve more than is possible elsewhere. Our Mission is to enable, empower and advance the truly decentralized world for more transparent, fair and efficient markets and products. For further information, please visit [www.wintermute.com](https://www.wintermute.com/?ref=blog.lido.fi). ### **About Lido Institutional** Lido is an open-source, liquid-staking middleware, that provides a way to participate in the blockchain network validation process and get rewards for this activity. With a mission to democratise staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. Users of the middleware can interact with various third-party DeFi applications that have independently integrated and support the liquid staking tokens. For further information, please visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Delegation: Enhancing Governance URL: https://blog.lido.fi/delegation-enhancing-governance/ Last updated: 2024-09-02T14:10:03.000Z ## Overview - Lido DAO introduces on-chain delegation and a Delegate Incentivization Program through [Vote 178](https://vote.lido.fi/vote/178?ref=blog.lido.fi) and [Snapshot vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xa502cf80451192672313911ce558e74799626da3b3b66130e21c6cd19707e584). This initiative establishes a Public Delegate Platform designed to streamline governance, increase participation, and improve transparency in decision-making. - A six-month Pilot Delegate Incentivization Program, funded with $150,000 in LDO, will incentivize active delegates who meet performance criteria, encouraging meaningful contributions to Lido’s governance. - Token holders maintain full control over their votes, with the ability to override delegate decisions, ensuring their views are always represented. Delegates, in turn, play a crucial role in shaping the future of Lido DAO, with opportunities for significant impact and recognition. Read on to find out how you can engage in one of Ethereum’s largest DAO’s. ## Introduction to Delegation Following a Snapshot vote and an on-chain vote, Lido DAO will be introducing on-chain delegation and incentive programs to enhance governance participation and to streamline decision-making across the DAO. Delegation addresses three critical challenges in Lido DAO: overcoming voter apathy, increasing clarity in the governance process, and boosting the number of meaningful actors involved. As a project matures, voter fatigue can affect participation. Introducing public delegates can revitalize governance by refocusing efforts and increasing voting activity. This strengthens protocol security, making it more resistant to attacks, which is essential for robust governance. Delegation also brings more experts into governance, enriching the decision-making process. These experts actively involve their communities, clarifying proposals, and making the governance process more transparent and inclusive. On-chain delegation not only empowers public delegates but also simplifies user interactions. By enabling delegation to accessible wallets, barriers to voting participation are lowered, making it easier for token holders to engage. This initiative streamlines governance, increases participation, and enhances security, paving the way for a stronger, more engaged Lido DAO. In navigating the complexities of crypto governance, delegators now share a heightened responsibility to act in the best interests of Lido DAO and align with [Lido Mission, Vision and Purpose](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x739fbe56425d355b5e41c22bb346b7a8217afd9e84aa49863648b1c641a482e3), whilst gaining recognition for their actions. ## Key Features of On-Chain Delegation For token holders, the system offers several key features: they retain the right to participate directly in votes and can override votes cast by their delegates. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXferDg9M49xzSVQYb9Jen3GO_8v6UQt6730UScjCgvt66gd0skdYpen48WumfeXHXfvLyTmRVu4I2U1SQlQh833cX7gbfxX4u-J6i71icsPd6QJpmvaLLyzWnZmDBn7wuh-8bb56Q4FkdY1UX5ndGSyHJU?key=W91347CmX__ClH5CarD-7A) Token holders are allowed to assign only one delegate address at a time, encompassing all their voting power (VP), but they have the flexibility to delegate and re-delegate during an ongoing vote, with their VP adjusted accordingly. Importantly, they can’t delegate to a zero address, their own, or a previous delegate's address. For delegates, the system enables the use of delegated VP to participate in votes and provides the flexibility to change decisions and re-vote with a different option, utilizing the voting power of one or more token holders. Simple Delegation introduces updates to the *Voting* and *TRP\_Voting\_Adapter* contracts, creating a straightforward solution to provide on-chain delegation with a focus on security. ## Becoming a Delegate First up, create a thread in the [“Delegate Platform”](https://research.lido.fi/c/delegate-platform/22?ref=blog.lido.fi) category on the Lido DAO Research Forum, and engage with the community by sharing your decisions and rationales. Being a public delegate offers several benefits, including gaining recognition, attracting token holders, and receiving reimbursement for gas expenses incurred during on-chain voting. As a public delegate, you are expected to maintain a voting participation rate above 70% and communicate transparently by regularly updating your Delegate Thread with your voting decisions and rationales. If you hold more than 0.1% of the total token supply in VP, the gas expenses would be compensated. Additionally, you may participate in the Delegate Incentivization Program (DIP). ## Incentivization Program The DAO [has approved an incentivization program](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xa502cf80451192672313911ce558e74799626da3b3b66130e21c6cd19707e584) funded with $150,000 in LDO, calculated at the Time-Weighted Average Price (TWAP) over its duration from September 19, 2024, to March 18, 2025\. Delegates with over 2 million LDO delegated on Aragon and Snapshot are eligible for equal shares of the grants, with a cap of $15,000 worth of LDO per delegate for any three-month period. To receive incentives, you need to participate in 70% of the votes, remain a public delegate, share your reasoning on the delegate platform, and also meet the expectations of an incentivized delegate. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXdl5my2lN2fHq8OGPl8Onwax0vy2Z_FiwTzrCR2Qj9HDP-U4DNajnpbLZMYiHDRt1UUNfrXmGU4enOQ7MS5oI8ajExsrGcDngYnJay_AnQs_wbozCbhyuyglVmNG1zZ-eXSEVh1l0FeFV9Ekl0rOYeTJNHj?key=W91347CmX__ClH5CarD-7A) ## Key Dates of DIP Pilot: ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXc5fByzntQd6fOmamZFkpS4vXmA3jNwAzYc4DRdMamqAzIRWZeKwdzqzfNmyI3tXg0M1FfzdJ7EYp8IyAKsyhsiIlIgUaGPsZC7BOnB4mdXk73bIHG0cbO7owSkw4Sbko99V4a4ggn22YumKcNuB507E51T?key=W91347CmX__ClH5CarD-7A) - Delegate Application Period: Applications for delegates will be open from August 9 to August 25. - Program Start: The first season of the incentivization program will commence on September 19. - First Quarter Incentives Distribution: Incentives for the first quarter of the pilot will be distributed from December 18 to December 31. - Second Quarter Incentives Distribution: Incentives for the second quarter of the pilot will be distributed from March 18 to March 31. ## Delegate Oversight Committee To ensure the smooth functioning of the delegation system, a Delegate Oversight Committee will be established. This committee will facilitate delegate operations, evaluate delegate performance, and distribute incentives based on evaluation. Additionally, it will maintain transparent communication with contributors, delegates and token holders, and publicly report all changes and events. In the event a delegate does not adhere to the criteria for being a public delegate, the following actions can be taken: ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXdQK6vxVjUNCfpm3OATRr0cCCPW2AjY3rTRcp0nyUs-xTqDad9AeXeFu7He67ZiL4ndkLF_a9-UgSpdbjIyjokny_23An0ogp7gvumNN0ihjdDuDxYySOvKhXFC1RaxuBAuN-2wrpiPkIamjE3rjPnSp8gb?key=W91347CmX__ClH5CarD-7A) Additionally, the committee will evaluate work and engagement in governance beyond quantitative criteria. More details can be found in the proposal. ## Conclusion The introduction of On-Chain Delegation via [Vote 178](https://vote.lido.fi/vote/178?ref=blog.lido.fi) and [Snapshot Vote to Establish Public Delegate Platform and Incentivization Program](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xa502cf80451192672313911ce558e74799626da3b3b66130e21c6cd19707e584) marks a pivotal step in Lido DAO’s governance evolution. By empowering both token holders and delegates, the aim is to create a more resilient, transparent, and inclusive decision-making process. ## How to Get Involved 🫵 Want to become a delegate for Lido? Begin by posting [your application here](https://research.lido.fi/c/delegate-platform/22?ref=blog.lido.fi). 🫵 Want to be involved in selecting the delegates? Make sure to delegate your LDO [here](https://vote.lido.fi/delegation?ref=blog.lido.fi). ### Lido On BNB Chain URL: https://blog.lido.fi/lido-goes-to-bnbchain/ Last updated: 2024-09-12T07:43:17.000Z Lido Contributors are pleased to announce the launch of staked ETH (wstETH) on BNB Chain. Initiated through an on-chain community vote, this canonical bridge to BNB Chain paves the way for Lido’s staked ETH into the prolific and well developed DeFi ecosystem. This expansion represents Lido’s first secure integration with a Layer-1 blockchain beyond the Ethereum ecosystem. The canonical bridge solution showcases an innovative collaboration between two prominent Web3 interoperability networks, Axelar and Wormhole. The resulting collaboration has led to the creation of a canonical bridge that will unlock new liquidity and bolster DeFi opportunities across multiple ecosystems. **➡️ To bridge your wstETH to BNB Chain**: [portalbridge.com](http://portalbridge.com/?ref=blog.lido.fi) **➡️ For tutorials & instructions**: [https://help.lido.fi/en/articles/9739043-bridging-wsteth-to-bnb-chain](https://help.lido.fi/en/articles/9739043-bridging-wsteth-to-bnb-chain?ref=blog.lido.fi) ## What is BNB Chain? [BNB Chain](https://www.bnbchain.org/en?ref=blog.lido.fi) is a high-performance blockchain platform designed to support decentralized applications (DApps) and decentralized finance (DeFi). It uses a Proof-of-Staked-Authority (PoSA) consensus mechanism, combining elements of both proof-of-stake and authority consensus models, to ensure scalability and security. BSC also enables developers to build user-friendly, scalable applications within its ecosystem. It is part of the broader BNB Chain ecosystem that prioritizes decentralized governance and includes various tools and protocols for developers and validators. BNB Chain is one of the larger ecosystems in the DeFi space with over $4b in TVL spread across 100’s of prominent protocols. For an overview of the leading BNB Chain protocols, check out [defillama.com/chain/BSC](http://defillama.com/chain/BSC?ref=blog.lido.fi). ## Bridging to BNB Chain The bridging process is straightforward and transfers your staked ETH to BNB Chain within minutes. Before beginning, ensure you are working with Lido's wrapped staked ETH (wstETH). If you need to wrap your ETH or stETH into wstETH, visit [stake.lido.fi/wrap](http://stake.lido.fi/wrap?ref=blog.lido.fi). 1. Go to [portalbridge.com](http://portalbridge.com/?ref=blog.lido.fi). 2. In the “From” section, choose Ethereum as the network and wstETH as the asset. In the “To” section, select BSC as the network. 3. Connect your wallet to both networks. 4. Enter the amount you wish to bridge. 5. Click “Approve and proceed with transaction” to confirm the bridging. You might be asked to approve wstETH permissions. After approval, click the button again to finalize the process. That’s it! Your wstETH should be available on BNB Chain within approximately 15 minutes. ## FAQ ### What is Lido? [Lido](https://lido.fi/?ref=blog.lido.fi) is a multi-chain staking solution that provides a simple and secure way to earn interest on your digital assets. With a mission to democratise staking, Lido lets users stake their digital assets without the need to lock them or maintain hardware. ### What is BNB Chain? BNB Chain is a blockchain network designed for high-performance applications and decentralized finance (DeFi). It consists of BNB Beacon Chain (for governance) and BNB Smart Chain (for smart contracts and decentralized apps). BNB Chain offers fast, low-cost transactions, making it a popular choice for developers and users. ### What is wstETH? Lido's wstETH (wrapped stETH) is a non-rebasing version of stETH. Unlike stETH, where your balance increases daily as rewards are distributed, wstETH keeps your balance constant. Instead, staking rewards are reflected in an increase in the value of wstETH over time. ### How do I get wstETH? You can obtain wstETH by wrapping your stETH or ETH on the Lido platform at [stake.lido.fi/wrap](http://stake.lido.fi/wrap?ref=blog.lido.fi). ### How do I bridge to BNB Chain? The bridging process to BNB Chain is simple and only takes a few minutes. For a full bridging guide, check out the following [article](https://help.lido.fi/en/articles/9739043-bridging-wsteth-to-bnb-chain?ref=blog.lido.fi). ### Are there any bridging fees? Yes, you’ll need to cover network fees to pay for gas costs. On Ethereum, these fees are paid in ETH, and on BNB Chain, they are paid in BNB. Additionally, there are relayer fees required for the bridging process. ### How long does it take to bridge? Bridging from Ethereum to BNB Chain usually takes around 15 minutes. Conversely, moving assets from BNB Chain to Ethereum typically takes about 1 minute. ## Resources - [Snapshot: wstETH to BNB](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xcc52cdc83273b42a056cfc632889355595821a2cc9a59ba8adff66b30e9718f9) - [Proposal: wstETH to BNB](https://research.lido.fi/t/wormhole-x-axelar-lido-bridge-implementation-for-wsteth-on-bnb-chain/6012/31?ref=blog.lido.fi) - [BNB Chain Overview](https://defillama.com/chain/BSC?ref=blog.lido.fi) - [BNB Chain Bridging Guide](https://help.lido.fi/en/articles/9739043-bridging-wsteth-to-bnb-chain?ref=blog.lido.fi) ### The Decentralized Validator Vault ft. Mellow, Obol & SSV URL: https://blog.lido.fi/decentralized-validator-vault-mellow-obol-ssv/ Last updated: 2026-08-26T15:07:21.000Z ### TL;DR: \- [The Decentralized Validator Vault](https://app.mellow.finance/vaults/ethereum-dvsteth?ref=blog.lido.fi) (the “Vault”) - implemented by Mellow - is designed to boost the number of Distributed Validators active in the Simple DVT Module, advance the decentralization and resilience of the Lido on Ethereum node operator set, improve network security, and allow stakers to potentially benefit from DVT provider incentives. \- This Vault will stake ETH through Lido on Ethereum, with 90% of potential Obol and SSV Network incentives directed to vault stakers, with 10% going towards Node Operators. \- The Vault offers stakers the chance to receive rewards from both stETH rewards, and DVT provider incentives from protocols like SSV, Obol, and Mellow. \- The Vault will initially open with limited capacity, gradually increasing alongside the Simple DVT Module’s growth following a successful DAO vote. The goal is to reach approximately 11,868 validators, evenly distributed between Obol and SSV, over the coming months. This expansion could ultimately amount to around 380,000 ETH, representing roughly 4% of Lido’s total staked assets. ### In Brief: What is the Simple DVT Module? DVT (Distributed Validator Technology) enhances the security, resilience, and decentralization of Ethereum validators. It allows a single validator’s duties to be distributed across multiple nodes, reducing the risk of a single point of failure and ensuring higher network uptime. When node operators integrate this technology, Ethereum benefits from improved fault tolerance and a more diverse validator set, which includes both professional and home operators. Simple DVT supports the distribution and robustness of the Ethereum network by enabling a more decentralized and secure staking environment, facilitating broader participation and collaboration among various types of node operators. To date, the Simple DVT Module has onboarded nearly 180 net-new node operators to the Lido protocol, including over 100 solo and community stakers. These node operators are using the protocol to run validators on six different continents, utilizing every type of execution layer and consensus layer client, and operate nodes using a diverse mix of infrastructure. ### The Decentralized Validator Vault: An Overview [The Decentralized Validator Vault](https://app.mellow.finance/vaults/ethereum-dvsteth?ref=blog.lido.fi), initiated by the Mellow team (a member of the Lido Alliance), aims to serve as a focal point for user stake to access DVT benefits and incentives. The Mellow developed vault accepts (W)ETH, and stakes it within the Lido on Ethereum protocol to channel new stake into the Simple DVT Module, thereby enhancing network security and decentralization. Under this plan, 90% of Obol Contributions and SSV mainnet incentives eligible for validators tied to the Simple DVT Module are directed to the vault, benefiting its users, while the remaining 10% goes to supported Node Operators in their respective Simple DVT clusters. In addition, stakers to the Vault will also receive points from Mellow. The Vault strategy facilitates faster activation of Simple DVT validators, therefore improving the overall resilience and security of the Lido on Ethereum validator set. It also creates additional resilience and decentralization of the underlying Ethereum network by driving more validators to underrepresented geographies, diverse infrastructure and client types, and importantly, to many net-new solo and community stakers. ## The Vault Structure The capacity of the Vault would be controlled via the Mellow administrator, reflecting the current stakeable capacity of the Simple DVT Module, with up to a 10% additional buffer. ![](https://blog.lido.fi/content/images/2024/08/Structure.png) These parameter changes would reflect when key limits of clusters within the Simple DVT Module are raised, as explained in the [Simple DVT Proposal](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/1?ref=blog.lido.fi) and [Expansion Proposal 1](https://research.lido.fi/t/proposal-expanding-the-simple-dvt-module/7549/7?ref=blog.lido.fi). Steakhouse Financial will act as the curator of the vault, responsible for processing withdrawal requests (in wstETH) on a daily basis. ## Incentives Eligibility To dissuade possibly harmful effects to the Lido on Ethereum protocol due to farming incentives, an analysis will be conducted on Vault stakers. In order to be eligible to potentially receive full vault incentives for the capital provided, stakers must: 1. Hold a position for a minimum of 3 days in the Vault through the conclusion of the Snapshot period. Every two weeks from the launch of the vault a Snapshot will be taken after which point totals will be updated. 2. Not unstake existing stETH or wstETH that is then re-staked via the Vault from the moment of Vault launch. The points are calculated based on ETH staked to and persisting within the Vault during the relevant snapshot period minus any stETH withdrawn after the launch of the vault. 3. Not dispose of (or swap) existing stETH on DEXs/CEXs: Similar to the above, the points would be calculated based on non-swapped ETH staked to and persisting within the vault during the relevant snapshot period. For more info, here's an [F.A.Q](https://docs.mellow.finance/dvsteth-vault/overview?ref=blog.lido.fi#faq) the Vault guidelines. ## The Obol Vault [The Obol Collective](https://blog.obol.org/announcing-the-obol-collective/?ref=blog.lido.fi) is a community of 50+ entities and thousands of individuals focused on enhancing Ethereum’s security, resiliency, and decentralization through distributed validators (DVs). ![](https://blog.lido.fi/content/images/2024/08/obol.png) The vault operates on the only DV middleware on the market, [Charon](https://blog.obol.org/releasing-charon-1-0/?ref=blog.lido.fi). This initiative aims to support scaling and decentralizing Ethereum, ensuring a robust foundation for the network’s growth and stability. Each Obol DV deployed in the vault will contribute to the Collective’s “[1% for Decentralization](https://blog.obol.org/1-percent-for-decentralisation/?ref=blog.lido.fi)” retroactive fund (RAF), which redistributes 1% of staking rewards from DVs to ecosystem projects working to scale and decentralize Ethereum. This creates a positive flywheel effect: as more projects build on DVs, it boosts their adoption, which then unlocks additional funding for further projects. As stakers on Obol DVs contribute to the RAF, they will earn [Obol Contributions](https://blog.obol.org/introducing-obol-contributions-stake-contribute-earn/?ref=blog.lido.fi), which will provide access to future governance and ownership within the Obol Collective. With $1.5B of ETH expected to be staked via validators utilising the Obol Collective’s technology in the near-term, this fund is set to drive innovation and adoption of DVs, creating a sustainable and secure future for Ethereum. ## The SSV Vault Since [ssv.network](http://ssv.network/?ref=blog.lido.fi) launched on mainnet in January this year, the protocol has seen significant success. It currently secures over [1.1M staked ](https://ssv.network/blog/community/ssv-network-secures-1-million-staked-eth-with-dvt/?ref=blog.lido.fi)ETH supported by over 800 operators running nearly [38,000 validators](https://explorer.ssv.network/?ref=blog.lido.fi). Clearly, SSV plays an important role in the overall health of the Ethereum validation ecosystem. ![](https://blog.lido.fi/content/images/2024/08/ssv.png) The SSV Network was developed as an infrastructure layer that allows re/staking applications to seamlessly plug into a globally distributed network of nodes. The goal is to create as many diverse onramps to DVT-powered staking as possible to help decentralize and secure Ethereum’s base layer. To date, 26 grantees have built tooling or staking applications on SSV, with another 46 in progress. With SSV, anyone can easily and permissionlessly distribute a validator across trust-minimized operators around the world, providing additional resilience and peace of mind for solo and professional stakers alike. The launch of Lido’s Simple DVT module marks an opportunity for the ssv.network DAO to give back to the community that has supported the SSV protocol. In tandem with SSV joining the Vault, a Learn campaign will be activated in which participants can gain insight into SSV, Lido, the Simple DVT Module, and the Decentralized Validator Vault while having a chance to share in a pool of rewards. ## Moving Forward The [Decentralized Validator Vault](https://app.mellow.finance/vaults/ethereum-dvsteth?ref=blog.lido.fi), featuring contributions from SSV, Mellow, and Obol, represents a significant step towards enhancing the adoption of Distributed Validators via the Simple DVT Module. By supporting increased stake to operators running DV infrastructure, and through the offer of DVT provider incentives, the Vault aims to bolster the security, resilience, and decentralization of the Lido protocol and Ethereum network. Follow [Lido](http://x.com/lidofinance?ref=blog.lido.fi) on X and join the [Discord](https://discord.com/invite/lido?ref=blog.lido.fi) to stay updated with all new developments in the staking and DVT space. ### Lido Community Staking Testnet: Overview URL: https://blog.lido.fi/community-staking-testnet-overview/ Last updated: 2024-08-02T09:52:22.000Z One month has passed since Lido's [Community Staking Module](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) (CSM) launched its testnet on Holesky. On July 11, [the CSM testnet](https://csm.testnet.fi/?ref=blog.lido.fi) transitioned from the initial Early Adoption phase to a fully permissionless mode, open to everyone. When CSM was first introduced, the following goals were proposed: - Allow for permissionless entry to the Lido on Ethereum Node Operator set and enfranchise solo-staker participation in the protocol; - Increase the total number of independent Ethereum Node Operators. Let's examine how the module was deployed on testnet to create a more practical solution for community stakers and make Ethereum validation participation through CSM more appealing to solo stakers: 1. **Smoothing of both Consensus Layer (CL) and Execution Layer (EL) rewards across the largest Ethereum validator set;** 2. **Competitive bond structure;** 3. **User-friendly experience with low operational gas fees;** 4. **Exclusive use of ETH (stETH) for bonds and rewards;** 5. **Potential for increased rewards per ETH of staked capital compared to vanilla solo staking.** **Note:** The feature implementations on testnet described below represent what certain contributors believe makes sense for building a competitive and robust permissionless staking entry for the Lido on Ethereum protocol. The parameters for mainnet deployment will be finalised after community discussion and DAO voting**.** ### 1\. Smoothing of CL and EL rewards across the largest Ethereum validator set Reward smoothing is implemented by the Staking Router. This process averages the rewards across various modules (CSM, Simple DVT, and the Curated Module), taking into account the number of active validators in each. Cross-module reward smoothing for EL rewards effectively reduces reward variance for Node Operators within CSM. Now, CSM operators with fewer validators receive consistent rewards, irrespective of block proposal frequency, thereby alleviating concerns about low or infrequent earnings. Within CSM, the reward distribution is determined by a Performance Threshold for each claim frame (\~7 days on testnet). The testnet threshold is set at 5%, meaning any operator whose validators with an attestation rate above (network average - 5%) is eligible for reward distribution. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXf6Oj1uOO5gTtbNTqS2Z073hCSjLMJ3dXv7fQJwCGo8Zgb3pvbSAYkQAnSYCA2mGaXcmAkIPagDe_jJBwrviIHvA6PTHQgYQ585t1tO-wGWoeRB55QnRHwAmvyrUfZkonpoJKJ6pgGTCe41Qh661ak6IAY?key=wcHQpKv2Y9DTQ_ftohIIvw) Node operators share the Node Operator rewards equally based on the number of validators whose performance exceeds the threshold. If all validators underperform, the operator will be ineligible for reward distribution in that period; however, their bonds will still generate default stETH staking rewards. This approach provides reasonable performance flexibility, ensuring that Node Operators do not experience reduced rewards due to short-term fluctuations in their validators’ performance. ### 2\. Competitive Bond Structure Running a vanilla validator demands substantial ETH capital (i.e. 32 ETH), often exceeding the financial capacity of many potential operators. To address this barrier, CSM introduces a competitive bond structure utilising a customizable bonding curve mechanism that aggregates bonds across a node operator. On the testnet, as per the configured bond curve, the required bond amount per validator decreases from 2 ETH to 1.5 ETH as the number of validators increases, eventually stabilising at 1.5 ETH. The bond requirement significantly reduces the entry threshold, making it more affordable for a broader range of operators. Additionally, this requirement is notably lower than current alternative solutions: - RocketPool: 8 ETH + extra RPL - Stader: 4 ETH + extra SD - Puffer: 2 ETH + prepayment for Validator Tickets For those eligible for [Early Adoption](https://blog.lido.fi/introducing-early-adoption-for-community-staking-module/), the bond requirement is even lower at 1.5 ETH for their first validator. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXeTTSNzaIo1UzYwkYqSYMZcYPOC_u7GLW_eqr67yTwF2Kt_hVaN_OpaVVKgFP_8p9vgHtDlIK2NzFqpbd9C8JQZNNOuXj_7JtChbmz-PDxUpRlGPQFOP4b1086OpqWbPyk4XLUaB5cKcn8o5n1cK3MNgAeh?key=wcHQpKv2Y9DTQ_ftohIIvw) Unlike some other systems, CSM's bond is based on the Node Operator rather than individual validators. This means that the aggregate total of bonds provided by an operator running multiple validators can cover potential penalties caused by any of its validators. This approach enhances security while maintaining flexibility for operators. ### 3\. User Optimised With Low Operational Gas Fees When using Lido on Ethereum or other existing solutions to run validators, Node Operators must pay gas fees to interact with on-chain smart contracts for operator initialization and validator management. CSM dramatically reduces the cost compared to existing solutions. Node Operators save approximately 64% on gas fees for initialising an operator with a single validator, compared to platforms like Rocket Pool or Stader. Regarding scalability advantage, the gas fee savings become even more pronounced when creating multiple validators. For instance, initialising an operator with five validators in CSM costs about 14% of the gas fees required by RocketPool or Stader for the same operation. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXclKqAJSH6KOQ1Ikf3T5gTUiRG4v6mNy-IhR1BmVBLlg3PLz_aQPqEn47wZS2ORZRzIYVegyGu7UOrUidA8vpQvTGqTSg_zXDqdRgiktlL-yHtw9wSx9OL2WDHuh62gjnpDa3Bad8teawmBH-3lglytWVRm?key=wcHQpKv2Y9DTQ_ftohIIvw) ### 4\. Exclusive Use of ETH (stETH) for Bonds & Rewards Only ETH and its Lido-generated staked ETH are used for bonding and rewards. It eliminates the complexity of involving additional tokens for Node Operators. By avoiding the introduction of new bonded tokens, CSM shields Node Operators from potential price fluctuations of platform-specific tokens. Node Operators have the flexibility to deposit and claim their bond in three forms: ETH, stETH, or wstETH. Within CSM, bonds are converted to stETH, which receives normal Lido staking rewards (the “bond rebase”). In addition, Node Operator rewards are denominated in stETH, which continues to generate further rewards through rebasing. ### 5\. Potential for increased rewards per ETH of staked capital compared to vanilla solo staking Assuming that Lido protocol APR is approximately equal to vanilla validation APR, the per-ETH bond capital efficiency of running validators using CSM may be up to [2.39 times](https://docs.google.com/spreadsheets/d/16%5Fm1GTr-j-RiW2XH%5FaY5gp8wRilxRe-qLT0bCPCg6dI/edit?usp=sharing&ref=blog.lido.fi) higher than that of running vanilla validation. This potential advantage stems from CSM's dual-reward system: - **Bond Rebase**: Node Operators benefit from Lido staking rewards from the stETH bond; - **Node Operator Rewards**: Node Operators receive a share of staking rewards, with a reward rate of 7% on testnet. It's important to emphasise that Node Operators continue to accrue bond rewards (rebase) even if their validators’ performance falls below the predetermined Performance Threshold. While performing below this threshold does result in the forfeiture of Node Operator rewards for a given frame, the bond rebase rewards per validator potentially exceed those obtained through vanilla solo staking. ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXdQ10udrMsCDCJjbAPoDIuRZ8-1sehYdXX24Qb1TLYrJhZ8BMoCmpVzIbBHewu0NYeKzqLLSS9GlmFGCVIQAafyPMaGLQ72xmAjppM2hRk_DsLbdRALQ7tbn0EwENdZ4ryg4IJiXrE6bD0Lvl0jpHUMutzs?key=wcHQpKv2Y9DTQ_ftohIIvw) ![](https://blog.lido.fi/content/images/2024/08/telegram-cloud-photo-size-5-6149948604853369853-x-1.jpg) ## Wrapping Up Based on the implementations outlined, Lido CSM contributors aim to lower the barriers to Ethereum validation participation by providing more consistent and potentially higher rewards, reducing the required capital, and decreasing operational costs. These efforts are designed to onboard an increasing number of independent operators to Ethereum. The CSM testnet is still ongoing, and the higher-performing testnet participants may qualify for the mainnet Early Adoption phase: [csm.testnet.fi/](https://csm.testnet.fi/?ref=blog.lido.fi)**.** ## Resources - [CSM Holesky Testnet](https://csm.testnet.fi/?ref=blog.lido.fi) - [CSM Documentation](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) - [CSM Validator setup guide by Stakesaurus](https://dvt-homestaker.stakesaurus.com/bonded-validators-setup/lido-csm?ref=blog.lido.fi) - [Deployed Contracts on Holesky](https://docs.lido.fi/deployed-contracts/holesky?ref=blog.lido.fi#community-staking-module) ### Deribit Launches Trading in Lido’s stETH URL: https://blog.lido.fi/deribit-launches-trading-in-lidos-steth/ Last updated: 2025-05-28T14:55:12.000Z [Deribit](https://www.deribit.com/?ref=blog.lido.fi), a leading global cryptocurrency exchange, today announces a strategic partnership with [Lido Institutional](https://lido.fi/institutional?ref=blog.lido.fi). The focus of the collaboration will be Deribit enabling the launch of trading in Lido’s stETH on their platform, with the introduction of two new spot pairs: - stETH / ETH - stETH / USDC In addition, Deribit has included stETH in their cross-collateral pool with a 15% haircut. This means that Deribit’s clients have the ability to trade using collateral that generates staking rewards, enhancing flexibility and capital efficiency. ## **Key Highlights** Clients holding stETH will receive staking rewards daily around 12:30 UTC. Rewards are based on users’ minimum stETH amount from 12:00 UTC the previous day to 12:00 UTC the current day. Initially, stETH will be available for Deribit’s direct custody clients and Copper Clearloop. Fireblocks Off Exchange Custody will be enabled thereafter. Trading stETH on Deribit is completely free and more technical information can be found in Deribit’s [Knowledge Base](https://deribit.com/kb/lido-steth?ref=blog.lido.fi). ### **About Deribit** Deribit is a leading cryptocurrency exchange. Founded in 2016, Deribit has quickly become a trusted platform for both institutional and retail traders, offering a secure and highly efficient trading environment. With a focus on innovation and transparency, Deribit provides a wide range of advanced trading tools and deep liquidity, allowing users to hedge, speculate, and manage risk effectively. Headquartered in Panama, Deribit is committed to maintaining the highest standards of compliance and security while continuously enhancing its platform to meet the evolving needs of the global cryptocurrency market. For further information, please visit [www.deribit.com](https://www.deribit.com/?ref=blog.lido.fi). ### **About Lido Institutional** Lido is an open-source, liquid-staking middleware, that provides a way to participate in the blockchain network validation process and get rewards for this activity. With a mission to democratise staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. Users of the middleware can interact with various third-party DeFi applications that have independently integrated and support the liquid staking tokens. For further information, please visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Presenting the Community Staking Module Testnet URL: https://blog.lido.fi/presenting-community-staking-testnet/ Last updated: 2024-07-01T11:57:32.000Z ## TLDR - **CSM testnet is live**: Those eligible for Early Adoption can join CSM now! If not, fret not! CSM will be open to all Node Operators around mid-July. - **Performance matters**: Performing well in the CSM testnet could qualify you for inclusion in the mainnet Early Adoption program. - **Similar to Vanilla (Solo) Staking**: Running CSM validators is similar to running standard validators but requires significantly less ETH. - **Embark on your CSM testnet experience here**: [csm.testnet.fi](http://csm.testnet.fi/?ref=blog.lido.fi) ## What is Community Staking Module (CSM)? [Community Staking Module](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) (CSM) is one of Lido DAO's initiatives to enhance decentralization and democratize access to Ethereum staking. It's designed to allow permissionless entry for any node operator, but especially community stakers, enabling them to use the Lido protocol to run validators. This module aims to significantly expand and diversify Lido's operator set. **Key features of CSM include:** - Permissionless entry; - ETH-based bonding mechanism featuring unique bonding curve design; - Smoothened rewards distribution, including MEV; - User-friendly interface with reduced gas fees for on-chain operations; - Potential for higher rewards compared to solo staking. ## What does CSM mean for Lido? The introduction of CSM represents a significant step towards Lido's mission of making Ethereum staking simple, secure, and decentralized. Through the opening of the protocol to a limitless range of participants, Lido aims to: - Enhance protocol decentralization by incorporating a more diverse set of operators; - Democratize access to staking, allowing individual stakers to participate directly in the Lido ecosystem as node operators; - Improve the protocol's resilience and security through a larger, more distributed validator set; - Further support Ethereum's ethos of decentralization and community participation. ## How do I join the CSM testnet? The CSM testnet is divided into two phases: the Early Adoption period and the permissionless period. At launch, the testnet is only available to Node Operators included in the Early Adoption list. Read more about [Early Adoption](https://blog.lido.fi/introducing-early-adoption-for-community-staking-module/) and [check your testnet eligibility](https://lidofinance.github.io/csm-ea-checker/?ref=blog.lido.fi). Once the Early Adoption period ends, the testnet will be accessible to everyone. The end of the Early Adoption period on testnet is expected around mid-July 2024\. All operators are encouraged to participate and help Lido to build a strong permissionless module for the Ethereum community. [![](https://blog.lido.fi/content/images/2024/07/Screenshot-2024-07-01-at-13.56.41.png)](https://csm.testnet.fi/?ref=blog.lido.fi) Running validators as a CSM Node Operator is similar to running vanilla validators, except that validators are registered in CSM which then registers them with the Beacon Chain Deposits contract once enough ETH has been gathered. Check out [the documentation](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) for an overview of how CSM works. **Start your CSM testnet journey:** [**csm.testnet.fi**](http://csm.testnet.fi/?ref=blog.lido.fi). ## Why join the CSM testnet? CSM will also have an Early Adoption mechanism on mainnet, allowing early participants to benefit from a reduced bond requirement for their first registered validator. Performing well in the CSM testnet could contribute to inclusion in the mainnet Early Adoption list. Experience how easy it is to use CSM with a much lower bond compared to normal solo staking (e.g., no more than 2 ETH on the testnet) and brilliant UX, contribute to the staking community, and provide input on future improvements. Show your engagement and help Lido contributors build a great permissionless module for Ethereum. ## What's Next for CSM? If you are eligible for Early Adoption on testnet, we encourage you to experience running a validator with a small amount of Holesky ETH using CSM now. If not, get your clients set up and stay tuned for the module’s opening to all. Attending EthCC in Brussels? Register for [the exclusive Stakers Guild event](https://lu.ma/w5iji1sl?ref=blog.lido.fi) using code "CSM\_testnet" to connect with fellow community stakers and engage directly with our contributors about CSM. Limited tickets available on a first-come, first-served basis. Last but not least, to stay informed about the latest updates and developments regarding Lido's CSM, claim the 'CSM Operator' role in [the cs-get-roles channel](https://discord.com/channels/761182643269795850/1255114639168245790?ref=blog.lido.fi) and follow [the csm-testnet channel](https://discord.com/channels/761182643269795850/1255114351120089148?ref=blog.lido.fi). ## Additional Resources - [CSM Documentation](https://operatorportal.lido.fi/modules/community-staking-module?ref=blog.lido.fi) - [Community Staking Module Proposal](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi) - [CSM Early Adoption Mechanism](https://blog.lido.fi/introducing-early-adoption-for-community-staking-module/) - [CSM Validator setup guide by Stakesaurus](https://dvt-homestaker.stakesaurus.com/bonded-validators-setup/lido-csm?ref=blog.lido.fi) ### Early Adoption for Lido Community Staking Module URL: https://blog.lido.fi/introducing-early-adoption-for-community-staking-module/ Last updated: 2024-06-19T11:39:17.000Z ## Overview - The CSM mainnet will initially operate in an Early Adoption mode, allowing identified likely community stakers to participate in the module before it’s accessible to all. - Early adopters benefit from a special bond curve that further reduces the bond requirement for their first registered validator. - Verify your Early Adoption eligibility for the Holesky testnet [here](https://lidofinance.github.io/csm-ea-checker/?ref=blog.lido.fi), and stay tuned for comprehensive information about the mainnet, which will be released shortly before its launch. - You can still qualify as an early mainnet participant by engaging in upcoming activities, such as the testnet. ## What is CSM Early Adoption? [Community Staking Module](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi) (CSM) Early Adoption (EA) is an initiative to onboard a sub-set of identified likely solo stakers to CSM on mainnet prior to the module opening up to everyone. This mechanism safeguards against the potential crowding out of CSM’s capacity by large operators during the initial phase. In addition to the ability to spin up validators using the CSM from the get-go, eligible operators also benefit from a reduced amount of collateral for their first registered validator. While the CSM is in the EA period, the number of validators each operator is permitted to register is capped. ## Who is eligible? The list of addresses eligible for the Early Adoption phase will be curated from multiple sources: - [**Solo-stakers list curated by Rated**](https://github.com/rated-network/solo-stakers?ref=blog.lido.fi): A list of solo-stakers for the Ethereum Beacon Chain curated by Rated with the methodology described in the [blog post](https://blog.rated.network/blog/solo-stakers?ref=blog.lido.fi). - [**Solo-stakers list curated by StakeCat**](https://github.com/Stake-Cat/Solo-Stakers?ref=blog.lido.fi): A list of solo-stakers for the Ethereum Beacon Chain curated by StakeCat. - [**Obol Techne credential holders**](https://research.lido.fi/t/community-staking-module/5917/46?ref=blog.lido.fi): The Obol Techne Credential Program is an initiative aimed at identifying individuals who have demonstrated proficiency in operating distributed validators. Holders of this credential are recognized as potential candidates to become CSM Node Operators. - **Simple-DVT testnet community staker participants**: Simple DVT Module represents the inaugural Lido staking module that empowers community stakers to participate in the Lido protocol by operating validators, leveraging DVT provided by Obol and SSV network. - **Performant CSM testnet participants**: CSM testnet Node Operators with good performance will be taken into account. - [**CSM-related Galxe OATs holders with 5+ points**](https://app.galxe.com/quest/lido/GCPoDUBedQ?ref=blog.lido.fi): Community members who have consistently engaged in both online and offline activities, and have collected relevant digital badges as proof of participation, will be taken into consideration. *The mechanics will undergo testing on the Holesky testnet, where an EA list for the testnet environment will be utilized. Please note that the final list for mainnet won’t be equivalent to the testnet one. It will be updated to include eligible CSM testnet participants and the most recent data from other sources. Once CSM mainnet goes live, the list won’t be changed anymore.* ## What are the benefits of Early Adoption? ### 1\. Early Access Node Operators included in the Early Adoption list will gain exclusive access to the CSM mainnet before it becomes available to all. ### 2\. EA Bond Curve [One of CSM’s unique features](https://hackmd.io/gGRgZ0yeTnm-9SSFuHrXwg?view&ref=blog.lido.fi#Bond) is the ability to set bond curves on a per-operator basis, such as non-linear bonding, which allows Node Operators to run multiple validators with bond requirements that decrease based on the number of validators registered under a single address. EA bond curve is a special curve that further lowers the entry barrier for the early participants in terms of bond required for the first validator per Node Operator. The reminder of the curve is identical to the default one. ![](https://lh7-us.googleusercontent.com/docsz/AD_4nXczGJwcLa8a2VTkJ3XLhiLZLIQ8jDOXgoaEGbEHudfkjkwVh_Sny9oivrOc28qmcKhrHMZO1dzd7HvgoJElMTfJdtOOnD4wHvFGasBU6ez4eeChQNsBMte0d8IPP33A6lgG2KwS659jMlXQ2efh0HczqIE8?key=iXJslToSdWZqhmwver0M0w) ## How do I check if I’m eligible? To check your Early Adoption eligibility for Holesky testnet, please visit the dedicated [checker page](https://lidofinance.github.io/csm-ea-checker/?ref=blog.lido.fi) or manually review the address collection in the [.json](https://github.com/lidofinance/community-staking-module/blob/main/artifacts/holesky/early-adoption/addresses.json?ref=blog.lido.fi) file. ## What if I'm not eligible yet? Operators who are not currently included in the Early Adoption list still have opportunities to potentially qualify for future inclusion, such as through the following avenues: - Joining the upcoming community staking online/offline events (e.g. EthCC [Stakers guild](https://lu.ma/w5iji1sl?ref=blog.lido.fi)) and gathering Galxe OATs. If you join, don’t forget to ask and claim. - Participating in CSM public testnet with good performance. ### Advanced DeFi Strategies for stETH with Mellow Finance URL: https://blog.lido.fi/advanced-defi-strategies-for-steth-with-mellow/ Last updated: 2024-06-11T14:08:30.000Z - Lido is partnering with [Mellow Finance](https://mellow.finance/?ref=blog.lido.fi) \- one of two inaugural Lido Alliance members alongside Drop - to provide stETH holders with access to a number of advanced DeFi vaults - including restaking - in collaboration with [Symbiotic](https://www.coindesk.com/tech/2024/05/14/lido-co-founders-paradigm-secretly-back-eigenlayer-competitor-as-defi-battle-lines-form/?ref=blog.lido.fi). - The vaults are part of Lido's vision to enter the Ethereum restaking space and to provide Ethereum stakers with access to restaking opportunities. - The DeFi strategies are launched in collaboration with [Mellow Finance](https://mellow.finance/?ref=blog.lido.fi), a novel restaking primitive enabling permissionless Liquid Restaking Token (LRT) creation based on individual risk profiles and curation models. - This form of integration boosts the utility and liquidity of staked ETH. Additionally, Ethereum stakers benefit from Lido Alliance requirements including a strong security framework, including thorough testing, comprehensive audits, and continuous monitoring. ## Presenting: Advanced DeFi strategies for stakers Lido contributors are pleased to present a new initiative to provide stETH holders with access to enhanced DeFi strategies. These DeFi strategies are part of Lido's ongoing commitment to supporting Ethereum and LST-aligned projects, bringing more value and possibilities to the staking community together with Mellow Finance. Explore the new DeFi strategies here: [Lido DeFi Strategies](https://lido.fi/?ref=blog.lido.fi#defi-strategies). This development is the first stage of [Lido Alliance](https://research.lido.fi/t/lido-alliance-an-ethereum-aligned-ecosystem/7475?ref=blog.lido.fi) \- a collaborative effort to grow the Ethereum staking ecosystem through partnerships with aligned projects. Lido Alliance aims to bring value to stETH holders through strategic partnerships and by fostering these collaborations, reinforcing the position of stETH as the premier collateral in the market, especially for restaking. ## Unlocking New Potential for stETH In collaboration with [Mellow Finance](https://mellow.finance/?ref=blog.lido.fi), [Symbiotic](https://www.coindesk.com/tech/2024/05/14/lido-co-founders-paradigm-secretly-back-eigenlayer-competitor-as-defi-battle-lines-form/?ref=blog.lido.fi) and a number of strategy curators including [Steakhouse](https://www.steakhouse.financial/?ref=blog.lido.fi), [P2P](https://p2p.org/?ref=blog.lido.fi), [Re7 Labs](https://www.re7.capital/?ref=blog.lido.fi), and [MEV Capital](https://mevcapital.com/?ref=blog.lido.fi), these vaults are designed to allow stETH holders to participate in decentralised restaking, offering a unique opportunity to explore more paths in the DeFi and Ethereum restaking ecosystem. With this launch, stETH holders can: - **Restake stETH**: Maximise the utility of your stETH by leveraging it for additional DeFi opportunities. - **Receive Mellow Vault LRTs**: Receive LRT rewards from the Mellow vault. - **Receive Staking Rewards**: Continue to receive stETH staking rewards. - **Receive Additional Staking Rewards Based on Vault’s Curator Strategy**: Benefit from curated strategies that could increase your rewards (coming later). - **Receive Mellow and Symbiotic Points**: Accumulate points from Mellow Finance and Symbiotic. ![](https://blog.lido.fi/content/images/2024/06/unnamed-modified.png) At launch, four vaults will be live for stETH holders to experiment with various DeFi restaking strategies. 1. ****Reste**aking Vault - Steakhouse Financial:** stETH APR + Symbiotic Points + Mellow Points + Restaking APR 2. ****Restaking Vault - P2P Validator:** stETH APR + Symbiotic Points + Mellow Points + Restaking APR 3. ****Restaking Vault - MEV Capital:** stETH APR + Symbiotic Points + Mellow Points + Restaking APR 4. ****Restaking Vault - Re7 Labs:** stETH APR + Symbiotic Points + Mellow Points + Restaking APR ![](https://blog.lido.fi/content/images/2024/06/3--3--modified.png) ## Restaking with Mellow Finance The DeFi strategies are launched in collaboration with [Mellow Finance](https://mellow.finance/?ref=blog.lido.fi), a novel restaking primitive enabling permissionless Liquid Restaking Token (LRT) creation based on individual risk profiles and curation models. As permissionless LRT middleware, Mellow facilitates the launch of custom LRTs backed by stETH, with Lido integrating descriptions and links to Mellow deposits on its landing page. To ensure sustained liquidity, Mellow will introduce a loyalty program for new stETH LRTs. [![](https://blog.lido.fi/content/images/2024/06/Screenshot-2024-06-11-at-13.51.20-modified.png)](https://app.mellow.finance/restake?ref=blog.lido.fi) Traditional LRT’s often limit users to a single approach, which may not suit everyone’s needs. Protocols like Mellow change this by allowing the creation of customizable LRTs, enabling curators to design strategies that best fit various preferences and goals. This adaptability ensures that users can choose approaches that best meet their individual needs and expectations. Mellow Finance is one of the inaugural Lido Alliance members. Their initial proposal underwent review by the interim Lido Alliance Workgroup, and was subsequently approved by [Lido DAO Snapshot vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x9cf59093a927afe5ebd860a46aaeb92e67ff980168d95dce4c0fe2d5d46d2e68). ## More Paths, Higher Rewards Access to advanced DeFi strategies empowers stETH holders to take advantage of additional rewards from DeFi opportunities, particularly through restaking. This integration boosts the utility and liquidity of stETH, whilst offering a user-friendly and battle-tested experience. Additionally, vaults benefit from a strong security framework, including thorough testing, comprehensive audits, and continuous monitoring. Join in this exciting new chapter and make the most of your stETH with Vaults. Visit the refreshed [Lido site](http://www.lido.fi/?ref=blog.lido.fi) to explore the new [DeFi Strategies](https://lido.fi/?ref=blog.lido.fi#defi-strategies) section and the various possibilities in this new landscape. ### Lido Validator & Node Operator Metrics: Q1 2024 URL: https://blog.lido.fi/vanom-update-q1-2024/ Last updated: 2024-05-22T16:03:22.000Z The latest VaNOM (Validator & Node Operator Metrics) report for Lido for Q1 2024 is now available. Access the full report with comprehensive data [here](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi), or read on for a breakdown of some of the key metrics. ## TLDR: In the latest Q1/2024 VaNOM update, several key trends have been observed: - There has been an increase in client diversity, especially on the Execution Layer. Notably, use of the supermajority client (Geth) has fallen to 46% (from 96% in 2022 and 67% in Q4/2023), marking this the first time that node operators using the Lido protocol are running validators where no CL or EL client has > 50% share. - Public cloud usage across validators has also decreased, from 46% to 40%, which is a historic low for operators using the protocol. - As new entrants join, stake distribution statistics continue to show improvement, indicating more dispersed stake as these new onboardees increase their key counts. - All curated NOs are currently below the 1% soft cap for the first time since the soft cap was [initially proposed](https://research.lido.fi/t/lido-operator-set-strategy/2139?ref=blog.lido.fi). - All 11 Polygon validators are using Fastlane, and on the infra front Stakin and Girnaar Nodes have moved their nodes away from public cloudloud and on to bare metal servers. Note that while Simple DVT went [live in Q1/2024](https://blog.lido.fi/simpledvt-new-phase-for-lido-on-ethereum/), Simple DVT clusters did not receive deposits for validators until Q2, so Simple DVT will only be reflected in VaNOM as of Q2. ## Lido on Ethereum ### Curated Node Operators Soft Cap The node operator Soft Cap, as outlined in the Lido on Ethereum Node Operator Set Strategy, is in place to ensure adequate stake distribution and that no single node operator should operate more than 1% of the total ETH staked through the Lido protocol. ![](https://lh7-us.googleusercontent.com/wMYcm2imdYpewWTwh9cO7ZZFukkb20L8t4ubT2EuhHmJtsZzRqvDS7msJYl3Q9SljT6ifmyT1H1k7-fUdN5bycEnwLHKDvIzyuAidR95awa5-3GVjopIKCosdsI0StjuShWPu7jiyHKCnNo-WTiNmEc) As shown by the orange line above, all curated node operators are currently below this 1% soft cap. ### Client Diversity Client diversity within the Lido validator set is the healthiest it has ever been, showcased through a balanced distribution amongst validator clients. With no client exceeding 50%, node operators using the Lido protocol are leading the way in terms of client and infra diversification at scale. ![](https://lh7-us.googleusercontent.com/deiZnyf07nbN4CRTUkfgZN-8eNpEFAjdzQwXI2lSORbKJUGIhRBG8Xxrxo3tPYxOwx6ruMZmqjjkOy4uaNIY75SRwOEQtvCB2IaGOAlE44Vj3gGda_EOcfNKTrE0TjY0Cb2hSY6GEpRtXK--eNdRHLs) In the broader Ethereum landscape: - Lighthouse has reclaimed a dominant position in the first quarter of 2024, with its utilisation rising to 42% from 36% at the end of 2023. - Prysm has seen a decline in use, dropping to 30% from 36%. - Teku has maintained a steady utilisation rate of 14.9%. - Nimbus has experienced a slight decline in usage, decreasing from 9.4% to 8.5%. - Both Lodestar and Grandine have seen marginal reductions in use, with Lodestar falling to 2.64% from 2.94%, and Grandine to 0.9% from 1.1%. Among node operators using the Lido protocol, Lighthouse continues to be the most popular validator client, registering a slight increase from 27% to 28% this quarter, reversing the trend of gradual decreases seen in previous quarters. Additionally, Prysm’s utilisation has decreased from 24% to 19%. Vouch, a specialised validator client designed to be beacon node agnostic and capable of working with multiple beacon nodes simultaneously, has seen increased usage from 24% to 25%. Lastly, Teku’s utilisation has stabilised at 17%, maintaining the progress made in the previous quarter. ### Infrastructure & Validator Hosting Public cloud usage among validators has seen a noticeable decline, from 46% to 40%, over the last quarter. This trend may reflect a shift in the preferences of validators, opting for better performance/price on bare-metal (whether co-located or on-premise). ![](https://lh7-us.googleusercontent.com/06aF5NziQXs5PDXLfJ7fF809TcyG2Vg2z3i6w90uIVm-fwhGnh3IcDMp448TRDAunOPYdWvxaIxjX9OACcWkwTj71-_kWBrvK8omZZxCJ98DPgHauNpDERn7J5an_OI8wexDfFaDlbccEjGGa466OPU) The goal, as outlined in the Operator Set Strategy, is to meaningfully improve the usage of on-premises (or at least bare-metal) infrastructure, as well support NO coordination in usage of a multitude of cloud providers if cloud is preferred. ![](https://lh7-us.googleusercontent.com/aAB7Z9C3gkG7u28wKBiCqPDIZR7TawPddWOsuSdRFGID3_WcyE6AxJ3IMcBGTXCx-tMAZrNtPGeSwXMtBgjUUi3n-HV_QdpKNJ6Hyj4K9CuAXnWFX8JjIfhbJPndHHmLGnjYt7UahS3MH7OBkH9PDQc) In Q1 2024, both GCP and AWS increased their share of the public cloud servers despite the overall share of cloud server hosting decreasing with dedicated servers growing by nearly 9% when calculated by node operator. ### Stake Distribution The stake distribution indices have shown a decrease (improvement) as the number of new participants in the network increases, bringing with them a higher count of keys. This trend indicates a broadening of the validator base, as more users join the network with substantial stakes. While this expansion is positive for network diversity and security, it also leads to a more dispersed distribution of stakes among an increasing number of validators, affecting the overall stake concentration metrics. ![](https://lh7-us.googleusercontent.com/kJ8_GhPmBI4cyBJQbojtAQD43J1uRqWRZHNi2POphrt9GxKI4WL9fsFs0sLy78ztdkrw3Akqkeje-9AzuT3MQIIiMO1iFvStJYdDwWFA5BCzNBK1No0s6KyJhO5p3IWOe5eczTjl6qKvkhF9wwhGYH8) Stake distribution across the protocol has become more uniform over its lifetime. The rises in the Gini ratio during the first and third quarters of 2022 are largely due to the introduction of new node operators. As these operators enter, there's a natural delay before those with fewer keys can accumulate a comparable number of keys to those held by more established operators, especially as new stakes come in. This trend was also noticeable from Q3 of 2023 to this quarter, following the allocation of stakes to the nine new operators from Wave 5, which gradually increased. Moreover, the protocol's method of prioritising exit requests from node operators with higher numbers of active keys further aids in gradually balancing the stake distribution more evenly. ## Lido on Polygon New stats including validator effectiveness data, sourced from [rated.network](https://www.rated.network/?ref=blog.lido.fi), have been added to the Polygon report. ![](https://lh7-us.googleusercontent.com/hNSDgALBexEt7X4vZ9Sl7QCjiO_JX7L953p2_7HmEGJ-NbbwgxK1VOAb0FeOncQCWlzwvuFCXO-YNd2y_kXdQE4HtaSGG7s6mW0eHC0P_oxRdmu-2C8UAm1LIIbDEdhIG9nPjQYYjh5Tf8tasURL4NU) ## What’s Next? The next VaNOM report is scheduled for release in the second quarter. In the meantime, to stay updated on all the latest developments with Lido Node Operators, explore the [Node Operator Portal](https://operatorportal.lido.fi/?ref=blog.lido.fi) and join the Node Operator Community Calls [here](https://youtube.com/live/OvfTwdmtm3Q?feature=share&ref=blog.lido.fi). ### reGOOSE: An Update to Lido DAO GOOSE Goals URL: https://blog.lido.fi/regoose-an-update-to-goose/ Last updated: 2024-05-15T11:01:49.000Z # **TLDR: reGOOSE & Lido Alliance** Last week, Hasu published [reGOOSE: Updated goals for Lido in the light of MVI and restaking](https://research.lido.fi/t/regoose-updated-goals-for-lido-in-the-light-of-mvi-and-restaking/7462?ref=blog.lido.fi). Hasu’s [proposal](https://research.lido.fi/t/regoose-updated-goals-for-lido-in-the-light-of-mvi-and-restaking/7462?ref=blog.lido.fi#h-4-lido-and-restaking-7) to update the GOOSE goals to accommodate new developments in the market feature a few key principles: - Stay focused on security and decentralization - Participate in Ethereum staking roadmap research - Reaffirm that stETH should remain a foundational tool and an LST, rather than step into the high-risk, money-manager-like LRT market - Support Ethereum-aligned validator services, starting with preconfirmations without exposing users to additional risk - Make stETH the #1 collateral in the restaking market Furthermore, Steakhouse have proposed the adoption of the [Lido Alliance](https://research.lido.fi/t/lido-alliance-an-ethereum-aligned-ecosystem/7475?ref=blog.lido.fi), a framework for growing an Ethereum-aligned ecosystem around stETH, with a shared mission of decentralizing Ethereum validation. # **What has happened since the first GOOSE?** hasu’s [recent proposal](https://research.lido.fi/t/regoose-updated-goals-for-lido-in-the-light-of-mvi-and-restaking/7462?ref=blog.lido.fi) looks at the state of the current GOOSE goals and evaluates whether the market has changed enough to warrant modifying them. The GOOSE process is a way for the DAO to signal the ‘**Why**’ and the ‘**What**’ of strategic direction. The community and contributors are then invited to reply with proposals for ‘**How**’. This article wanted to take the opportunity to go deeper into some of hasu’s ‘What’ points and share some early perspectives on ways that the ‘How’ could be achieved. ![](https://blog.lido.fi/content/images/2024/05/image.png) The biggest headline feature is ultimately that the mission remains the same. Users value Lido stETH for being robust, minimal middleware for staking, and that is what it is likely to remain. # **What changes is the market facing now?** The staking market has since changed in two fundamental ways 1. **MVI** 2. **Restaking** The issuance debate is focused on whether Ethereum should limit the growth of the validator set and limit the % of ETH staked explicitly. The clearest point is that much more research is needed as the debate is far more nuanced than simplistic representations of each position on crypto twitter. Reductions to Ethereum’s security budget would likely have severe consequences on the decentralization of the network, in particular affecting solo-stakers and supplier technology such as DVT. The rapid emergence of restaking is another market change, and one that few people expected to be so quick. Or, to be specific, few expected restaking protocols to be able to reallocate enormous amounts of capital on the basis of points farming, before the launch of any real, organic restaking yield. Restaking is a promising new technology that is still in the process of maturation. Through the introduction of new slashing conditions, stakers are exposed to a new universe of rewards and opportunities, as well as its commensurate risks. The best way to secure the foundational layer of restaking and prepare it for this universe of new applications is to use stETH as a secure base asset. # **How are the GOOSE goals changing?** ![](https://blog.lido.fi/content/images/2024/05/Regoosing_steth--1-.png) ## **1\. Stay focused on security and decentralization** Maximizing the strengths of the validator set and minimizing the risks from LSTs on long-tail security are both important goals. stETH meaningfully contributes to Ethereum decentralization and the DAO should want to continue improving the stETH validator set and decreasing smart contract and governance risks, regardless of the outcome of the issuance curve debate. ## **2\. Participate in Ethereum staking roadmap research** Education was an important goal in the first iteration of the GOOSE goals, but vaguely defined. This goal is much more specific in asking for a Lido DAO funded Research arm that can help provide insight into crucial issues such as the issuance debate. This initiative should engage in research, suggest specific proposals, and contribute to an endgame vision for ethereum staking that can protect against both centralization of the validator set and long-tail risks. Cyber.fund has [already begun](https://cyber.fund/content/mvi-grants?ref=blog.lido.fi) an independent research grant program. hasu has asked Lido DAO to answer the call and provide its own framework for developing and funding research grants. Lido Research is an attempt to answer that call. ## **3\. Reaffirm that stETH should stay an LST, not become an LRT** In spite of the current popularity of restaking/LRTs, it would likely be a mistake for Lido DAO to jump on the LRT bandwagon. More institutional than retail capital is expected to join Ethereum over the next three years (and it would be very surprising if a significant portion of it were used in restaking). To ensure the staking layer of Ethereum remains decentralized, Lido or another decentralized staking pool needs to win the institutional opportunity. Secondly, while LRTs may offer higher rewards than staking, their nature is closer to an ETH-denominated credit or mutual fund. Liquid staking, on the other hand, is a commoditized software offering. The DAO should stay open to launching additional products on top of stETH, incl. an LRT, when there is sustained market demand and alignment with the Lido mission. However, stETH should always stay the DAO’s priority, and it should always stay an LST. ![](https://blog.lido.fi/content/images/2024/05/Regoosing_steth-1.png) ## **4\. Internalize validator services that align with Ethereum’s roadmap, starting with preconfirmations, without exposing stakers to additional risk** In collaboration with Lido Research, the Ethereum Foundation and the rest of the Ethereum community, Lido should stay at the forefront of what “staking” means. This includes actively exploring a new service when there is strong indication that all validators will adopt it. The obvious first-step here is support for preconfirmations, which allow validators to commit to include a transaction outside of the regular auction cadence. Supporting Ethereum-aligned sidecars, such as preconfirmations, has the potential to help grow the Ethereum ecosystem without increasing risk to stETH users. ## **5\. Make stETH the #1 collateral in the restaking market, allowing stakers to opt into additional points on the risk and reward spectrum** The big opportunity in restaking, in our view, lies at the intersection of LRTs / restaking platforms and modularity. ![](https://blog.lido.fi/content/images/2024/05/steth-as-a-collateral.png) For stETH, the opportunity is to remain the top collateral used in the construction of restaking protocols, and to give stETH holders the ability to opt into additional points on the risk/reward spectrum. For LRTs, it is to delegate the staking layer to stETH and take control of LRT unit economics to deliver the risk-adjusted restaking rewards that LRT holders expect. ## **Proposing: Lido Alliance** Finally, since DAOs are chronically bad at negotiating strategic partnerships, hasu suggests the creation of a new ecosystem-building team or initiative for that purpose inside Lido DAO. Lido is a unique software protocol that uses market forces to create incentives for decentralizing Ethereum. Market incentives can be one of the strongest forces for good in the world, and cryptoeconomic mechanisms are one of the strongest possible ways of enforcing their outcomes. As neutral software, Lido stETH balances interests between node operators and stETH users. Another [proposal](https://research.lido.fi/t/lido-alliance-an-ethereum-aligned-ecosystem/7475?ref=blog.lido.fi) for a Lido Alliance is intended to create a social contract for protocols that share Lido’s mission of “keeping Ethereum decentralized, accessible to all, and resistant to censorship”. Growing the stETH ecosystem has proven to be a powerful way of accelerating Ethereum decentralization and accessibility. Lido Alliance is a governance framework for allowing the DAO to ‘onboard’, or ‘endorse’ projects on the basis of their adherence to Lido’s mission, their security culture, and to what extent they expand the stETH ecosystem. Hopefully the rigor of Lido DAO’s security expectations as part of the Alliance onboarding process will prove to be an effective way of exporting Lido DAO’s security culture to the rest of Ethereum. ![](https://lh7-eu.googleusercontent.com/ZWTS_G54Ftb3j-Jl1J-d636TMIHGlza9mZAzUUTem_fmgxJEN8bGmwD_MHWdAmJ0lHE6pQsHwrjq1AkGK27Rc1uEMhTnfjF_Tk7irY2OjqhlzYBLAQ4kPPmYw8hSYdNybOiYSVQgnlz6X4k00HMpRG8) While the Alliance framework proposal is theoretically open to any new protocol, Steakhouse wrote it with restaking in mind, and have three points to their ‘wishlist’, as an open call to the community: 1. New staking and restaking protocols that aim to create permissionless restaking architecture and facilitate open markets 2. Permissionless LRTs, i.e. services that curate AVS’ but allow users to delegate ETH in a trustless and multisig-less way (similar to yearn strategies or MetaMorpho vaults) 3. Pre-confirmation services and other AVS protocols that are Ethereum-aligned and can help make the network stronger. Any of the above are invited to contact the Alliance Workgroup (details to come, should the proposal pass) to explore the Alliance and begin the governance process for endorsement. The framework is generalist and other protocols that share the same aim are equally invited to participate. This is one of many ways to participate and partner with Lido DAO, and hopefully it will lay the foundation for projects to get more deeply involved with the ecosystem. ## **What's Next?** In the coming days, both reGOOSE and Lido Alliance will be discussed across the Lido DAO forum. Following discussion, both initiatives will put up for a Snapshot vote for Lido DAO members to vote on the enactment of both. This post will be updated to include information on these votes, in addition to voting information being shared across [Lido Twitter](https://twitter.com/LidoFinance?ref=blog.lido.fi) and other community channels. In addition to this, a community call will be hosted this Thursday to discuss both initiatives in more detail, providing DAO members with a chance to ask questions and provide feedback in real-time. Finally, it goes without saying, but the success of Lido in securing Ethereum validation would not have been possible without the support and passion of a dedicated community, or the commitment and mission-driven focus of ecosystem participants. ### Simple DVT: SSV Testnet #3 Results URL: https://blog.lido.fi/simpledvt-ssv-testnet-results/ Last updated: 2026-05-11T15:39:52.000Z Last week, the Lido x SSV Simple DVT testnet officially ended, with the aggregate validator set surpassing all of the minimum requirements to move forward to mainnet! This was the 3rd Lido x SSV trial allowing Node Operators to use the Lido Node Operator registry with SSV-based DVT on testnet. In the coming weeks, a proposal to the DAO is expected with the suggested list of participants to move forward to the mainnet Lido Simple DVT Module using SSV’s technology. Read on to learn more about the testnet, the strong performance of SSV based validators, and the process regarding how to become a Node Operator on mainnet using the Lido Simple DVT Module! ## What is Simple DVT? The Simple DVT Module (SDVTM) is the second mainnet Lido protocol module, added following an [on-chain Aragon vote in February 2024](https://vote.lido.fi/vote/172?ref=blog.lido.fi). The module provides the first opportunity for solo and community stakers to participate in running validators using the Lido protocol by leveraging the established design of the Curated Operator Module and DVT solutions provided by [Obol ](https://obol.tech/?ref=blog.lido.fi)and [SSV Network](https://ssv.network/?ref=blog.lido.fi). According to [the proposal](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/16?u=kimonsh&ref=blog.lido.fi), the module would be initially capped at 0.5% of total Lido stake (with the option to be increased via DAO vote) and is expected to allow for the addition of over 250 net-new Node Operators to the protocol in the first six months post-launch. The SDVTM is intended to be wound down within 3 years, during which time more scalable DVT modules with permissionless elements are expected to have been added to the protocol. To learn more about the SDVTM, read the [recent blog post here](https://blog.lido.fi/simpledvt-new-phase-for-lido-on-ethereum/). ## Lido & SSV Testnet: Overview ### Participant Distribution The 3rd Lido x SSV Testnet started in late November 2023 on the Holesky testnet, with 163 total participants including over 60 solo stakers & community stakers, as well as 90+ and professional node operators. Participants were split into 32 clusters of 7, with an effort to minimize geographic related latency and achieve a diversity of infrastructure types (e.g. bare metal servers, home machines, and public cloud). Each cluster included a member of the Lido Curated Operator Set (many of which had participated in prior Lido x SSV testnets) to ensure an experienced participant in each cluster. In addition, an effort was made to include participants that had indicated significant experience with SSV based DVT during their applications. At the aggregate level, participants ran nodes from 32 countries across North & South America, Europe, Asia, and Australia. ![](https://lh7-us.googleusercontent.com/bkJBfnqpNtzrT7RaDNheOC_ZqUo8nf_JYquMYKeL3q9BWwO8Zgo4skh38hHEBy0uBcVUhK3nxMyoOQ81M0ZnKOrYkkJ7B-wHhshlWAOiuJONLQriZVe3i4JCJXXU6MKKc12Rq83nQ9tB68pKKxMx7YA) ### The Process Participating clusters started the process by submitting a verified “Individual Manager Address'', used for signing messages in the Protofire Safe and SSV webapp, and an optional “Individual Reward Address'' that participants could choose to receive validator rewards in lieu of their Individual Manager Address. Next, clusters proceeded with choosing a “Cluster Coordinator”, a participant that would be responsible for creating their Safe multi-sig and initializing the Distributed Key Generation (DKG) ceremony for each cluster. Each cluster’s SAFE consisted of a 5/7 threshold, and represented their cluster in the Lido Node Operator registry on Holesky. Once completed, Cluster Coordinators created their respective cluster Safes and their Node Operator entries were created. Thus began the node setup process. In SSV, each participant is responsible for running an SSV Operator (which also acts as their validator client) as well as a DKG Node. Due to the early-stage nature of the Holesky testnet, MEV-Boost was not initially supported, requiring participants to directly connect to the [Titan](https://docs.titanrelay.xyz/?ref=blog.lido.fi) relay via their CL client. Importantly, this testnet was the first where SSV’s DKG tool was tested at scale, with Lido as the first staking protocol to coordinate SSV DKGs with over one-hundred sixty participants, and presented the first opportunity for many participants to utilize DKG via SSV. One of the benefits of SSV’s DKG format is the ability to generate keys via DKG as needed. Cluster Coordinators were responsible for initializing the DKG to their cluster participants. As long as each member of the cluster had their DKG node running, the coordinator was able to run the DKG command to generate the first 5 keys. Once done, the Cluster Coordinator then started the process to register the validators to the SSV smart contracts for their cluster participants to sign in the Safe, which also included setting a spend approval for SSV tokens and updating of the cluster Fee Recipient to the Lido Execution Layer Rewards Vault on Holesky. When the clusters completed the signing process and verified the correct validators were registered to their respective clusters, they proceeded with starting the process of submitting their validator keys to the Lido Node Operator registry, which then also required verification from the cluster participants. Soon after, the Lido Simple DVT Module Committee on Holesky raised the key limits for the clusters, and their validators were activated. During the following weeks, performance metrics across Uptime and Attestation Effectiveness showed generally promising results, and clusters proceeded with DKGs and registration for 50 total validators. During this time, it was noted that Block Proposal Success Rate for certain clusters was performing below average. The issue was traced to two factors: 1\. The early adoption of Holesky by builders and 2\. Geographic latency issues for clusters with infrastructure located far away from the relay locations. As the Holesky testnet matured, Flashbot’s provided MEV-Boost support and participants were asked to enable MEV-Boost with the [Flashbots](https://www.flashbots.net/?ref=blog.lido.fi), Eden, and [Titan ](https://docs.titanrelay.xyz/?ref=blog.lido.fi)relays. A notable improvement in Block Proposal Success Rate was observed, and cluster key limits were raised to 100 total validators. In late February, clusters were asked to upgrade their nodes for the Deneb hardfork on Holesky. Following the fork, a deterioration in overall Holesky validator performance was observed, as can be seen in the screenshot below. Following the fork, minor issues were identified with Nimbus, Teku, and Prysm, and along with an improvement to the SSV client in v1.3.2 update, performance was restored and network-wide trends saw gradual improvement. ![](https://blog.lido.fi/content/images/2024/04/pasted-image-0-modified.png) ![](https://blog.lido.fi/content/images/2024/04/pasted-image-0-1-modified.png) In early March, the SSV team identified a number of improvements they wanted to make to their DKG tool. After discussion amongst Lido DAO contributors as well as the SSV Testnet Participants, it was determined that the testnet would be extended to use the updated version of the DKG tool. All clusters upgraded to v.2.0 of the DKG node, and 31 of the 32 clusters ran an additional DKG process for 20 validators which were successfully submitted and registered to the SSV and Lido protocols. The one cluster that didn’t perform the DKG ceremony was due to a Node Operator losing their operator private key (however due to the threshold configuration, this cluster was still able to exit their validators). Once the 31 clusters completed the DKG, registration, and key submission process, it was determined that only two clusters would proceed with the remainder of the process (receiving deposits to the validators and awaiting activation), while the remaining clusters proceeded to exit and remove their validators from the SSV protocol due to the extended entry queue on Holesky. The two clusters that kept their validators running saw the 20 validators successfully activate and good performance was observed. Soon after, all 32 clusters had successfully exited their validators and successfully tested the rewards claiming flow. ## Lido & SSV Testnet: Performance Results ### SSV Cluster Aggregate Results The aggregate testnet results for Lido x SSV clusters surpassed all of the Minimum Testnet Characteristics outlined in the Simple DVT Module Proposal by far! This included a 98.58% Uptime, 94.38% Block Proposal Success Rate, and 80.65% Attestation Effectiveness (all metrics per [Rated](https://www.rated.network/?network=holesky&view=nodeOperator&timeWindow=1d&page=1&ref=blog.lido.fi)). ![](https://blog.lido.fi/content/images/2024/04/Simple-charts3.png) Given the successful metrics, the SSV trial passed all of the requirements for SSV Network based DVT to move forward to the mainnet Simple DVT Module! ### Cluster Results At the cluster level, 30/32 clusters surpassed the Uptime Benchmark, 32/32 surpassed the Attestation Effectiveness benchmark, and 31/32 surpassed the Block Proposal Success rate benchmark. All in, 90.6% of clusters, or 29/32, surpassed all of the observed required benchmarks. ![](https://lh7-us.googleusercontent.com/_3k8eKsAFdpfemNfagVrT8BcWLoNvv4ewQyI4i2-YJbVv32g5zukYd4dIKpzp42dfdg13FiK1iXcPd3hkTgZhC53LX6-mxVCoOHAPAG9Qj4K9oB_vFen191g6C3Fwb-RmUsukqRGSYzP_pDWTxNPKOQ) ![](https://lh7-us.googleusercontent.com/HtdFBUl1LsuEuUysNnZcazphS1CHfE_apSCpLMn9yY4tgLF7dkxf2VWtjJTdFFMpYFkdQnbE5cobuCsYeAz5wFMu1sepQm0qTqdpGJTtsEC-h-5TvlJUvDlGr6Z5QIf4484_tMumbXtUf9nqp39gOPk) ![](https://lh7-us.googleusercontent.com/y0H7ol33ndDD3WpBSJsNeIDj70fdDJj3PwOhD3OtW53UBI7owSMIxZrkW70EjZWx2dokfPAFcspTQTOOn00boPDVe_vQ3aeP1ieEOJJKQNc63l-i5O6lFzkbBXs6uLqlk8eAAhw4m8z6VHe--Qh2XYY) ![](https://lh7-us.googleusercontent.com/878yyrgfhle4vo4EL25F5dFJbSj1L1YVth2-gPA1BX7T-IT4IdhXpgjivJwJkwXjqMJ9hdCotXaa_2lUrlfVtJd12N8XQ3CIgpU4HK7216CkcmEH-0XE3Tv-y7DjWd0nK84Q5JdYcQ5kra8wAq5aG-c) Upon analysing the participants and infrastructure types prevalent across the clusters that did not surpass all of the benchmarks, **a number of factors were observed:** #### 1\. Hardware Type Clusters with a higher number of participants utilizing home-based hardware or low-performance VPS offerings generally saw lower performance results. This is likely due to bandwidth constraints and higher resource consumption on certain nodes that had non-Lido related stakers utilizing these operators to run their validators. #### 2\. MEV & Relays As mentioned earlier in the report, MEV & Relays did play a role in impacting Block Proposal Success Rate in certain cases. Early in the testnet, some issues were observed where validator clients did not always properly fall back to proposing a “vanilla” block in cases where the relay did not provide bids from builders. While the introduction of MEV-Boost generally improved performance, the change in configuration did cause issues for some clusters where participants did not perform the adequate updates. ## Participant Performance While specific participant performance will not be discussed in this blog post, there is an important point to note: participants in clusters that did not reach the minimum performance benchmarks are not automatically excluded from moving forward to mainnet. In many cases, these clusters contained a majority of Node Operators who were highly cooperative with their clusters, responsive to updates and testing requirements and whose nodes were performant. The LNOSG will meet in the coming weeks to examine the quantitative performance results of the trial at the aggregate, cluster, and participant level and will also have the opportunity to examine the qualitative metrics obtained via survey and notes from the trial from the Lido DAO and SSV contributors. Following that, a forum post will be made on the Lido [Lido Research Forum](https://research.lido.fi/?ref=blog.lido.fi) to propose the clusters and participants to move forward to mainnet in Cohort 1 and Cohort 2\. Each participant will receive an email with individual feedback noting the proposed assessment and inviting them to participate in the cluster formation discussion and also optionally in the next testnet if they so choose. ## The Road to Mainnet Following the proposal on the forums by the LNOSG of mainnet participants suggested to move forward, the DAO will have 7 days to discuss the proposal and state any objections. For those participants not proposed to move forward to mainnet, another Lido x SSV testnet will begin in late May/early June, wherein they are invited to participate once again. If no objections to the proposal arise, clusters will begin the coordination process by signing their agreement to the Operating Rules on-chain, setting up their nodes, followed by the Simple DVT Module Committee commencing Easy Track motions (which can be rejected by LDO token holders) to register the SSV clusters to the Lido Simple DVT Module registry. When the steps above are completed and SSV clusters are added to the registry, the Simple DVT Module Committee will raise key limits for the SSV clusters to 5, and a 30 day monitoring period will begin. Following this monitoring period, performance will be shared with the DAO. If the results show strong performance, cluster key limits will be raised again and additional clusters will be added to the module. ## Testing Continues: Lido x SSV Testnet #4 The next Lido x SSV Network testnet is expected to commence in late May or early June. The requirements to participate are provable experience running an SSV Operator. All solo stakers, community stakers, and professional node operators are invited to apply. Please [fill out this form](https://forms.gle/DDwzDQ5an91YLWvq9?ref=blog.lido.fi) if you are interested in participating! --- ### Appendix: SSV Testnet #3 Participants - **Cohort 1**: blockscape, bobby wen, HashKey Cloud, Hellman, Luganodes, OKX Pool & Staking group, Tessier-Hashpool Ltd. - **Cohort 2**: Blockshard, Infer, Kukis Global, LiveRaveN, RomanK, ShardLabs, Spire Blockchain - **Cohort 3**: CVJoint, Deutsche Telekom MMS, Foundry, LIVE🟢NODE, ParaFi Technologies LLC, SRC Technology, Stardust Staking - **Cohort 4**: lux8.net, Republic Crypto, RockawayX, Serenita, Sjors, StakingCabin, DragonStake.io - **Cohort 5**: Allnodes, Mav3rick|BeeHive, ShardLabs, smartinvest.eth, StakeValid, STAKECRAFT, yesaynow - **Cohort 6**: ipetkov.eth, KhunChan, Lanski, Lydia Labs, Pacobits, RockLogic GmbH, stakelab.zone - **Cohort 7**: A41, Coinstamp, Dashing Brand, Forbole, KysenPool, Nodeinfra, StakeWithUs, TytyNode - **Cohort 8**: Anonstake, antotg, CryptoManufaktur, Scott Tan | Node3.tech, Spire Blockchain, Swiss Staking, Tessier-Hashpool Ltd. - **Cohort 9**: 01node, Chainode Tech, Enigma, iicc, jayjay, kjnodes, Stakin OÜ - **Cohort 10**: Colossus, Crouton Digital, Kukis Global, Lanski, Meria, Republic Crypto, Sam | Stakesaurus - **Cohort 11**: ChainOps - Aleksandr, StakingCabin, Kiln, MIDL.dev, Polkachu, selim (archimedes), Spire Blockchain - **Cohort 12**: Cosmostation, DSRV, Eridian, Luciola, marko, Nodes.Guru, Spacesider - **Cohort 13**: 2nh, BlockPI Network, BlockVision, Lydia Labs, OranG3cluB, Rockx, Validation Cloud - **Cohort 14**: Astro-Stakers, IONode Online, Mav3rick|BeeHive, Orion, Scott Tan | Node3.tech, SenseiNode, \[NODERS\]TEAM - **Cohort 15**: 🅰🅻🅴🆇ⒾⓉ, Chainlayer, Deutsche Telekom MMS, Intersecting Sulphide, Matrixed.Link, Stakin OÜ, Swiss Staking, Vladcrypto - **Cohort 16**: Anonstake, Cryptonative Systems, DragonStake.io, GNST, RockawayX, Simply Staking, Zim - **Cohort 17**: Eridian, Launchnodes, Moonlet, Openbitlab, Serenita, Staking4All, VARL - **Cohort 18**: 2xStake, Chainode Tech, D-Stake, Everstake, kxinon, Lightning Strike, POSTHUMAN validator - **Cohort 19**: blockblaz(g11tech), Ebunker, KingSuper.org, Luganodes, Neuler, StakeWithUs, XHash - **Cohort 20**: DSRV, Liquify LTD, longgeek, Nethermind, Node Guardians, Stakely, swiftstaking - **Cohort 21**: Chainlayer, iicc, Irina, Lanski, LIVE🟢NODE, Nodes.Guru, SNC - **Cohort 22**: Blockpower, blockscape, Cosmostation, Dora Factory, Goooodnes, htx-pool, Sam | Stakesaurus - **Cohort 23**: Chainnodes, Epoch Forge, ipetkov.eth, Piconbello, starnodes, STAKR.space, Stakely - **Cohort 24**: Chainbase Staking, Girnaar Nodes, LinkRiver, Pier Two, Sigma Prime, Spacesider, Thunderhead - **Cohort 25**: dimasik, Ellipfra, GBeast, H2O Nodes, InfStones, Prime Cut, Spectrum Staking - **Cohort 26**: 01node, B62Node, Colinka | BeeHive, jayjay, Nethermind, RockLogic GmbH, Sjors, nodeproxyz - **Cohort 27**: Avaunt Staking, gavryushev, Hayhouse Projects, hukutu4.eth | BeeHive, p2p.org, Pier Two, Validation Cloud - **Cohort 28**: 0xFury, Birkoff, CryptoManufaktur, CVJoint, mattstam, Michael, Tessier-Hashpool Ltd., - **Cohort 29**: Ellipfra, farukyasar, Gateway.FM AS, keklodoq, Liquify LTD, Piconbello, tRDM | Nodera, Cryptomanufaktur - **Cohort 30**: ChainUp, Forbole, Hashkey, Lavender.Five Nodes, Luganodes, marko, nodeADDICT - **Cohort 31**: Eridian, HashKey Cloud, H2O Nodes, Lev, Node Guardians, ParaFi Technologies LLC, SRC Technology - **Cohort 32**: A41, Anvil Finance, ChainUp, Hellman, LinkPool, Pacobits, Protofire ### Dual Governance: An Overview URL: https://blog.lido.fi/dual-governance-overview/ Last updated: 2026-07-23T16:59:04.000Z Dual Governance introduces a mechanism that gives stakers a direct role in protocol governance through the dynamic timelock system. Live on Ethereum mainnet since 4 July 2025, it lets stETH holders exit the protocol before potentially contentious proposals take effect. This article is designed to be a starting point, helping to navigate among other in-depth blog posts and technical documentation. ## **What is Dual Governance?** Lido is the leading liquid staking protocol on Ethereum. When staking through the Lido Protocol, users receive a liquid token called stETH, which represents their staked ETH and reflects earned rewards. The protocol is governed by the Lido DAO, with LDO holders voting on upgrades and onchain releases. The two main tokens in the Lido staking ecosystem, stETH and LDO, carry an inherent tension. LDO via the DAO controls upgrade rights, while stETH holders bear execution risk. A decision LDO holders pass can affect stETH holders who never voted for an upgrade. Dual Governance was designed to resolve this tension by giving stETH holders time to leave before contentious proposals take effect. This calls for additional architecture, because of how Ethereum handles exits: all validator exits are processed through a single queue with limited throughput, so withdrawing at scale can take weeks or even months. ## **How Dual Governance works** The mechanism relies on an immutable escrow contract, which accepts stETH, wstETH, and unstETH withdrawal NFTs. Two thresholds apply to the escrow: - **1% threshold:** Once 1% of the total stETH supply is deposited, Veto Signalling is triggered. This delays governance proposals for 5 to 45 days, depending on the level of opposition. - **10% threshold:** Once 10% of the total stETH supply is deposited, Rage Quit is triggered. This blocks all governance motions until all escrowed stETH, wstETH, and unstETH tokens are fully withdrawn. While LDO holders maintain voting power, Dual Governance ensures stETH holders can signal opposition, delay execution, and exit the protocol before changes impact their assets. Once the 1% threshold is reached, there are two potential paths. ### **1\. The Happy Path: De-escalation** stETH holders signal opposition to the contentious proposal passed by the Lido DAO. Seeing the opposition, the DAO cancels the proposal and returns to a discussion with the community. stETH holders then revoke their stETH from the escrow, and Dual Governance state returns to normal. ![](https://blog.lido.fi/content/images/2026/07/Happy_1--1-.png) A moderately bad proposal passed by LDO holders. Examples: well-intentioned but flawed proposals, mistakes, or governance gaps. ![](https://blog.lido.fi/content/images/2026/07/Happy_2--1--1.png) The proposal enters the Dual Governance review process. ![](https://blog.lido.fi/content/images/2026/07/Happy_3--1-.png) stETH holders pick up on this proposal and signal their disagreement. Once more than 1% of the stETH supply is committed in opposition, Veto Signalling is triggered and proposal execution is paused. ![](https://blog.lido.fi/content/images/2026/07/Happy_4--1-.png) LDO holders cancel the problematic proposal and return to discussion with the community. ![](https://blog.lido.fi/content/images/2026/07/Happy_5--1-.png) stETH holders remove their stETH from the escrow, and the DAO resumes a normal state of affairs. ### **2\. The Unhappy Path: Escalation** A contentious proposal is pushed through, and the DAO does not back down. stETH holders escalate, locking enough in the escrow to block execution, and begin exiting. The proposal cannot take effect until the opposed holders have fully left the protocol, swapping their stETH for ETH. Once they are out, governance resumes. ![](https://blog.lido.fi/content/images/2026/07/Unhappy_1.png) A malicious proposal gets enough LDO support to pass. Examples include governance attacks by concentrated LDO holders or hostile changes to withdrawal contracts, fees, or security parameters. ![](https://blog.lido.fi/content/images/2026/07/Unhappy_2.png) The proposal enters the Dual Governance review process. ![](https://blog.lido.fi/content/images/2026/07/Unhappy_3.png) stETH holders catch this proposal and deposit stETH into the escrow. Once more than 1% of the stETH supply is committed in opposition, Veto Signalling is triggered, pausing proposal execution. ![](https://blog.lido.fi/content/images/2026/07/Unhappy_4.png) More stETH holders are alarmed and add their stETH to the Veto Signalling escrow. The more stETH placed, the longer the timelock. If the 10% threshold is reached, Rage Quit activates at the end of the Veto Signalling period (maximum 45 days). ![](https://blog.lido.fi/content/images/2026/07/Unhappy_5--1-.png) The DAO governance process remains frozen until all stETH holders who joined the veto have fully withdrawn their ETH. ![](https://blog.lido.fi/content/images/2026/07/Unhappy_6.png) After all stETH holders have exited the protocol, the DAO returns to its normal state. ## **Dual Governance Development Timeline** - **June 2022**: Dual Governance [is first proposed ](https://research.lido.fi/t/ldo-steth-dual-governance/2382?ref=blog.lido.fi)on the Research forum. - **April 2024:** The design and implementation plan is approved by the DAO [via a Snapshot vote](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x3bdf528b31956e029e867ebf79b02ee07e9a973987b34c5cffc14392e8b4480c) - **September 2024 to February 2025**: Independent audits and formal verification by Certora, Statemind, OpenZeppelin, and Runtime Verification. - **8 May 2025**: LIP-28: Dual Governance (Implementation, Parameters, Committees) proposal is approved by the DAO [via a Snapshot vote](https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x26a66c9b91ff46aeac74b6f6714467993edc6840a8f292fb5c1366fc44dec2a6) - **30 June 2025**: The DAO approves Dual Governance [in an onchain vote](https://dao.lido.fi/vote/189?ref=blog.lido.fi) - **4 July 2025**: Dual Governance [goes live](https://dao.lido.fi/dg/proposals/1?ref=blog.lido.fi) on Ethereum mainnet: [dg.lido.fi](http://dg.lido.fi/?ref=blog.lido.fi) ## **Further Reading** ### **Articles** - [The Dual Governance 101](https://blog.lido.fi/dual-governance-101-explainer/) covers the core idea, thresholds, states, and committees. - [The guide for stETH holders](https://blog.lido.fi/participating-in-dual-governance-a-guide-for-steth-holders/) walks through each scenario, the UI guide covers the interface, and you can monitor and signal at dg.lido.fi. - Full documentation: [LIP-28](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-28.md?ref=blog.lido.fi), the mechanism and specification docs, and the contracts repo. - [Parameters](https://x.com/LidoFinance/status/1923004368414019777?ref=blog.lido.fi): research and stress-tests behind the Dual Governance parameters ### **Podcasts** - [Lido’s Dual Governance proposal: a case study in incentive engineering](https://www.youtube.com/watch?v=lIV8UDHbfEo&ref=blog.lido.fi), Vasily Shapovalov - [stETH + LDO Dual Governance w/ Sam Kozin, Hasu & Nick Cannon](https://www.youtube.com/watch?v=SoXzARn3a0s&ref=blog.lido.fi), Lido Sessions - [Lido Dual Governance | Sam Kozin | LidoConnect 23](https://www.youtube.com/watch?v=zrA6VQgh3bk&ref=blog.lido.fi), LidoConnect talk. - [LDO+stETH dual governance (a high-level overview)](https://www.youtube.com/watch?v=JKvJw2DT2YQ&ref=blog.lido.fi), Sacha Yves Saint-Leger (Lido) - [Hasu and Sam Kozin, Lido Governance](https://www.reverie.ooo/podcast-episode/hasu-and-sam-kozin-lido-governance?ref=blog.lido.fi), Reverie - [Does Lido’s Dual Governance Now Make It the Safest Place to Stake ETH?](https://www.youtube.com/watch?v=kEIauuUf-40&ref=blog.lido.fi), Unchained, with Hasu and Vasily - [How Lido is Redefining Ethereum Staking: Dual Governance, Liquid Staking, and the V3 Upgrade](https://www.youtube.com/watch?v=ReJILMh5-IA&ref=blog.lido.fi), The Defiant, featuring Hasu. - [Securing Liquid Staking: Lido’s Dual Governance Revolution | Tomer Ganor, Certora](https://www.youtube.com/watch?v=pXOwLaoHAoU&ref=blog.lido.fi), the audit-partner (security) angle. ### Simple DVT: A New Phase For Lido on Ethereum URL: https://blog.lido.fi/simpledvt-new-phase-for-lido-on-ethereum/ Last updated: 2024-04-17T08:47:58.000Z **The Simple DVT module is now officially ready for mainnet, with all of the Obol Cohort 1 clusters ready to accept ETH deposits** 🎉 Since the Lido DAO [voted on the deployment of the Simple DVT Module](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xf3ac657484444f0b54eba2c251135c47f875e3d1821496247d11bdd7fab0f291) 6 months ago, the groundwork has been laid to significantly diversify the Lido Node Operator set with the participation of community stakers (including solo stakers) and drive future innovation within the Ethereum staking ecosystem. When new depositable ETH flows into the Lido protocol, it will flow into the Simple DVT Module, and only once the Simple DVT module either runs out of depositable validators or reaches capacity, will any new stake go to the Curated Module. The [third Obol testnet](https://blog.lido.fi/simpledvt-obol-testnet-results/) surpassed all minimum performance benchmarks and [mainnet onboarding of the first cohort of 12 clusters](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/28?u=kimonsh&ref=blog.lido.fi) is underway. The third SSV Network testnet is days away from completion, with all [performance metrics currently above the minimum benchmarks](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/30?u=kimonsh&ref=blog.lido.fi). A blog post reviewing the trial is expected to be published in the coming weeks, with an in-depth overview of both SSV Network DVT and cluster performance. Read on to learn more about the inner workings of the Simple DVT, progress made to date, and expectations for how many Node Operators are expected to be added in the coming months. ### What is Simple DVT? The Simple DVT Module (sDVTm) is the second mainnet Lido protocol module, added following an [on-chain Aragon vote in February 2024](https://vote.lido.fi/vote/172?ref=blog.lido.fi) with record voter participation. The module provides the first opportunity for solo and community stakers to participate in running validators using the Lido protocol by leveraging the established design of the Curated Operator Module and DVT solutions provided by [Obol ](https://obol.tech/?ref=blog.lido.fi)and [SSV Network](https://ssv.network/?ref=blog.lido.fi). Per the [original proposal](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/16?u=kimonsh&ref=blog.lido.fi), the module is initially capped at 0.5% of total Lido stake (with the option to be increased via DAO vote) and is expected to allow for the addition of 250 net-new Node Operators to the protocol. The sDVTm is intended to be wound down within 3 years, during which time more scalable DVT modules with permissionless elements are expected to have been added to the protocol. ## Why Simple DVT? As is now being demonstrated, the fastest route to enhancing the Lido protocol's decentralization and operational robustness lies in adopting DVT. In just the first two cohorts of operators expected to participate in the Simple DVT module using Obol based DVs (Distributed Validators), 139 net-new Node Operators will be using the protocol to run validators. This includes 70 solo stakers, 28 community stakers, and 41 professional node operators, in addition to 22 members of the Lido on Ethereum Curated Set. ![](https://blog.lido.fi/content/images/2024/04/Why.png) In its essence, DVT functions as a system that operates similarly to a multisignature (multi-sig) setup for running a validator. Rather than relying on a single node operator, DVT relies on multiple node operators, each managing distinct nodes that communicate and collectively reach consensus to fulfill validator responsibilities. The benefits of DVT are substantial. It enhances validator resilience, mitigating single points of failure through [active:active redundancy](https://blog.obol.tech/how-dvt-helps-liquid-staking-protocols/?ref=blog.lido.fi) and reducing the risks of validator downtime. It also promotes decentralization in various aspects, including across infrastructure, geographical distribution, and client diversity. Additionally, DVT enhances security by using Distributed Key Generation (DKG), adding an extra layer of protection against potential threats. As the first module in the Lido protocol to adopt DVT, the Simple DVT Module also presents an opportunity to batte-test DVs ahead of expected modules that would add DVT adoption at scale. By seeing the first hundreds of Obol and SSV Network DVs active on mainnet utilizing the Lido protocol, the Lido DAO will be able to assess and compare validator performance in a way that showcases the expected decentralization and resilience benefits that are necessary to justify scaled adoption. ## Mechanisms Used by the Simple DVT Module ### Node Operator Selection Following each testnet, an evaluation process is held by the Lido Node Operator Subgovernance Group (LNOSG) to assess each participant’s performance across various quantitative and qualitative metrics, including uptime, validator duty completion, response times, and ability to self-diagnose and troubleshoot issues with their nodes. During the evaluation, the LNOSG also considers the geographic location, hosting type, and supported execution and consensus layer clients to promote the decentralization and distribution of node level infrastructure. When the evaluation is complete, the LNOSG makes a [proposal to the DAO](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/28?u=kimonsh&ref=blog.lido.fi) including cluster compositions and participants to move forward to mainnet. After a week discussion period, if the DAO does not raise significant concerns regarding the cluster composition or participants, the mainnet onboarding process begins. ### Simple DVT Module Committee To reduce operational friction in voting, the DAO voted to create a multi-sig committee known as the Simple DVT Module Committee (SDVTMC) to be responsible for creating [Easy Track](https://docs.lido.fi/guides/easy-track-guide/?ref=blog.lido.fi#motivation-behind-easy-track) motions specifically for Simple DVT that can create new clusters, activate and deactivate existing clusters, raise and lower cluster key limits, and change cluster manager and reward addresses. The [Simple DVT Module Committee](https://research.lido.fi/t/simple-dvt-module-committee-multisig/6520?u=kimonsh&ref=blog.lido.fi) is made up of two contributors from the Lido DAO, 3 contributors from the Lido Node Operator Subgovernance Group, one Obol contributor, and one contributor from the SSV Network DAO. The Easy Track optimistic governance process streamlines the execution of operational processes related to the expected 60-80 mainnet Simple DVT clusters in 2024\. On mainnet, a 72 hour objection period exists for LDO voters to veto any active motions related to these cluster operations by using the Simple DVT EasyTrack smart contract, with an [optional UI also available](https://easytrack.lido.fi/?ref=blog.lido.fi). ### Simple DVT Economics & Reward Distribution To encourage Node Operator participation and support DVT providers, the Simple DVT Module has a 2% treasury fee and an 8% module fee ([as described in the Lido Staking Router technical docs](https://docs.lido.fi/contracts/staking-router?ref=blog.lido.fi#registering-a-module)), shared between Node Operators and DVT providers. This economic model acknowledges the unique challenges of running a small number of validators with multiple parties and aims to sustain DVT technology development. ![](https://blog.lido.fi/content/images/2024/04/scheme.png) Each participant receives 1% of net cluster rewards regardless of DVT provider. Obol also receives 1% of net Obol cluster rewards, while SSV Network receives rewards denominated in the SSV token via SSV Network Fees. As outlined in the [SSV \[DIP-11\] Mainnet Proposal](https://snapshot.org/?ref=blog.lido.fi#/mainnet.ssvnetwork.eth/proposal/0x90af2241fb2b3b3242dfb98efb9185b5bafac00d1cb300542a107d0df4ef6e12), the SSV Network fee is currently 0.5% of Ethereum staking rewards. This will increase to 0.75% after 365 days pass from the launch of the initial configuration, and increase to 1% 730 days after the launch of the initial configuration. The SSV DAO grants committee [approved a grant](https://forum.ssv.network/t/ssv-x-ssv-dao-grant-proposal-lido-simple-dvt/1337?ref=blog.lido.fi) to cover the SSV Network SSV token network fee for the first year of operation in February. During the cluster setup phase, each participant submits their Individual Manager Address and Individual Reward Address, from which cluster specific multi-sigs representing their Cluster Node Operator entries are generated and reward splitter contracts are pointed to for validator reward distribution. To simplify the reward claiming process for Simple DVT Node Operators, clusters utilize two sets of smart contracts: 1. [A wrapper developed by Obol](https://github.com/ObolNetwork/obol-splits?ref=blog.lido.fi) that wraps stETH rewards into wstETH, charges an (optional) fee, and sends the remainder of the wstETH to the next smart contract, 2. An [0xsplits](https://github.com/0xSplits?ref=blog.lido.fi) set of smart contracts that allows for the distribution of rewards between participants. A wrapper contract is created via the ObolLidoSplit factory and this contract is specified as each cluster’s reward address. This contract is responsible for wrapping stETH rewards to wstETH and [when applicable](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/16?ref=blog.lido.fi#simple-dvt-module-economics-10), gives the DVT provider their reward share. This contract can be called by anyone, and will transfer wstETH to a split contract created via another factory (the main 0xsplit contract), from where each individual cluster participant can claim their rewards. ## Current Status As of April 16th 2024, the Simple DVT Module has been deployed on mainnet and the first 12 clusters of Obol Cohort 1 have onboarded onto mainnet [following a successful testnet surpassing all minimum performance benchmarks](https://blog.lido.fi/simpledvt-obol-testnet-results/). The Cohort 1 clusters are in the process of receiving deposits for their initial 5 validators. When each of these 12 clusters have 5 active validators, a 30 day performance monitoring period will begin. ![](https://blog.lido.fi/content/images/2024/04/Timeline.png) At the conclusion of the 30 days, a performance report will be presented to the DAO, and if performance is comparable to the overall validator set, a proposal to raise the key limits of these clusters to 10 validators each and start onboarding of the Obol Cohort 2 clusters will be made. For SSV, the first clusters have now exited and the performance monitoring period is finished, with SSV Network also surpassing all of the minimum required benchmarks. Participants in the testnet are in the process of removing their validators from the SSV Network smart contracts, and will be testing the testnet reward claiming flow. ![](https://blog.lido.fi/content/images/2024/04/Chart.png) A blog post detailing the entire SSV Network testnet is expected to be published next week, including an in-depth review of overall SSV and cluster performance and next steps for SSV participants’ path to mainnet. ## Scaling the Simple DVT Module With the Simple DVT Module now deployed and the Obol and SSV Network testnets complete, the SDVTM has officially entered the scaling stage. The original Simple DVT Module proposal suggested 210+ net-new Node Operators could be onboarded to the protocol via the Simple DVT module. Following the successful Obol testnet where 139 net-new Node Operators were proposed to the DAO for mainnet onboarding, this goal was updated to reflect the potential addition of 250 net-new Node Operators, with the opportunity to be surpassed following the 4th round of Lido x Obol & SSV Network testnets. On top of the 37 existing Lido on Ethereum Curated Node Operators, the addition of 250 net-new Node Operators on mainnet **would represent 676% growth in the number of NOs using the Lido protocol to run mainnet validators**. By utilizing DVT, the infrastructure run by these Node Operators is expected to be more resilient, secure, and decentralized, with each validator benefiting from DKG, nodes run from multiple countries, and with different client combinations. As Obol and SSV Network Cohorts 1 & 2 are added to the module, regular performance updates will be shared with the DAO. If performance of these validators looks comparable to the overall validator set, a proposal to raise the share limit of the module to 1.5% - 2% could be made to the DAO to improve the economic premise for these participants as well as potentially add further growth to the number of participants. ## Next Steps Importantly, the Simple DVT Module is just an initial step bringing improved resilience and a wider Node Operator base to the Lido protocol. The module is not intended to operate indefinitely, but rather to pave the way for more sophisticated DVT modules that could allow for elements of permissionless onboarding. In addition, a team of Lido DAO contributors are working on the Community Staking Module (CSM), the first module expected to be added to the Lido protocol that offers permissionless entry. While the design parameters are not yet finalized an extensive [Community Staking Architecture doc](https://hackmd.io/@lido/rJMcGj0Ap?ref=blog.lido.fi) has been published with plenty of details and explanation of thoughts gone into the design of the module. The CSM is expected to be highly competitive with a low, capital efficient (staked) bond, no secondary collateral requirements, and offer low gas costs for Node Operator formation and validator management. Excitingly, Node Operators interested in running DVT validators with their friends or colleagues will also be able to utilize the CSM to run DVT based validators through their provider of choice. Participants of Simple DVT testnet will also be eligible to participate in the CSM’s Early Adoption period, with plans for a reduced bond required to set up their first validator! The Simple DVT Module is an exciting first step in democratizing access to running Ethereum validators. With hundreds of new Node Operators set to participate in the module, Simple DVT plays an important role in opening up access to using the Lido protocol for more Node Operators, with future opportunities expected over the coming months and years. If you are interested in participating in the Simple DVT Module, there is still a short window to apply for the next SSV Network testnet. All solo stakers, community stakers, and professional node operators are invited to apply, with the only prerequisite being experience running an SSV based validator on mainnet or testnet. Apply [here](https://forms.gle/CrUF7oBVWas1msqa9?ref=blog.lido.fi) before the April 24th deadline. ## Find Out More - [Staking Router Module Proposal - Simple DVT](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625?ref=blog.lido.fi) - [What is Simple DVT? - NOCC Short #11 with Will Shannon](https://www.youtube.com/watch?v=SHCAJaZ1Bgs&ref=blog.lido.fi) - [Obol Network Testnet Blog (Lido Version)](https://blog.lido.fi/simpledvt-obol-testnet-results/) - [Obol Network Testnet Blog (Obol Version)](https://blog.obol.tech/lido-simple-dvt-wave-1-testing-complete/?ref=blog.lido.fi) - [Obol Network](https://obol.tech/?ref=blog.lido.fi) - [SSV Network](https://ssv.network/?ref=blog.lido.fi) ### Lido meets IPFS: The Staking Widget Goes Decentralized URL: https://blog.lido.fi/lido-ipfs-decentralized-staking-widget/ Last updated: 2026-08-22T11:37:56.000Z ### TL;DR: - The Lido Staking Widget is now running on IPFS. - Lido is leveraging the InterPlanetary File System (IPFS) to enhance data resilience in UI components. - Dedicated tooling created in the form of [Blumen](https://blumen.stauro.dev/?ref=blog.lido.fi) CLI. Efficient deployment with functionality to update content hashes using a multisig Safe Contract. ## The Basics of IPFS The InterPlanetary File System (IPFS) is a decentralized and distributed protocol designed to facilitate the peer-to-peer storage and sharing of content across the internet. It has the added benefit of hosting web content - such as UI components or staking widgets - in a more decentralized way. Due to these distributed properties and more, using IPFS to host UI components can provide meaningful decentralization and accessibility for users. Let’s dive into how this could all work. ![](https://blog.lido.fi/content/images/2024/03/IPFS-why.png) ## How does IPFS work with Lido? For a deeper insight into the deployment process, see this [link.](https://www.google.com/url?q=https://docs.lido.fi/ipfs/about&sa=D&source=docs&ust=1710843355722838&usg=AOvVaw15lFjHJK3nxAvW3Z7kvvrE) The integration of IPFS pinning into the Lido User Interface (UI) is orchestrated through a number of GitHub Actions, prioritizing major protocol updates in order to lessen any potential UI disruption. After the deployment of any major update, the automatic pinning of UI assets takes place, leveraging multiple IPFS providers for enhanced decentralization. Upon the successful validation of the IPFS deployment process, pinning details are appended to the application's GitHub releases page, offering transparent documentation on providers, CI execution, and gateways. This process, encompassing essential functions such as data retrieval, script execution, and description modification, operates seamlessly within GitHub Actions, allowing users to specify RPC nodes to their preferences. ![](https://blog.lido.fi/content/images/2024/03/interface--1-.png) The staking widget served by IPFS Furthermore, the deployment process will be transparent and comprehensible for both the team and external users. In other words, anyone can visit the project repository to observe the specific time and location of the IPFS deployment. Additionally, anyone has the capability to independently verify the safety of the deployment and ensure that no modifications have been made to the content of the [documents.](https://docs.lido.fi/ipfs/hash-verification?ref=blog.lido.fi) ## Adapting IPFS Further: The Blumen CLI With the help of an external contributor who created the [Blumen](https://blumen.stauro.dev/?ref=blog.lido.fi) CLI, Lido Protocol takes the use case of IPFS to a new level within the Ethereum space. Blumen is a CLI and API library to deploy apps on the decentralized web using IPFS and Ethereum. It facilitates multi-provider deployment, enabling the simultaneous deployment of web applications on various IPFS providers such as web3.storage and Gateway3, whilst also seamlessly integrating with the Ethereum Name Service (ENS). For added security and decentralization, Blumen supports the updating of ENS records using a multisig Safe wallet contract, providing an additional layer of protection to the deployment and update process. 0:00 /0:23 1× The result is a CLI that automates all deployment processes on IPFS+ENS, creating a streamlined and efficient pipeline. Unlike traditional server-based systems, IPFS employs a distributed network of nodes, each storing a portion of the content, making it resilient to single points of failure. IPFS utilizes Content IDs (CIDs), cryptographic hashes representing the content, to ensure data uniqueness and integrity. By leveraging this technology, Blumen CLI advances the potential for IPFS on Ethereum by adding an additional level of security to the maintenance and updating of CID’s utilizing a Gnosis Safe Multisig contract. As a result, users can efficiently retrieve and share content by referencing its CID, these CID’s could then be linked to human readable addresses like ENS domains for ease and usability. ## How IPFS benefit stakers? IPFS offers significant advantages in terms of decentralization, fault tolerance, and reduced bandwidth costs for end users. The distributed nature of IPFS means that content is replicated across multiple nodes, and this fault-tolerant design ensures that even if some nodes are offline, users can still access the content through alternative nodes. ## Future Plans To Integrate & Govern IPFS functionality The present approach, which utilizes GitHub for the release and update of IPFS by Lido contributors, is a temporary measure. It's part of a comprehensive plan aimed at transitioning to a more decentralized alternative. This interim IPFS solution, currently facilitated through GitHub, is intended to evolve into an on-chain configuration, subject to governance voting. This voting process will be transparent to both users and the DAO, ensuring that any new changes are made only after receiving governance approval. ## Moving Forwards The adoption of IPFS by Lido Protocol benefits users by enhancing data resilience, optimizing accessibility and efficiency, and furthering the protocol's commitment to a decentralized and more secure ecosystem. Furthermore, IPFS aligns with the broader ethos of decentralization that Lido Protocol embodies. The protocol's commitment to providing users with secure and decentralized solutions is reinforced by integrating IPFS, which eliminates reliance on traditional centralized storage models. Last but not least, a huge shout out to the [Blumen CLI](https://github.com/staurodev/blumen?ref=blog.lido.fi) author for their contribution in creating the added functionality to IPFS bettering the Ethereum ecosystem as a whole. - Blumen Author's [Warpcast](https://warpcast.com/v1rtl?ref=blog.lido.fi). ### Lido & Dencun: A Layer 2 Roadmap URL: https://blog.lido.fi/lido-dencun-layer2-roadmap/ Last updated: 2024-03-18T12:26:01.000Z ## TLDR: - **EIP-4844 Introduction**: The Dencun hardfork signals the beginning of Ethereum's "The Surge" phase, introducing EIP-4844, which brings Proto-Danksharding to Ethereum, reducing fees for L2 rollups. - **Expansion of [wstETH](https://help.lido.fi/en/articles/5231836-what-is-lido-s-wsteth?ref=blog.lido.fi) Presence**: A Network Expansion Workgroup was established to facilitate the expansion of wstETH across seven L2 networks and develop a bridging guide for settling [stETH](https://help.lido.fi/en/articles/5230610-what-is-steth?ref=blog.lido.fi) on Layer 2 networks. - **Prioritizing Security and Risk Isolation**: Security is prioritized in L2 network expansion, utilizing canonical bridges and isolating tokens in separate bridge contracts to minimize cross-domain risks. - **Bridging Architecture**: The proposed bridging architecture involves dedicated bridge endpoint contracts on L1 and L2, governed by Lido DAO, offering capabilities like passing arbitrary data and future-proofing the token. - **Deployment Considerations for New L2 Networks**: Proposals for deploying wstETH on new L2 networks such as Scroll, Starknet, and Lisk are outlined. - **Ongoing Research for Rebaseable stETH on L2**: Rebaseable stETH on L2 networks offers benefits, including accurate staking/withdrawal requests, gas payments in stETH, and consistent user experience across Layer 1 and Layer 2 environments. ## What is Ethereum’s Dencun Hardfork? The Ethereum Dencun hardfork combines two simultaneous upgrades - Deneb and Cancun - affecting both the [Consensus Layer](https://ethereum.org/en/developers/docs/consensus-mechanisms/?ref=blog.lido.fi) and the [Execution Layer](https://ethereum.org/en/developers/docs/networking-layer/?ref=blog.lido.fi#execution-layer). The main purpose of the hardfork is to substantially lower fees for scaling solutions built on top of Ethereum, collectively known as [Layer 2 (L2)](https://blog.lido.fi/lidos-steth-comes-to-layer-2/) solutions. The main goal of L2s is to increase Ethereum transaction throughput without compromising network security or decentralization. More specifically, it is the activation of [Ethereum Improvement Proposal (EIP) 4844](https://www.eip4844.com/?ref=blog.lido.fi), introducing something known as Proto-Danksharding, which aims to bring about these L2 improvements. ## What is EIP 4844? Signaling the start of [The Surge](https://twitter.com/VitalikButerin/status/1588669782471368704?ref=blog.lido.fi) phase within Ethereum's rollup-centric roadmap, the upcoming [Dencun hardfork](https://blog.ethereum.org/2024/02/27/dencun-mainnet-announcement?ref=blog.lido.fi) enables the much-anticipated EIP-4844. EIP-4844 introduces Proto-Danksharding to Ethereum, a sharding technique that divides the network into independent shards for parallel transaction processing. It utilizes "blob transactions" attached to existing blocks, providing time-constrained storage for L2 rollups and reducing operational costs. Consequently, EIP-4844 holds the potential for a substantial reduction in fees for L2 rollups by an order of magnitude, bringing about a new era for Ethereum L2 networks. ## Lido & Dencun: Expanding the wstETH L2 Presence In anticipation of Ethereum’s Dencun hardfork, Lido DAO contributors have made a number of the following advancements over the previous year to improve the presence of [Lido on L2](https://lido.fi/lido-on-l2?ref=blog.lido.fi): - Over the past [two years](https://blog.lido.fi/lidos-steth-comes-to-layer-2/), the presence of [wstETH](https://help.lido.fi/en/articles/5231836-what-is-lido-s-wsteth?ref=blog.lido.fi) has been extended to encompass seven L2 networks: Arbitrum, Optimism, Polygon, Base, Linea, zkSync & Mantle. At the time of writing, more than 140,000 wstETH have been bridged to Ethereum L2s. ![](https://lh7-us.googleusercontent.com/vtXpj0--dgg3T5bRD1O_zFhJq7LNG7YEUP4QuOZVvJIzQx8tUMMDJfnfkTR1kBmc26k01SjMd_ZLzkCp34j-EHoeNpssiQySQ2gE9MhcwH2rSZGZgx6dOo2ynarAyCicGzZLOPmJHf3JhjIDDyyem04) - Support for wstETH has been expanded to numerous DApps across these [L2 ecosystems](https://dune.com/pipistrella/wsteth-on-l2s?blockchain%5Fef6ccb=&ref=blog.lido.fi), significantly lowering barriers to entry for users keen on engaging in [DeFi activities](https://lido.fi/lido-ecosystem?tokens=wsteth&criteria=or&networks=polygon%2Clinea%2Cmantle%2Czksync+era%2Cbase%2Coptimism%2Carbitrum&ref=blog.lido.fi) across these networks to benefit from higher speeds and lower networks fees. - A dedicated [Network Expansion Workgroup](https://research.lido.fi/t/unofficial-guidelines-for-bridging-solutions-network-expansion-workgroup/5790?ref=blog.lido.fi) has been established to facilitate the expansion of wstETH across L2 networks. This initiative has furthermore seen the development of a [bridging guide](https://docs.lido.fi/token-guides/wsteth-bridging-guide?ref=blog.lido.fi) for networks and DAOs interested in bridging Lido's wstETH on Ethereum L2 networks. ### Prioritizing Security & Risk Isolation When it comes to the expansion of L2 networks and token bridging, a key principle revolves around prioritizing security and implementing a strategy that isolates cross-domain risks. To achieve this, the following two assumptions are taken into consideration: - The canonical bridge is regarded as the optimal solution for linking any wstETH on a given L2 network with the security framework of the bridge itself. This ensures that the security model and trust assumptions of the bridge are seamlessly integrated with those of the rollup (not introducing new 3rd-parties and actors). - To mitigate risks across different L2 networks, it is proposed to isolate tokens by escrowing them in separate, disentangled bridge contracts. Each of these contracts maintains a 1:1 correspondence with their respective bridged counterparts. This strategy aims to minimize the impact of cross-domain risks. Otherwise, pooling liquidity across different L2 networks, while potentially beneficial in terms of economic efficiency, would jeopardize security isolation for all token holders except those who haven't participated in bridging activities. This conflicts with the notion of deliberately opting in for explicitly outlined risks. ### Lido's wstETH Bridging Architecture The proposed bridging guide architecture entails the deployment of dedicated bridge endpoint contracts behind a proxy on both Layer 1 (L1) and Layer 2 (L2), alongside an upgradable token on L2\. These components are designed to be governed by the Lido DAO on L1, facilitated through an [Aragon Agent contract](https://etherscan.io/address/0x3e40D73EB977Dc6a537aF587D48316feE66E9C8c?ref=blog.lido.fi), and managed via a dedicated governance executor contract on L2\. This executor acts as a forwarder of the Lido DAO vote decisions when necessary. This architectural design is intended to offer the following capabilities: - **Passing Arbitrary Data**: This capability allows for the foundation of bridging rebaseable stETH in the future, including the necessity to pass the wstETH/stETH rate. - **Revamping Token Logic**: As (w)stETH is not a general-purpose token but rather an asset built on top of a living liquid staking middleware, the architecture allows for the necessary adjustments to the token logic. - **Future-Proofing the Token**: The upgradeable token design allows for seamless integration of new token standards like [ERC-2612](https://eips.ethereum.org/EIPS/eip-2612?ref=blog.lido.fi) and [ERC-1271](https://eips.ethereum.org/EIPS/eip-1271?ref=blog.lido.fi), minimizing the need for costly liquidity migration as Ethereum evolves. - **Pausing and Resuming Bridging**: In cases of emergencies or during upgrades, the architecture supports the ability to pause bridging activities via designated [Emergency Breaks](https://research.lido.fi/t/emergency-brakes-signer-rotation/5286?ref=blog.lido.fi) committee. ### Staked ETH on L2: stETH or wstETH? To date, Lido’s Layer 2 bridging strategy has been built around wstETH - the wrapped version of stETH - due to the simplified integration process for partnering networks. In the near future however, the Lido Network Expansion Group is aiming to further develop support for the unwrapped, [rebaseable stETH across L2 networks.](https://research.lido.fi/t/lip-22-steth-on-l2/6855?ref=blog.lido.fi) The potential implementation of rebaseable stETH on L2 networks, atop the existing sophisticated wstETH bridging solution architecture, holds several significant benefits beyond merely updating account balances for stETH. These hypothetical future use cases and scenarios for rebaseable tokens include: - **Staking/Withdrawal Requests from L2s**: Users originating staking or withdrawal requests from Layer 2 networks may have the capability to factor in stETH rebases that occurred during the bridging period. This ensures accuracy and integrity in staking and withdrawal activities. - **Gas Payments in stETH**: Enabling gas payments in stETH, particularly on rollups that support token gas payments (e.g., following the Account Abstraction), allows for seamless transaction settlement with amounts closely resembling ether. This enhances usability and efficiency within the ecosystem. - **Cross-Domain stETH Deposits/Withdrawals**: The ability to facilitate deposits and withdrawals of stETH across both Layer 1 (L1) and Layer 2 (L2) networks offers flexibility and interoperability for users, particularly beneficial for centralized exchanges (CEXes). - **Direct Support for L2s by Custodians and Service Providers**: Custodians and service providers can directly support Layer 2 networks, facilitating DeFi interactions, deposits, and withdrawals. They can charge fees with each rebase, ensuring sustainable revenue streams, while users experience transparent balance adjustments. - **UX Consistency**: As routine user activity transitions from Layer 1 to Layer 2, maintaining a consistent user experience, particularly with rebaseable tokens, is essential. Ensuring familiarity and usability for users across both environments enhances adoption and engagement. For more information on stETH on L2, check out [https://research.lido.fi/t/lip-22-steth-on-l2/6855](https://research.lido.fi/t/lip-22-steth-on-l2/6855?ref=blog.lido.fi). ## What's Next for Lido on L2? Over the coming months, plans are in place to expand the usability of Lido’s wstETH across many more L2 networks. ![](https://lh7-us.googleusercontent.com/NqlczmTUkPLrohAAdECa3xrpwZW63etvf-DIcF6aFjEhyvqVP9XHfy6kAQKLH4rPCkF93CDHT16eoIhNafH6NcGUTDtljnxe4gJN8WatEucOcoowLFDcyoo4cECLVVG76kKOT16v9XfrcHhMRc4ebwc) Ongoing discussions are taking place on the Lido Research Forum regarding proposals for the deployment and recognition of wstETH on new and prominent L2 networks: - Scroll: [Official Proposal](https://research.lido.fi/t/wsteth-deployment-on-scroll/6603?ref=blog.lido.fi) - Starknet: [Official Proposal](https://research.lido.fi/t/wsteth-deployment-on-starknet/6335?ref=blog.lido.fi) - Lisk: [Temp-Check Proposal](https://research.lido.fi/t/temperature-check-wsteth-deployment-to-lisk-and-ownership-acceptance-by-lido-dao/6669?ref=blog.lido.fi) Lido stands on solid ground to not only keep pace with Ethereum's expansion but also become an indispensable part of the thriving L2 ecosystem, bolstered by the growing presence of stETH. The dedication to expanding Lido across further L2 networks remains, so stay tuned for further expansion proposals on the [Lido research forum](https://research.lido.fi/?ref=blog.lido.fi). Till then, happy staking 🏝️ ### Lido Community Staking: Stake Allocation & Validator Exits URL: https://blog.lido.fi/lido-community-staking-allocation-exits/ Last updated: 2024-02-26T15:56:58.000Z This article is the last in a four-part explanatory series about Community Staking Module (CSM). It explains how CSM allocates stake and handles validator exits or ejections. For the previous articles, please refer to the following list: - #1: [Overview of Community Staking Module (CSM)](https://blog.lido.fi/lido-community-staking-an-overview/) - #2: [Bonding](https://blog.lido.fi/community-staking-module-bonding/) - #3: [Rewards & Penalties](https://blog.lido.fi/community-staking-module-rewards-penalties/) - #4: [Stake allocation & Validator Exits](https://blog.lido.fi/lido-community-staking-allocation-exits/) # Stake Allocation The allocation of stake to Node Operators within CSM depends on the protocol-wise and module-wise allocation mechanisms. Each module has a predefined parameter (configurable by DAO vote) known as targetShare at the protocol level. This represents the maximum percentage of the total Lido protocol stake a module can get. Currently, stake at the protocol level is allocated as such: - Modules are prioritized based on current stake share, where modules with the fewest active validators receive priority; - Modules must have enough theoretical capacity (stake to be deposited <= difference between the module’s currentShare and targetShare); - Modules must have enough real capacity (i.e. sufficient validators submitted to validator registry) to absorb this stake. At the estimated time of CSM launch, the module will be in the position to receive the highest priority for stake allocation, since it initially would have no stake. It was proposed to set the targetShare at 1% initially and then gradually increase it to a maximum of 10% via DAO vote as the module matures. Inside the module, a FIFO (first in, first out) mechanism is employed to distribute stake. Every Node Operator has to lock their bond to upload new validator keys, so it is fair for them to get stake in the same or similar order they deposit bond funds. While a potential long Ethereum validator entry queue would result in delays in gaining validator rewards from running validators, the bond would be staked and immediately acquire staking rewards for operators. This is preferable to the bond being unproductive capital while operator validators are idle. # Validator Exits ### Voluntary Exits Given CSM’s permissionless nature, operators are allowed to exit validators at their discretion and subsequently claim their unlocked bond. Prior to the bond release, CSM has to know a validator’s withdrawal balance and decide whether losses took place. If so, losses are confiscated from the bond. Withdrawal balance information would be delivered in a trust-minimised way by leveraging [EIP-4788](https://eips.ethereum.org/EIPS/eip-4788?ref=blog.lido.fi). Once the final releasable amount of the bond is determined, it is eligible for them to claim it. ### Passive Exits According to the [Lido on Ethereum Validator Exits Policy](https://hackmd.io/zHYFZr4eRGm3Ju9%5FvkcSgQ??ref=blog.lido.fi), each module should support validator exits to fulfill withdrawal requests for stakers. However, due to the existing VEBO algorithm, CSM validators will have the lowest priority when it comes to exiting validators. This also indicates that Lido encourages community stakers’ participation, and acknowledges the fact that bonded validators are more beneficial for the protocol in terms of economic security. Once the Execution layer triggerable exits introduced by [EIP-7002](https://eips.ethereum.org/EIPS/eip-7002?ref=blog.lido.fi) are implemented, the Lido on Ethereum protocol will be able to eject validators through the protocol’s validator withdrawal credentials. The forced ejection can be triggered in case of a huge dip in a validator’s balance or a lack of bond coverage. Aside from slashing, a validator’s balance rarely experiences a significant short-term drop. However, being offline or submitting incorrect attestations for an extended period could lead to substantial accumulated losses. It is assumed that something should be wrong with the validator in such a case (e.g. missing its validator key or ceasing maintenance), and it should be ejected to prevent additional losses for stakers. In another scenario, when the validator’s bond can’t meet the minimum bond requirement after the application of a penalty, it should also be ejected from the economic security perspective. # What’s Next The Lido DAO is dedicated to enhancing the security and decentralization of Ethereum. In line with this mission, the introduction of the Community Staking Module will mark a significant milestone by onboarding permissionless Node Operators and building a more robust validator set. As mentioned before, CSM was expected to commence its testnet and mainnet in late 2024\. Please join [the CS discord forum](https://discord.com/channels/761182643269795850/1171819568721829961?ref=blog.lido.fi) to build a community-driven module together. Thanks for reading the whole blog series and feel free to claim the OAT via [Galxe](https://galxe.com/lido/campaign/GCEdvt4Q9c?ref=blog.lido.fi). ### Lido Community Staking: Rewards & Penalties URL: https://blog.lido.fi/community-staking-module-rewards-penalties/ Last updated: 2024-02-26T14:42:38.000Z The third blog in the series on the Community Staking Module (CSM) delves into the intricacies of reward distribution within CSM and between modules, alongside an examination of CSM's strategies in addressing possible MEV stealing. For the previous parts refer to the list below: - #1: [Overview of Community Staking Module (CSM)](https://blog.lido.fi/lido-community-staking-an-overview/) - #2: [Bonding](https://blog.lido.fi/community-staking-module-bonding/) - #3: [Rewards & Penalties](https://blog.lido.fi/community-staking-module-rewards-penalties/) - #4: [Stake allocation & Validator Exits](https://blog.lido.fi/lido-community-staking-allocation-exits/) # What are rewards? When running validators on Ethereum, operators may receive two types of rewards. The first type is known as Execution Layer (EL) rewards, which encompass priority fees and potential MEV rewards earned as a result of block production. The second one consists of Consensus Layer (CL) rewards, which validators receive upon the correct execution of certain Consensus Layer duties such as attestations, sync committees, and block proposals. When CSM operators use the Lido protocol to run validators, they accrue two kinds of rewards: - Validator rewards: a share of the total protocol rewards mentioned above (relative to the operator’s share of active validators in the protocol, and multiplied by a module-specific operator rewards share variable), and - Bond rewards: staking rewards generated from the bonded tokens. The following section explains the first kind of rewards (i.e. validator rewards). # Reward Smoothing Between Modules Under the Staking Router’s architecture, multiple modules will be present, each having registered different subsets of validators with potentially different performance levels. For example, the Curated Module is generally expected to outperform CSM (as node operators curated operators who validate as a business), thereby contributing more significantly to Consensus Layer rewards. Conversely, an underperforming module may generate a lower reward return. ![](https://lh7-us.googleusercontent.com/PVinth1KMUu9ru-JjUbIA_nVvw0eV5eNcxX-OzRicvHATBZHaLI_ZpG8OugZY7b-ABHpfgoEeLrLeacgCWwIf1SgEFjit3PmCWUHAg-wwwBFn7JBkUbmNA0UyC-U45IghY2RP5vFpHA1ik5K3ZwQS-o) To minimize the reward disparity, smoothing is employed by the Staking Router. This involves averaging the rewards across different modules, taking into account the number of active validators in each. When it comes to Execution Layer rewards, the independent operators in CSM do not need to worry about producing a block with a low MEV bonus or proposing a block only once or twice every six months, since EL rewards are part of the protocol-wide rewards smoothing mechanism. This reward smoothing feature ensures that volatile rewards (if an operator is running few validators) are instead consistent and close to the average expected value. # Reward Socialization Inside CSM Another innovative feature is reward socialization within CSM via the use of a Performance Threshold, which is used to determine reward distribution. Per claim period (frame), validators whose performance exceeds a certain threshold will share the rewards received by CSM (based on their share of active validators). On the other hand, underperforming validators whose performance falls below the threshold will receive no rewards for the given frame. ![](https://lh7-us.googleusercontent.com/5R0Ds0imGbgY0tHfs4yOQF1A2vh5bbd-YQpexpE_NugddjJj3YgUkcD6gN6IFT0TA0rfZS7nN43XOZ-TBkFJ-aupanyJoDeIXX5WZSf03lVt-F2berTZ4vKo0F_zQ_a43K_7e-bIr9KRf2EQ2HCJUjQ) Most importantly, since CSM is geared towards community stakers, the idea is to allow for a reasonable performance leeway, ensuring that Node Operators do not receive reduced rewards due to short-term performance dips caused by factors such as internet or power outages. Additionally, the existence of the “bad performers” sub-set actively discourages free-riding behaviors (e.g. not running the validators that have been registered) and poor validator operation. While the approach has been proposed, the threshold has not yet been determined. As always, feel free to share any ideas or thoughts [on the forum proposal](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi). # Penalties & MEV Theft Detection In the previous section, we mentioned that a Node Operator’s bonds would be penalized if the balance of any of their validators were to fall below the default initial deposit amount at the time of validator withdrawal, or if they are found to be misappropriating MEV rewards. While the first penalty situation, which involves monitoring validator balances, is straightforward to check, MEV stealing detection can be complex due to the variety of block-building approaches in use and the infeasibility of accounting for all cases. At this juncture, it’s proposed to follow [the current approach](https://hackmd.io/@lido/HJZ52G0T9?type=view&ref=blog.lido.fi) for CSM to monitor and assess MEV theft, and form a CSM committee dedicated to temporarily freezing the bond in case of MEV stealing detection. However, the actual penalties would be enforced through on-chain governance (i.e. Easy Track). Since the proposed approach might be sub-optimal, contributors are looking for community feedback on the alternatives to MEV stealing monitoring & mitigation. # What’s Next? The next (and final) article in the Lido Community Staking series will discuss stake allocation algorithms and validator exit rules. Stay tuned! If you would like to continue any topical discussions related to CSM, please join our Discord CS forum - [#community-staking-forum](https://discord.com/channels/761182643269795850/1171819568721829961?ref=blog.lido.fi). ### Taurus Enables stETH Custody & Staking Amid Demand from Banking and Corporate Clients URL: https://blog.lido.fi/taurus-enables-steth-custody-staking/ Last updated: 2025-05-28T14:54:27.000Z [Taurus](https://www.taurushq.com/?ref=blog.lido.fi), a leading global digital asset infrastructure provider, today announces a strategic partnership with [Lido Protocol](https://lido.fi/?ref=blog.lido.fi), the middleware liquid staking solution for Ethereum. Taurus has integrated Lido and added custody and staking support for staked Ethereum (stETH) to [Taurus-PROTECT,](https://www.taurushq.com/protect/?ref=blog.lido.fi) the market-leading banking-grade custody solution. The Lido protocol programmatically solves problems associated with native ETH staking, such as illiquidity, accessibility, and dealing with hardware. Taurus has also expanded [Taurus-EXPLORER](https://www.taurushq.com/explorer/?ref=blog.lido.fi), its blockchain connectivity infrastructure, including nodes and indexing, to support the Lido middleware. In response to growing institutional demand, Taurus’ clients now gain access to Lido’s liquid staking middleware solution, allowing them to stake their Ethereum and access rewards while still using stETH for other on-chain activities, including liquidity pool swapping (to exchange stETH for ETH). Taurus serves as the trusted platform for Europe's largest financial institutions and corporate firms, and over half of Switzerland's banks that provide digital asset services rely on Taurus infrastructure. [Marin Tvrdić](https://www.linkedin.com/in/marintvrdic/?ref=blog.lido.fi), prominent Protocol Relations enthusiast and contributor that actively supports liquid staking technologies like the Lido protocol, said: “The Lido middleware integration with Taurus is combining the benefits of liquid staking with a banking-grade custody solution to help bridge the gap between DeFi and TradFi. This integration addresses issues of security and liquidity by ensuring assets are protected and easily accessible to make DeFi more appealing to everyone.” [Vassili Lavrov](https://www.linkedin.com/in/vassili-l-6724752b/?ref=blog.lido.fi), Head of Product at Taurus, said: “Liquid staking solves several pain points associated with Ethereum native staking, such as high barriers for investors and locked liquidity. We are pleased to integrate the Lido protocol, which is the leading software solution in the liquid staking space.” ### About Lido Institutional Lido is an open-source, liquid-staking middleware, that provides a simple and secure way to participate in the blockchain network validation process and earn rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. Users of the middleware can interact with various third-party DeFi applications that have independently integrated and support the liquid staking tokens. For further information, please visit [lido.fi/institutional](https://lido.fi/institutional/?ref=blog.lido.fi). ### About Taurus SA Taurus SA is a Swiss company founded in April 2018, that provides enterprise-grade digital asset infrastructure to issue, custody, and trade any digital assets: cryptocurrencies, tokenized assets, NFTs, and digital currencies. With more than 60% market share in Switzerland, it is also the European leader in the banking segment, entrusted by the full spectrum of financial institutions, including systemic banks, universal banks, online banks, crypto-banks, private banks, and broker-dealers. Taurus also operates a marketplace for private assets and tokenized securities. For further information, please visit [www.taurushq.com](https://www.taurushq.com/?ref=blog.lido.fi). --- *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### Simple DVT: Obol Testnet Results URL: https://blog.lido.fi/simpledvt-obol-testnet-results/ Last updated: 2026-06-04T08:55:29.000Z The Lido x Obol Simple DVT Testnet has officially ended, with the overall Lido x Obol validator set surpassing all of the minimum requirements to move forward to mainnet! This was the 3rd testnet allowing Node Operators to run validators utilizing the Lido protocol with Obol’s DVT solution, following [the first testnet in 2022](https://blog.lido.fi/dvt-pilot-with-obol-network/) and [second testnet in 2023](https://blog.lido.fi/lido-on-ethereum-obol-network-testing-v2/), and the first DVT testnet by any staking protocol to be held on the Holesky testnet. As described in the [Simple DVT Module Proposal](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625?ref=blog.lido.fi), participation in a Simple DVT testnet is a requirement for Node Operators seeking to participate in running validators using the Lido protocol via the Simple DVT Module on mainnet. **Operators (including solo stakers) interested in participating in the next Simple DVT Testnet can** [**sign up here**](https://forms.gle/WNuLdHiZ2nzZBfA87?ref=blog.lido.fi)**.** ## What is the Simple DVT Module? The Simple DVT Module (SDVTM) is expected to be the second mainnet Lido protocol module, slated (pending DAO vote) to be added in Q1’24\. The module is intended to battle test Obol and SSV Network based DVT on mainnet, while adding the first opportunity for solo and community stakers to run validators using the protocol. According to the proposal, the module would be initially capped at 0.5% of total Lido stake (with the option to be increased via DAO vote) and is expected to allow for the addition of over 250 net-new Node Operators to the protocol in the first six months post-launch. Importantly, the SDVTM is intended to be wound down within 3 years, during which time more scalable DVT modules with permissionless elements are expected to be added to the protocol. The “[Simple DVT Module Committee](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/23?ref=blog.lido.fi#simple-dvt-module-committee-4)” will be responsible for creating and executing [Easy Track](https://docs.lido.fi/guides/easy-track-guide/?ref=blog.lido.fi#motivation-behind-easy-track) motions specifically for Simple DVT that can create new clusters, activate and deactivate existing clusters, raise and lower cluster key limits, and change cluster manager and reward addresses. These processes will be executed via the [Easy Track optimistic governance process](https://docs.lido.fi/guides/easy-track-guide?ref=blog.lido.fi) with a 72 hour window for LDO holders to veto any motions made. Mainnet participants and clusters will be proposed to the DAO by the [Lido Node Operator Subgovernance Group](https://operatorportal.lido.fi/apply-to-be-a-lido-node-operator?ref=blog.lido.fi) (LNOSG), a sub-committee of the DAO made up of Lido on Ethereum and Lido on Polygon Node Operators, in addition to independent members of the staking community. The proposed participants and clusters will be posted to the Lido Research forums; if after a week there are no significant disagreements, the Simple DVT Module Committee will launch Easy Track motions to add the Node Operators to the Simple DVT Operator registry. To learn more about the SDVTM, read the [full proposal here](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/16?u=kimonsh&ref=blog.lido.fi). ## Obol Testing The Obol testing began in November 2023 on Holesky testnet, with a total of 214 Node Operator participants consisting of solo stakers, community stakers, and professional node operators. Participants were split into 32 clusters of 7 members (with a 5/7 threshold configuration) that in most cases attempted to match geographic regions and achieve diversity of underlying infrastructure type (e.g. home machines, bare metal in a data center, and public cloud). Each cluster also contained at least one Node Operator from the [Lido on Ethereum Curated set](https://operatorportal.lido.fi/lido-operators-database?ref=blog.lido.fi) to ensure one participant experienced with the processes required to run validators through the protocol was included in each cluster. Eight of the clusters were formed (or filled with a replacement) to test greater geographic diversity, with nodes run by participants from a combination of either Europe and the Americas or the Asia Pacific Region and Europe. Overall, participants ran nodes from 39 different countries, including participants in North & South America, Europe, the Middle East, Africa, Asia, and Australia (fingers crossed one day we will include Antarctica!). ![](https://lh7-us.googleusercontent.com/Cx9ta6g2lRVErEaB1WZv9_M6JKLiVXcMPMjaAvdXKvg-nGVm-fvBSImINDeEHJbwjAOp6Ew3mmMYVFfRLQpMwhY0eOqDBL_42nTa_onkUhg8z6ceXgD3Z8s99W233OAyMm8g8dkJuEkcE_Bx9gskyk0) Each cluster started the process by choosing a “Cluster Coordinator”, a participant that would be responsible for creating a Safe multi-sig and initializing the Distributed Key Generation (DKG) ceremony for each cluster. Each cluster’s SAFE also consisted of a 5/7 threshold, and represented their cluster in the Lido Node Operator registry on Holesky. Next, cluster participants each submitted and verified an “Individual Manager Address”, used for signing messages in the Safe and Obol cluster, and an optional “Individual Reward Address” that participants could choose to receive validator rewards to in lieu of their Individual Manager Address. Once completed, Cluster Coordinators created their respective cluster Safes and participants configured their nodes, generated 100 validator keys via DKG, and submitted the keys to the [Simple DVT Module on Holesky](https://docs.lido.fi/deployed-contracts/holesky?ref=blog.lido.fi#simple-dvt-module). Due to the early-stage nature of the Holesky testnet, MEV-Boost was not initially supported, requiring participants to directly connect to relays via their CL client. The relays used included the Eden Network relay, [Flashbots ](https://www.flashbots.net/?ref=blog.lido.fi)relay, and [Titan](https://docs.titanrelay.xyz/?ref=blog.lido.fi) relay. During this period, some participants were replaced due to technical difficulties or lack of activity, leading to the final number of 195 participants that would complete the trial. The testnet Simple DVT Module Committee raised key limits for each of the clusters over the course of a week to 5, and then began the initial monitoring period. After a week, attestation Effectiveness and Uptime results were promising (due to the large number of validators on Holesky, no trend was yet observed in the low number of block proposals) and validator key limits were raised to 50 for all clusters. During the next monitoring period, it was observed that while Attestation Effectiveness and Uptime continued to perform well above the benchmarks, the aggregate Block Proposal Success Rate was well below the required 70% minimum threshold, at \~ 54%. While some clusters had successfully submitted all possible block proposals, a significant number of clusters had missed the vast majority of slots, and in some cases missed all of them. At this point, the Obol team’s analysis of the missed proposals identified four main issues: 1. General NO misconfigurations (generally related to their beacon nodes); 2. Cluster latency; 3. Issues with Holesky MEV Boost relays, and; 4. Lack of a stable version for the MEV-Boost sidecar client on Holesky. Soon after this analysis, Flashbots added MEV-Boost support to Holesky, the Obol team deployed an upgraded Charon version, v0.18.0, and also began additional troubleshooting with the relay teams. A rapid improvement was observed in the aggregate Block Proposal Success Rate, with an improvement to 63% in less than a week. As this improvement was being observed, cluster key limits were raised from 50 to 100, for 30 of the 32 clusters. Two of the clusters, “Crimson Coyote” and “Glacial Gull” were among those with a 0% Block Proposal Success Rate. These clusters had both lost members due to inactivity during the course of testing, but were kept online to test potential performance impacts. Over the next weeks, the Glacial Gull cluster lost an additional member while another participant was having hardware issues, resulting in validator downtime. It was then determined that the validators should be exited by the remaining members and replacements filled to restart the cluster with a full 7 members. While the Crimson Coyote remained running in a 6/7 format, multiple participants had intermittent hardware issues, leading to sustained poor performance. For these reasons, these clusters were limited to a maximum of 50 active validators for the course of the trial. It is a clear takeaway that for the mainnet implementation, when a cluster member goes inactive, before any serious issues can occur the cluster’s validators should be exited and a replacement participant will take the place in a new cluster. Over the weeks following the Charon v0.18.0 upgrade the Block Proposal Success Rate continued to improve, and for the remaining 45 days of the test, the average aggregate Block Proposal Success Rate improved to 71.2%, surpassing the trial’s minimum requirement of 70%. As noted in the recent Simple DVT [update post on January 17](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/23?ref=blog.lido.fi), the Block Proposal Success Rate for the 7 days preceding the end of testing remained above 85% for 6/7 days. To conclude the testing, all of the validators were exited on January 22nd, and participants successfully completed claiming of rewards via the Simple DVT Reward Distribution process, as outlined in the [January 17 update post](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625/23?ref=blog.lido.fi#simple-dvt-reward-distribution-5). ## Performance Results & Learnings for Mainnet ![](https://lh7-us.googleusercontent.com/4ObxVyFSpyGV5c8O03pckQvlpwbhfElLazrBsUB4tSxbai1MQZMpt-t3LiDEINtFeizsoOCRtOOT2Cr97Qo2kZIPKtnKhxODF_kBzDGWulrMsO_j7968tA81LtKklMuzIyp9O6INGTQksLdQFEM1FVI) ### Aggregate Results As seen in the image above, the aggregate metrics for the Lido x Obol testnet surpassed all of the Minimum Testnet Success Characteristics outlined in the Simple DVT Module Proposal, with 97.93% Uptime, 84.53% Attestation Effectiveness, and a 71.17% Block Proposal Success Rate (all metrics per [Rated](https://www.rated.network/?network=holesky&view=nodeOperator&timeWindow=1d&page=1&ref=blog.lido.fi)). In addition, outside of Block Proposals, Obol cluster performance also surpassed the tracked aggregate average for the entire Holesky network. As a result, the Obol trial passed all requirements for Obol based DVT to move forward to the mainnet SDVTM. ### Cluster Results ![](https://lh7-us.googleusercontent.com/XyRnc0osoZPysQU_mgrK2Y0MIUfUohzQKDQK_pFRGBLVz_QMSMw-VOKSV0rPxcgmBTanH_pb2CZvmS_hVEMirDJM3IiYUFkwbVKmjOAw-3fZL-vNRqY4i43rtG3G8lM-9b6APfvZmAHKP_LlAe0qeeA) ![](https://lh7-us.googleusercontent.com/F6mIk7OxuTb7-239QLS0uqCFCneFtPT0N0qNQl72qiL5HUgRzUTa2yRNCRLQ23OkTia1n48ZLm6CxL2r0B5w3PA-SEnNzVMyo2lrdF77pCtRjCaSBQ4p4xupyuDaV-1Jt5SWovhaKrtrf7sXsqT6DL4) ![](https://lh7-us.googleusercontent.com/BiytnvKA0LPtt7oIsCm92lR-WZCjqCfWapyYaJcFfFzCeUeLCdNz3yvVI3w3JsRrDjyE6JknQLv1EjtQkgyoBDskacEyKfnmOxERCRNNTLSoK_k8TiSuaBoLNzkBLD-4aSPxFfq-EQpor9ehn5suiSw) ![](https://lh7-us.googleusercontent.com/ZyYXvEaahE-whzzfkCA2y5EWyC1IhUSNZrxlLzjlvu0MDGTJuSC9VVJ3ymmxVwHtQBu1SlfQLjyp4s_frVaPhhe-uUD6DkV1i9ofnuvHcvvtppqWnYzDKFrrjmWEydEuHgD7h8txlZu-gxLD7-uy-rE) At the cluster level, 18 of the 32 clusters surpassed the Minimum Block Proposal Success Rate benchmark of 70%, 9 finished with between 50% - 70%, and 5 finished with Block Proposal Success Rate lower than 50%. 29 of the clusters surpassed the minimum Uptime requirement, and 31 of the clusters surpassed the Avg. Attestation Effectiveness requirement. Upon [further investigation](https://blog.obol.tech/lido-simple-dvt-wave-1-testing-complete/?ref=blog.lido.fi) by the Obol team, four key factors were highlighted as reasons certain clusters underperformed: 1\. Latency, 2\. Hardware, 3\. Beacon Node, and 4\. MEV-Boost and Relays. #### Latency While most clusters were formed to maintain a non-extreme geographic distance (and therefore latency) between cluster participants, eight clusters contained a mixture of participants across continents in order to either test the impact on cluster performance or as a result of replacing a participant. Of these 8 clusters, 5 fell below at least one of the performance benchmarks. Additionally, of the 6 clusters containing only participants from the Asia Pacific region, only two surpassed the benchmark. Issues with latency were clearly observed in these clusters, likely due to the significant size of the region. For example, while the distance from Lisbon to Moscow is approximately 3,900 km, the distance between Seoul and Sydney is over 8,300 km. The results of this testnet have made clear that when Simple DVT is deployed on mainnet, an even greater focus must be placed on geographically tuning clusters. #### Hardware & Beacon Node In certain clusters with a higher number of solo and community staker participants, persistent hardware problems occurred throughout the trial. While there are a multitude of potential issues related to hardware, follow up surveys clearly show that many of those participants with issues were using low-performance VPS offerings, not running hardware with a sufficient number of CPUs, and in some cases using HDD storage. This caused numerous issues related to Beacon Nodes falling out of sync, especially as the number of active validators per cluster increased. As a result, participants moving forward to mainnet will have to confirm that their hardware specifications meet the minimum requirements [recommended by Obol](https://docs.obol.tech/docs/int/faq/general?ref=blog.lido.fi#what-are-the-hardware-requirements-for-running-a-charon-node) for mainnet. #### MEV-Boost & Relays Throughout the testnet, issues related to the early-stage of community infrastructure on Holesky were a challenge. Before the start of the testnet, MEV-Boost and publicly available MEV-relays from any of the major providers were not available on Holesky. Lido DAO and Obol contributors requested relay providers to stand up infrastructure for Holesky, and the teams from Eden Network, Flashbots, and Titan all graciously agreed to help support the testnet. While an alpha version of MEV-Boost was made available during the validator setup phase of the trial, it was determined to wait for a more stable release before connecting to the sidecar. As a result, participants directly configured relays to their beacon nodes for the first weeks that validators were online. While overall relay performance was suitable to start, certain issues expected in the normal course of testing were encountered. Exacerbating this, issues such as overbidding and suboptimal geographical relay placement for some clusters impacted performance. Following the Charon v0.18.0 upgrade, MEV-Boost was added to all of the participant’s nodes. The introduction of MEV-Boost added another set of challenges for some clusters that were already experiencing latency issues. [Per Obol’s analysis of the testing](https://blog.obol.tech/lido-simple-dvt-wave-1-testing-complete/?ref=blog.lido.fi), in 25% of cases, MEV-Boost related latency added over 2 seconds to the process while each node fetched the block header (vs. the \~ 4 second requirement for the entire process to be concluded for chain inclusion). Later in the trial, a mixed approach was taken where some clusters continued to use MEV-Boost and others went back to connecting to a single relay via the beacon node. While those directly connected generally showed superior performance, the benefits also must be weighed against the optionality MEV-Boost provides in [receiving bids from multiple relays](https://hackmd.io/No2SULzlSVytoWOJ2Wqa7g?view&ref=blog.lido.fi). While some of these issues are expected to be less of an issue on mainnet given the maturity and higher hardware investments by relay providers, a mixed approach between clusters utilizing MEV-Boost and relays connected to the beacon node will likely be taken as performance results are analyzed. Additionally, the Obol team was able to take advantage of the testing to come away with additional insights into the relationship between Obol DV nodes and MEV-Boost and relays, where continuing improvements to the Charon client will likely drive higher performance over time. Among other takeaways from the trial, it is clear that additional focus will be paid to improving the alerting resources for SDVTM participants. While Lido contributors have already made the [Ethereum-Validators-Monitoring](https://github.com/lidofinance/ethereum-validators-monitoring?ref=blog.lido.fi) dashboards open source, additional work is underway to help improve the alerting resources available to SDVTM participants. ### Participant Performance While specific participant performance will not be discussed in this blog post, there is an important point to note: participants in clusters that did not reach the minimum performance benchmarks are not automatically excluded from moving forward to mainnet. In many cases, these clusters contained a majority of Node Operators who were highly cooperative with their clusters, responsive to updates and testing requirements and whose nodes were performant. The LNOSG will meet in the coming weeks to examine the quantitative performance results of the trial at the aggregate, cluster, and participant level and will also have the opportunity to examine the qualitative metrics obtained via survey and notes from the trial from the Lido DAO and Obol contributors. Following their meeting, a forum post will be made on the Lido [research forums](https://research.lido.fi/?ref=blog.lido.fi) to propose the clusters and participants to move forward to mainnet in the first stage (and potentially for the second stage). Each participant will receive an email with individual feedback noting their status and inviting them to participate in the next testnet if they so choose. ## Path to Mainnet Following the posting of the LNOSG suggested list to the forums, the DAO will have one week to discuss the proposal and state any objections. If no objections arise, clusters will begin the coordination process and the Simple DVT Module Committee will commence Easy Track motions (which can be rejected by LDO token holders) to register the clusters on the Lido Simple DVT Module registry. In parallel, the SSV Network trial is currently underway and expected to be complete by the end of February or early March. Upon completion, a similar blog post will be shared with the community and an additional LNOSG process will follow for those participants. When the steps outlined above are completed (pending success of the SSV trial) and SSV clusters are added to the registry, the Simple DVT Module Committee will raise key limits for both Obol and SSV clusters to 5, and a 30 day monitoring period will begin. Following this monitoring period, performance will be shared with the DAO. If the results show strong performance, cluster key limits will be raised again and additional clusters will be added to the module. ## Future Simple DVT Testnets The next round of Simple DVT testnets are expected to commence in late March or early April. The requirements to participate are provable experience running an Obol node or SSV Operator. All solo stakers, community stakers, and professional node operators are invited to apply. Please [fill out this form](https://forms.gle/DDwzDQ5an91YLWvq9?ref=blog.lido.fi) if you are interested in participating. Depending on the number of participants that move forward from these two testnets, it is possible the module will reach stake capacity. If that is the case, a discussion and vote can be held for the DAO to consider raising the 0.5% of Lido stake limit. ## Other Notes A huge huge thank you is due to all of the community and ecosystem members that made this testnet possible. Without the support of the relay and MEV infrastructure teams from Eden Network, Flashbots, and Titan, the testing and takeaways from this testnet would not have been possible. Next, thanks go to the [Protofire](https://protofire.io/?ref=blog.lido.fi) team, who with the [support of LEGO](https://research.lido.fi/t/safe-ex-gnosis-safe-deployment-on-holesky/5726?u=kimonsh&ref=blog.lido.fi), deployed and maintained an instance of Safe on Holesky that was pivotal to the trial, and to [Rated](https://rated.network/?ref=blog.lido.fi), for setting up Holesky monitoring earlier than planned. Also, thank you to the Obol Labs team, who have continued to drive significant improvements to the Obol technology suite and for all of their diligent work assisting participants during the testnet. The results of this testing show that Obol based DVT is not only feasible, but will drive further decentralization across infrastructure, software, and geographies for Ethereum based validators. See [Obol’s analysis of the testnet here](https://blog.obol.tech/lido-simple-dvt-wave-1-testing-complete/?ref=blog.lido.fi). Finally, and most importantly, to all testnet participants: thank you for keeping your nodes running, going through multiple rounds of upgrades and changes, and especially for your enthusiasm in helping to drive the decentralization of the Ethereum network. ## Obol Testnet #3 Participants - **Cluster 1:** dgnatiuk, demrwr, HashKey Cloud, Nodera, Raccoon Nodes, Serenita, SuperJax - **Cluster 2:** Chainnodes, kobzar3830, PowerStaking, sodiumstar, Stakely, stellar\_the\_one, systemd - **Cluster 3:** \_bara\_kuda, Dappnode, Eridian, Piconbello, RockawayX, TRUPROCRYPTO - **Cluster 4:** Chainode Tech, DVStakersSpacesider, Kukis Global, kvqd777, MGTeam, minivipers, Valakas - **Cluster 5:** Cryptoria, Liquify LTD, narko2t1, natalia3647, Node3.Tech, RockLogic GmbH, SECARD - **Cluster 6:** 01node, Deutsche Telekom, Simply Staking, SpaceX, Thenop.io, TrustedAdvizer, vladislav7137 - **Cluster 7:** A41, Blockblaz(G11 tech labs pvt. ltd.), DVStakersSpacesider, Kunyoung Kim - IT Times.com, Lefey, StakeWithUs - **Cluster 8:** anvel, H2O Nodes, Metanull, ramza107, SenseiNode, Sub7 Security, Web3DAO - **Cluster 9:** Barracuda, Everstake, GraphOps, nodeproxyz, Power Intelligence, Republic Crypto, yura\_zp - **Cluster 10:** Blockscape, Cosmostation, dimsome, Everlasting Global, nodeADDICT, testnet.cn, thucnguyen#8149 - **Cluster 11:** Allnodes, amarkelov, Dappnode, knightsemplar, natalia\_256, TdrSys, Yutu - **Cluster 12:** BeeHive, Cryptology, Eridian, jayjay, LinkPool, Nethermind, VanGogh - **Cluster 13:** CryptoManufaktur, farukyasar, F5 Nodes, Las01, LIVE.NODE, maxim\_101, Node Guardians - **Cluster 14:** Cryptology, Finoa, Nokey, nodeskuge, noxuspace, Stakin, TRUPROCRYPTO - **Cluster 15:** BeeHive, Chainlayer, deNodes, katesizova, Tesla, testovich, val4n17 - **Cluster 16:** Chainlayer, ContributionDAO, Lavender.Five Nodes, Pier Two, RockX, Starnodes, Validation Cloud - **Cluster 17:** DSRV, goldstream777, Infinite Lux Staking, MGTeam, Power Intelligence, rrrmmmmm, Spectrum Staking - **Cluster 18:** Launchnodes, mahof, Metanull, Piconbello, SenseiNode, Staking4All, Steaking Frens, UniqNodes, Web3DAO - **Cluster 19:** alkadelta, Konstantin#1194, P2P.org, PhiNodes, Starnodes, Светлана1969#2890, yellowbee#7307 - **Cluster 20:** 🅰🅻🅴🆇ⒾⓉ, antonduzhenko, Infstones, Nodes.Guru, Range, systemd, Weaitonamazerid - **Cluster 21:** AntNodes, Conqueror, Highnok, LIVE.NODE, Mahof, P-OPS Team, Staking Facilities - **Cluster 22:** Ebunker, GoldenTrust, Imperator.co, KingSuper, RockX, Validation Cloud, Youngha Kim - IT Times.com - **Cluster 23:** 01Node, Cryptofisher, Investernco, Kukis Global, Liquify LTD., Pacobits, Polkachu - **Cluster 24:** HashKey Cloud, HellmanResearch, Investernco, kobya4evo, Luck#7063, NodeInfra - **Cluster 25:** GlobalStake, Investernco, irina#7966, lcofjurn, NakoTurk, RockawayX, StakingCabin - **Cluster 26:** Applepai, ChainOps, Coinstamp, CryptoManufaktur, CVJoint, H2O Nodes, rodion007#5553 - **Cluster 27:** Astronodes, Colinka | BeeHive,DMITRY | SCANDALIST, DragonStake, lesya, Simply Staking, Swiss Staking - **Cluster 28:** Blockpower, Crouton Digital, daniilkir, Eridian, iicc1, SNC.xyz, Stakin - **Cluster 29:** A41, Cat6, Chainbase, Forbole, Luganodes, StakeWithUs - **Cluster 30:** Anonstake, archimedes0159, cryptozab, D-Stake, guglez, igorzp60, P2P.org - **Cluster 31:** 1to, Andrei0707#1159, Blackb0x, Bware Labs, Cosmostation, DSRV, OranG3cluB - **Cluster 32:** Di-nodes, goooodnes, Metanull, SenseiNode, SpaceX, tungnguyen.zk ### Lido On Linea URL: https://blog.lido.fi/wsteth-goes-to-linea/ Last updated: 2024-09-12T07:43:27.000Z ### Lido’s staked ETH is now available on Linea. In collaboration with Lido DAO contributors and as part of its commitment to advancing the Ethereum ecosystem, staked ETH has now made its way to [Linea](https://linea.build/?ref=blog.lido.fi). Linea opens new avenues for DeFi enthusiasts to leverage the benefits of wstETH within its thriving ecosystem. ➡️ To bridge your wstETH to Linea: [bridge.linea.build](https://bridge.linea.build/?ref=blog.lido.fi) ➡️ For tutorials & instructions: [help.lido.fi/en/articles/8804728-bridging-wsteth-to-linea](https://help.lido.fi/en/articles/8804728-bridging-wsteth-to-linea?ref=blog.lido.fi) ### What is Linea? Linea stands as a leading zk-rollup on Ethereum, offering EVM equivalence, scalability, and reduced transaction costs while preserving Ethereum’s security guarantees through zero-knowledge proofs. Boasting consistent growth in Total Value Locked (TVL) and supported protocols, Linea has become a primary network in MetaMask and a **key infrastructure provider for the Lido middleware solution.** Recognizing the pivotal role of stETH in the Ethereum ecosystem with a market capitalization of currently $23B and over 330,000 holders, Linea integrates wstETH to meet the growing demand within the Ethereum community. This move aims to provide enhanced user experiences, foster greater adoption, and increase the utility of wstETH on Linea. ### Bridging to Linea To bridge your wstETH to Linea, simply follow these four easy steps. 1. **Select Bridge:** Visit Linea's [website](https://bridge.linea.build/?ref=blog.lido.fi) and choose betweenit's recommended MetaMask bridge and other third-party bridges. 2. **Connect your wallet:** Once you have selected your bridge of choice, connect your wallet. 3. **Select wstETH:** Choose the desired amount of wstETH to bridge to Linea. 4. **Approve and Confirm:** Complete the bridging transaction, which typically takes about 15 minutes. [![](https://blog.lido.fi/content/images/2024/01/Screenshot-2024-01-27-at-11.32.09.png)](https://bridge.linea.build/?ref=blog.lido.fi) Following this bridging transaction, your wstETH will be available on Linea. In case of issues or questions, refer to the [Linea bridging guide](https://help.lido.fi/en/articles/8804728-bridging-wsteth-to-linea?ref=blog.lido.fi). ### What’s Next? The integration of Lido’s wstETH on Linea brings forth exciting opportunities for users within our ecosystem. In the coming weeks, Linea users can expect to explore wstETH across various applications, including collateral, lending, farming, indexing, and more. This collaboration represents a significant stride towards unifying the Ethereum ecosystem, providing stability, and expanding the options available to users in the Layer 2 space. ### Resources - [Linea Website](https://linea.build/?ref=blog.lido.fi) - [Linea Bridges](https://bridge.linea.build/?ref=blog.lido.fi) - [Forum: wstETH Deployment on Linea](https://research.lido.fi/t/wsteth-on-linea-ownership-acceptance-by-lido-dao/5961?ref=blog.lido.fi) - [Snapshot](https://snapshot.org/?ref=blog.lido.fi#/linea-build.eth) ### Lido Community Staking: Bonding URL: https://blog.lido.fi/community-staking-module-bonding/ Last updated: 2024-02-26T14:42:31.000Z The second blog of a four-part explanatory series about [Lido Community Staking Module (CSM)](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi), will dive into its bonding mechanism. Check out the rest of the parts of the series below: - #1: [Overview of Community Staking Module (CSM)](https://blog.lido.fi/lido-community-staking-an-overview/) - #2: [Bonding](https://blog.lido.fi/community-staking-module-bonding/) - #3: [Rewards & Penalties](https://blog.lido.fi/community-staking-module-rewards-penalties/) - #4: [Stake allocation & Validator Exits](https://blog.lido.fi/lido-community-staking-allocation-exits/) # Why Bonding? A bonding mechanism was proposed to be utilized in CSM to facilitate permissionless onboarding of independent Node Operators. Taking into account the staking landscape, bonding has proven effective in: - Onboarding numerous independent Node Operators in a permissionless manner; - Allowing for the creation of mechanisms that would compensate stakers in the possibility of inappropriate or malicious actions by Node Operators; - Increasing economic alignment between Node Operators and stakers. # Only ETH (stETH) as Bond Token ETH will be the only token required for bonding, with no additional tokens needed. The requirement of secondary bonding assets is unacceptable for some Node Operators, especially ETH maximalists since they would prefer to not have exposure to assets which may fluctuate in value compared to ETH. Furthermore, using ETH as a sole bond token keeps straightforward logic of collateral and possible implications it is intended to cover, existing in ETH only. It is proposed to stake the bonded ETH instead of locking it in the contract as an unproductive asset, so Node Operators would gain the staking rewards once they deposit the bonds. ![](https://lh7-us.googleusercontent.com/rfO-klKJovTLuqXNo8OynA1g3NZK8IIPbugd5mO_eXeMgxud-M--4hyJw0evftQuw_Ucjz2FABRVfyqkbu1XCNceqxmjS2-NRVTIMWZ5HCMFYLHIze6EIgUL_ARsDyyKViSXw0Ft6Q0V7ocU5XFq-yk) # Bond as a Coverage It has been proposed that bonds be utilized as cover in the scenarios when Node Operators intentionally or accidentally negatively impact staking rewards. The following specific cases are considered: - Validator balance after exiting is lower than the default MEB (i.e. 32 ETH, but it might be changed with [EIP-7251](https://github.com/ethereum/EIPs/pull/7251?ref=blog.lido.fi)); - MEV stealing; ![](https://lh7-us.googleusercontent.com/cvh7eSWmVWxrL8SSYmrUjs9BKBLldiJazcx95iFUuD7S_8QQzdUYZ4EBk9XUgiaHoMqc6e7ss6zELuFeYtXD4whiHsqa3ARjPvwv3Efb2FwiDypAuKFy_8E9VyRJvdvZcRw2nT-sJEmNmobdwO0Q_20) It cannot be 100% guaranteed that the bond is sufficient to cover all possible losses, especially if malicious actors were to steal a huge amount of MEV. To significantly reduce the risk of uncovered losses, CSM will introduce a unique bonding mechanism that associates bonds with the Node Operator instead of the individual validator. This means the aggregate total of bonds provided by an operator that runs multiple validators could cover the losses caused by any of its validators. Another important feature of the proposed model is *non-linear bonding,* useful for reducing the appeal of Sybil attacks (i.e. an entity controls multiple Node Operators, each with at least a validator). It allows Node Operators to operate more than one validator with bond requirements that decrease based on how many validators have been registered with the NO address. [Ongoing research](https://research.lido.fi/t/risk-assessment-for-community-staking/5502/3?ref=blog.lido.fi) indicates that gradual bond reduction can discourage Sybilling and EL stealing. Furthermore, it lowers entry barriers for those who want to run more validators. # Bond Size Considerations The figures for bond size and non-linear bonding curve have not been decided yet. These will be voted on by the DAO sometime before mainnet release, taking into account the latest changes in factors such as technical validator risks and Ethereum updates. At present, according to [a recent risk assessment analysis](https://research.lido.fi/t/risk-assessment-for-community-staking/5502?ref=blog.lido.fi), a **4 ETH** bond is sufficient to cover possible losses and most missed profits in a modelled realistic scenario, and a **2 ETH** bond is sufficient to cover all direct losses (CL penalties) in the same realistic scenario. In addition, a competitive bond size (i.e. 4 ETH or even less) should be applied to further lower the entry barrier to run a validator and to be more profitable for Node Operators than vanilla solo staking or other staking services. Lido contributors [in the analysis](https://research.lido.fi/t/bond-and-staking-fee-napkin-math/5999?ref=blog.lido.fi) introduced two metrics (i.e. “rewarded capital” and “rewarded capital multiplier”) to easily compare capital efficiency of bond provision among different protocols. # What’s Next? After the introduction of CSM’s bonding design, the next post will discuss the innovative design of reward measurement and distribution, as well as penalties. Stay tuned! # Resources - [Community staking module proposal](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi) - [Community staking landscape](https://hackmd.io/@lido/Byp775Ay6?ref=blog.lido.fi#Partnerships) - [Risk assessment for community staking](https://research.lido.fi/t/risk-assessment-for-community-staking/5502?ref=blog.lido.fi) - [Bond and staking fee “napkin math”](https://research.lido.fi/t/bond-and-staking-fee-napkin-math/5999?ref=blog.lido.fi) ### Lido Community Staking: Overview URL: https://blog.lido.fi/lido-community-staking-an-overview/ Last updated: 2024-05-30T15:57:00.000Z On [December 15th](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xa39815519107002997769f0b79a9e3957c3bf793166ab948fc6413ce5b3def55), the Lido DAO gave the green light for the development of [Community Staking Module](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi) (CSM), paving the way for community stakers to utilize the Lido protocol to run validators in a permissionless manner. To assist the community in understanding the workings of the CSM, a series of four explanatory blog posts will be published, covering: - #1: [Overview of Community Staking Module (CSM)](https://blog.lido.fi/lido-community-staking-an-overview/) - #2: [Bonding](https://blog.lido.fi/community-staking-module-bonding/) - #3: [Rewards & Penalties](https://blog.lido.fi/community-staking-module-rewards-penalties/) - #4: [Stake allocation & Validator Exits](https://blog.lido.fi/lido-community-staking-allocation-exits/) # What is Community Staking Module (CSM)? The term “community stakers” has been widely used throughout the Lido forums to refer to independent individuals (e.g. solo stakers) or groups running Ethereum validators. Community Staking Module (CSM) will most likely be the third Lido on Ethereum module after the [Curated Module](https://docs.lido.fi/contracts/node-operators-registry?ref=blog.lido.fi) and [Simple DVT](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625?ref=blog.lido.fi), and the first to offer permissionless entry allowing community stakers to operate validators by providing an ETH-based bond. ![](https://lh7-us.googleusercontent.com/JE4mqzVIdzFquv5Cp4Mxcj36sELqs6913cOJ699lNDqTAVG5aV3zLnSFoV7S8JrTqdQxRCxY_9kFAsF8XUVjYnjUELG9qd5eM2zlumwpFK22Iyjb6RE6lXosT-edR37G3W4aw03gtI1_1W0Nw1P-7m4) ### 1\. Goals To narrow the initial [goals](https://research.lido.fi/t/lido-on-ethereum-community-validation-manifesto/3331?ref=blog.lido.fi#in-order-to-embody-these-principles-lido-needs-to-achieve-the-following-goals-5) from the [Lido Community Staking Manifesto](https://research.lido.fi/t/lido-on-ethereum-community-validation-manifesto/3331?ref=blog.lido.fi) and form more practical applications, the following CSM goals were accepted: - Allow for permissionless entry to the Lido on Ethereum Node Operator set and enfranchise solo-staker participation in the protocol; - Increase the total number of independent Lido on Ethereum Node Operators to 300+ independent Node Operators within months of mainnet launch. ### 2\. Key Features To make CSM more attractive to the community stakers, the following features were introduced: - EL rewards and MEV are smoothened with the other modules (e.g. the Curated Module) so CSM Node Operators could potentially gain more stable rewards that are closer to the average MEV ones; - A reasonably low bond is targeted for Node Operators so it can cover more prospective operators; - ETH (stETH) is the only token for bond and rewards without any involvement of other assets; - Node Operators are provided with more friendly UX and pay less gas fees for on-chain operations; - Node Operators are supposed to gain more rewards than vanilla solo staking; # Why Community Staking Module? Lido started with a mission to keep Ethereum decentralized and to democratize access to staking. Currently Lido has only one Node Operator module, which is DAO-curated and consists of [37 professional staking providers](https://operators.lido.fi/?ref=blog.lido.fi). In an effort to enhance the protocol’s decentralization by incorporating a broader range of operators, the Lido DAO approved the development of a module that allows for permissionless Node Operator entry. ![](https://lh7-us.googleusercontent.com/utSmeLTy8KI7fOd9sOuBcNfi8I3M5wljmxqPr9jBnI-uJoo1Ltu5hFxjX13iRGxw3T6pOg3c07kbkLWkiu1OtcCpjnQwSseVAM-reJtS9tTVNQyrL3_9a2w3brMZVUK9p9mO64r4f5eRzQYCglIPbGg) In light of two upcoming Ethereum features estimated to be released in the near future, it is more feasible for the protocol to sustainably accommodate permissionless access. Namely, [EIP-4788](https://eips.ethereum.org/EIPS/eip-4788?ref=blog.lido.fi) will allow Lido smart contracts to fetch data (e.g. validator balances) in a trust-minimised way, and [EIP-7002](https://eips.ethereum.org/EIPS/eip-7002?ref=blog.lido.fi) will allow Lido for on-chain exit of malfeasant protocol validators through the protocol’s validator withdrawal credentials. A variety of mechanisms, including bonding, reputation & DVT could be employed to cultivate a more diverse operator base. At this juncture, CSM was proposed to adopt a bond-based design since it has proven to be a great approach to validator set formation. A bond can be used as cover for inappropriate actions (e.g. validators’ offline, slashing, or MEV stealing) and as an alignment mechanism between Node Operators and stakers. ## Potential Partnerships Community participation in either running validators or building tools is a key step for a successful permissionless module, so the Lido CS team contributors are eager to [establish partnerships and collaboration](https://research.lido.fi/t/request-for-proposal-csm-and-sdvtm-integration/6225?ref=blog.lido.fi) with the Ethereum ecosystem for tooling development that could facilitate the use of the CSM. Some notable examples of such tools include [DappNode](https://dappnode.com/?ref=blog.lido.fi), [Avado](https://ava.do/?ref=blog.lido.fi), [Stereum](https://stereum.net/?ref=blog.lido.fi), [Sedge](https://docs.sedge.nethermind.io/docs/intro?ref=blog.lido.fi), and [eth-docker](https://eth-docker.net/?ref=blog.lido.fi). If you have any ideas, please reach out in the [research forum](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi). ## What’s Next? Since the vote has passed, the DAO agreed on the proposed timeline below. Holesky testnet deployment for CSM is assumed to happen in Q2-Q3 2024\. Furthermore, the mainnet release was scheduled in Q3-Q4 2024, assuming there are no significant obstacles or implementation issues. ![](https://lh7-us.googleusercontent.com/3lZD16FL_bGcBiM12Vrx2QKjCVeBjZ1V0kQipzdqMptI6Q0l36wGEVirJuq5fHnQ8kROqc9YXc8tziPQMdytWADINUYDT3Tr1S5NQBA5G6AfUXNGPo_UTZN90TZIFgpNCK8juRWkZPx32aDOffcgzjA) ### Additional Resources - [Community Staking Module Proposal](https://research.lido.fi/t/community-staking-module/5917?ref=blog.lido.fi) - [Community Staking Landscape](https://hackmd.io/@lido/Byp775Ay6?ref=blog.lido.fi) - [Request for Proposal | CSM and SDVTM integration](https://research.lido.fi/t/request-for-proposal-csm-and-sdvtm-integration/6225?ref=blog.lido.fi) ### Institutional Grade Liquid Staking With Hashnote and Lido URL: https://blog.lido.fi/institutional-grade-liquid-staking-with-hashnote-and-lido/ Last updated: 2025-05-28T14:54:04.000Z ### Hashnote chooses Lido Middleware as a software technology behind its new offering Hashnote has selected to integrate the Lido Middleware for its Institutional stETH Fund. Liquid staking solutions that integrate the Lido Middleware allow users to have immediate liquidity on their staked ETH through a self-minted stETH liquid staking token all while they participate in the blockchain network consensus. You can learn more about how Hashnote has integrated the middleware solution here: [hashnote.com](https://www.hashnote.com/?ref=blog.lido.fi) --- ### What is Lido Lido is an open-source, liquid-staking middleware, that provides a simple and secure way to participate in the blockchain network validation process and earn rewards for this activity. With a mission to democratize staking, Lido middleware lets users connect with node operators and stake their digital assets without the need to individually maintain hardware. Users of the middleware can interact with various third-party DeFi applications that have independently integrated and support the liquid staking tokens. *Disclaimer: All information provided herein is purely for informational purposes and does not constitute an offer, recommendation or solicitation to participate in any activity involving crypto assets. References within this website to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring in any form or shape. Any decision to participate should be based solely on your own due diligence and should be made only after consulting with your own legal, financial, and tax advisors.* ### LidoConnect 2023 Recap URL: https://blog.lido.fi/lidoconnect-2023-recap/ Last updated: 2023-11-23T13:49:43.000Z LidoConnect was an amazing day of staking-focused learnings in Istanbul 🇹🇷 As an extension of DevConnect, LidoConnect featured a series of curated talks, panels and workshops which form the foundation and future of the Ethereum staking ecosystem. Designed to ignite curiosity, raise interesting questions and turn viewers and participants into dedicated explorers of the liquid staking ecosystem. Thank you all for an amazing event - see you at LidoConnect 2024 🏝️ ## LidoConnect - Full Event Stream Check out the full stream below including all the exciting talks and panels. Find the full agenda below the stream 🎥 ### Agenda - 15:00 - **Welcome speech** 👋 - 15:05 - [**Talk:** **Lido - The Road So Far** ](https://youtu.be/tSNQK5jaPe0?ref=blog.lido.fi)(Isidoros Passadis, Lido) - 15:30 - **[Talk: A set-theoretic view of Ethereum coteries](https://youtu.be/%5FtXoe%5FRhRAE?ref=blog.lido.fi)** (Michael Neuder, Ethereum Foundation) - 15:50 - [**Talk**: **Dual Governance at Lido**](https://youtu.be/zrA6VQgh3bk?ref=blog.lido.fi) (Sam Kozin, Lido) - 15:50 - **[Workshop: Setting up a DVT Validator](https://www.youtube.com/watch?v=BCftzsU-FXo&ref=blog.lido.fi)** (Eridian) - 16:10 - **[Panel: Why do you keep destroying yourself?](https://youtu.be/zX7AmVPQ0ew?ref=blog.lido.fi)** (Kadmil, Rune Christensen, Sam Kozin, Charlie Feng) - 17:20 - [**Talk**: **Proposed changes to Ethereum staking mechanisms**](https://youtu.be/gtgCMRHlVTw?ref=blog.lido.fi) (Vasiliy, Lido) - 17:40 - **[Panel: What makes for better money, ETH or LSTs?](https://youtu.be/2%5FlmNXGdkHY?ref=blog.lido.fi)** (Marin, Justin Drake, Tarun Chitra, Konstantin Lomashuk) - 18:20 - **[Presentation: Lido Community Staking Module](https://youtu.be/eJFIwq89uxA?ref=blog.lido.fi)** (Dmitry Gusakov, Lido) - 18:30 - **[Panel: When you trust no one but two of three...](https://youtu.be/O3fad3DAuFQ?ref=blog.lido.fi)** (Max Merkulov, Zahary Karadiov, John Guibas, Misha Komarov, Alex Potapkin) - 19:00 - **[Afterparty](https://youtu.be/8-60s5br6Bw?ref=blog.lido.fi)** 🍸 ## LidoConnect - Gallery Missed LidoConnect? Face your FOMO head on below... 📸 ### Leveraging Distributed Validator Technology (DVT) with Simple DVT URL: https://blog.lido.fi/leveraging-distributed-validator-technology/ Last updated: 2023-11-15T12:39:28.000Z On October 26th, 2023, the Lido DAO voted on the deployment of a [Simple DVT Module](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625?ref=blog.lido.fi), a proposal that could play the first step in significantly diversifying the Lido Node Operator set and drive future innovation within the Ethereum staking ecosystem. In the previously linked research forum lies great discussion and debate with much deeper insight into what DVT could do for Lido DAO and beyond. In this article we’ll take a more broad overview into what Simple DVT is, why it’s promising and how it all works. ## What is Distributed Validator Technology (DVT)? In its essence, distributed validator technology functions as a system that operates similarly to a multisig setup for running a validator. Rather than relying on a single node operator, DVT relies on multiple node operators, each managing distinct nodes that communicate and collectively reach consensus to fulfil validator responsibilities. ![](https://blog.lido.fi/content/images/2023/11/smpl-whatis.png) The benefits of DVT are substantial. It enhances validator resilience, mitigating single points of failure through active:active redundancy, mitigating risks of validator downtime. It also promotes decentralization in various aspects, including across infrastructure, geographical distribution, and client diversity. Additionally, DVT enhances security by using Distributed Key Generation (DKG), adding an extra layer of protection against potential threats. One significant development in the world of DVT is the proposed introduction of the Simple DVT Module within the Lido protocol. This module is designed to make using validators through the Lido protocol more accessible to a wider audience by utilizing DVT. It leverages the established design of the Curated Operator Module and will utilize DVT solutions provided by two leading providers, Obol Network and SSV Network. Furthermore, this module builds upon the experience gained during the 2nd and upcoming 3rd DVT testnet trials, helping to ensure a well-optimized deployment. The participants in this initiative represent a diverse range of stakeholders. From individual and community stakers to professional node operators and curated node operators, the Simple DVT Module aims to involve anyone interested in the evolution of decentralized blockchain validation. ## Why Simple DVT? The fastest route to enhancing Lido protocol's decentralization and security lies in adopting DVT. By accommodating a more extensive range of Node Operators, this technology significantly amplifies the network's decentralization, distribution, and resilience. DVT's flexibility allows for the use of various hardware setups, diverse client implementations (like EL and CL clients), and wider geographical distribution. ![](https://blog.lido.fi/content/images/2023/11/smpl-why-1.png) With the proposed introduction of the Simple DVT Module, the stage is set to put Obol and SSV's DVT solutions to the test on mainnet. This practical trial will serve as a critical demonstration of the performance and resilience benefits of DVT in a real-world environment, helping to lay the foundation for its expanded adoption within the Lido protocol with the potential for more permissionless onboarding. What does DVT mean for Node Operators? The Simple DVT Module opens doors for solo stakers, community stakers, existing node operators, and other staking organizations. It invites them to participate in the upcoming third and fourth Lido DVT testnets. Following rigorous performance assessments, the Lido Node Operator Subgovernance Group (LNOSG) will propose clusters for mainnet deployment, leading to a richer diversity of validators. ## A Phased Approach Initially, a limited number of clusters will operate, and the number of validators per cluster will be modest. This cautious approach allows the DAO and LNOSG to monitor performance and its impact. In the case that this proves successful, more clusters and validators can join the mainnet. The next phase, expected to unfold after three months of mainnet performance on par with the broader operator set, may witness the LNOSG proposing an increase in the number of validators per cluster to more meaningful levels. ## The Economics Behind DVT To encourage Node Operator participation and support DVT providers, the Simple DVT Module proposes a 2% treasury fee and an 8% module fee ([as described in the Lido Staking Router technical docs](https://docs.lido.fi/contracts/staking-router?ref=blog.lido.fi#registering-a-module)), shared between Node Operators and DVT providers. This economic model acknowledges the unique challenges of running a small number of validators and aims to sustain DVT technology development. ![](https://blog.lido.fi/content/images/2023/11/smpl-eco-1.png) ## Mitigating Risks with Simple DVT The proposal offered two risk mitigation options for DAO consideration. The first option proposed using the existing cover fund to mitigate stETH staker losses in case of unusual events. The second option suggested opening an RFP process to source third-party cover providers. ![](https://blog.lido.fi/content/images/2023/11/smpl-migration.png) The DAO decided to use [option one and self cover](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625?u=unitetheclans&ref=blog.lido.fi). The reasoning from research is as follows: > *Per* [*research from the Lido Analytics Contributor Workstream 4*](https://www.youtube.com/watch?v=feVy1JmvB%5Fw&ref=blog.lido.fi) *and as an example assuming 1400 validators (70 clusters running 20 validators each), the cover fund currently holds more than enough stETH to compensate for potential losses under most conservatively realistic scenarios, even assuming intentional malicious behavior of all participating NOs: (i.e. no more than 4 ETH loss per Validator, assuming no correlation penalty and triggerable exits implemented within the next year).* ## Simple DVT: What's Next? With Simple DVT Module approved, it will serve as a temporary module, operating initially at 0.5% of Lido stake, with potential for expansion through DAO votes. It is not intended to operate indefinitely, but rather to pave the way for more sophisticated DVT modules that could allow for elements of permissionless onboarding. ![](https://blog.lido.fi/content/images/2023/11/smpl-plan.png) The proposal also grants the Simple DVT Module Committee the authority to execute Easy Track governance motions, efficiently facilitating cluster operations, while still allowing LDO holder input. This critical step in the adoption of DVT technology is a testament to Lido's commitment to decentralization, accessibility, and innovation. As the Ethereum ecosystem evolves, the Lido DAO is poised to lead the way, promoting the democratization of staking while keeping Ethereum secure and decentralized. This is a defining moment in the journey towards a more robust and diverse Ethereum validator set. ## Simple DVT: Resources - [Staking Router Module Proposal - Simple DVT](https://research.lido.fi/t/staking-router-module-proposal-simple-dvt/5625?ref=blog.lido.fi) - [What is Simple DVT? - NOCC Short #11 with Will Shannon](https://www.youtube.com/watch?v=SHCAJaZ1Bgs&ref=blog.lido.fi) - [Obol Network ](https://obol.tech/?ref=blog.lido.fi) - [SSV Network](https://ssv.network/?ref=blog.lido.fi) ### Lido On Base URL: https://blog.lido.fi/lido-goes-to-base/ Last updated: 2024-09-12T07:43:59.000Z ### wstETH is now available throughout the Base ecosystem 🔵 Today, Lido DAO contributors are pleased to present the launch of [wstETH](https://help.lido.fi/en/articles/6579518-what-is-wsteth?ref=blog.lido.fi) on Base. Led by [KyberSwap](https://kyberswap.com/?ref=blog.lido.fi), [Beefy](https://beefy.com/?ref=blog.lido.fi) and [Superbridge](https://superbridge.app/?ref=blog.lido.fi), the availability of the wstETH Base bridge opens up the benefits of staked ETH to the [Base ecosystem](https://base.org/ecosystem?ref=blog.lido.fi), further enhancing Ethereum liquidity and stability. The availability of wstETH to Base builds upon successful earlier launches across Arbitrum, Optimism, Polygon and Cosmos. Since its launch in August, Base has cemented itself as one the leading Ethereum L2s with impressive user growth, unique applications and a vibrant developer community. With the availability of wstETH to Base, users of Base will now be able to use their staked ETH across the growing Base DeFi ecosystem, whilst protocols on Base will be able to integrate wstETH to further enhance liquidity and usability. **➡️ To bridge your wstETH to Base:** [**superbridge.app/base**](https://superbridge.app/base?ref=blog.lido.fi) **➡️ For tutorials & instructions:** [**help.lido.fi**](https://help.lido.fi/en/articles/8545365-bridging-wsteth-to-base?ref=blog.lido.fi) ### The Role of wstETH Across Base The wstETH Base bridge brings the multiple benefits of Lido’s staked ETH to users and protocols of Base, further growing the usability of Ethereum L2s. In the beginning, Base users can look forward to interacting with wstETH across dApps like [KyberSwap](https://kyberswap.com/?ref=blog.lido.fi), [Beefy](https://beefy.com/?ref=blog.lido.fi) and [Aerodrome](https://aerodrome.finance/?ref=blog.lido.fi). In the near future, users can expect wstETH to be made available across many more growing protocols. Stay tuned 👀 ### Bridging wstETH to Base: Step by Step The process for bridging to Base is as simple as can be. 1. First, head to the [Superbridge App](https://superbridge.app/?ref=blog.lido.fi) and choose 'Base'. 2. Connect your wallet and choose ‘*wstETH*’. 3. Choose the amount of wstETH you want to bridge to Base and approve the use of your tokens for the bridging. 4. Once confirmed, sign the transaction and wait a few minutes. Easy peasy - your wstETH is now on Base 🔵 For a more in-depth guide, visit '[Bridging wstETH To Base](https://help.lido.fi/en/articles/8545365-bridging-wsteth-to-base?ref=blog.lido.fi)'. Superbridge is the DAO-supported UI for bridging wstETH on Base using a native bridge. wstETH will also become available on the [Base Bridge](https://bridge.base.org/deposit?ref=blog.lido.fi) in the upcoming weeks. Keep in mind that you must wrap your staked ETH to wstETH prior to bridging. To do that, head to [stake.lido.fi/wrap](https://stake.lido.fi/wrap?ref=blog.lido.fi). ### What is Lido's wstETH? Lido's wstETH is a wrapped version of [stETH](https://help.lido.fi/en/articles/5230610-what-is-steth?ref=blog.lido.fi) optimised for DeFi interoperability. Unlike with stETH - where your balance changes daily as staking rewards come in - wstETH is non-rebasing and keeps your balance fixed. Instead, wstETH uses a share system to reflect earned staking rewards. Holding wstETH earns you the same staking rewards as when holding stETH, but rewards will only be realised when you choose to unwrap your wstETH back to stETH. ![](https://blog.lido.fi/content/images/2023/11/Screenshot-2023-11-08-at-13.14.39.png) Learn more about wstETH here: [stake.lido.fi/wrap](https://stake.lido.fi/wrap?ref=blog.lido.fi). ### What’s Next? More than just a bridge, wstETH on Base marks an important step in improving the DeFi ecosystem on Base and further increasing the use of wstETH across Ethereum L2s. Keep an eye out for upcoming announcements as wstETH becomes an integral part of the Base ecosystem. ### Lido On Solana Sunset URL: https://blog.lido.fi/sunset-lido-on-solana/ Last updated: 2024-02-02T12:38:25.000Z Over the coming months, [Lido on Solana](https://solana.lido.fi/?ref=blog.lido.fi) will be effectively discontinued. After extensive [DAO forum discussion](https://research.lido.fi/t/lido-on-solana-funding-proposal/5371?ref=blog.lido.fi) followed by [community vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x37c958cfa873f6b2859b280bc4165fbdf15b1141b62844712af3338d5893c6c8), the sunsetting of the Lido on Solana protocol was approved by Lido token holders and the process will begin shortly. Below you will find a breakdown of the justification for the sunsetting, as well as key timelines and required actions for node operators and stSOL token holders. ## Sunsetting Justification The Lido on Solana sunsetting comes after a[ proposal](https://research.lido.fi/t/lido-on-solana-funding-proposal/5371?ref=blog.lido.fi) was put forth to the Lido DAO by P2P Validator (the Lido on Solana development team), outlining the achievements, challenges, and future prospects of Lido on Solana. The P2P team, which has been contributing to the Lido DAO and developing Lido on Solana since March 2022, presented the Lido DAO with two scenarios: 1. Continue development on Lido on Solana with financial backing from the Lido DAO. 2. Sunset Lido on Solana. After much discussion and a vote by Lido DAO members, it was decided that the best course of action would be to wind down Lido on Solana. Whilst this decision was difficult in the face of numerous strong relationships across the Solana ecosystem, it was deemed a necessity for the continued success of the broader Lido protocol ecosystem. For more insights into the process, please refer to the forum discussion post: [research.lido.fi/t/lido-on-solana-funding-proposal/5371](https://research.lido.fi/t/lido-on-solana-funding-proposal/5371?ref=blog.lido.fi). ### Implications for Users 1. **Continued Staking Rewards:** stSOL holders will continue to receive network rewards throughout the sunsetting process. 2. **Unstaking Process:** stSOL holders can unstake via[ the Lido on Solana frontend ](https://solana.lido.fi/?ref=blog.lido.fi)until February 4, 2024\. After this date, unstaking will need to be done using the CLI. Unstaking instructions can be found below: - [Unstaking using Phantom](https://docs.solana.lido.fi/staking/phantom?ref=blog.lido.fi#step-6-unstaking-and-utlizing-stsol) - [Unstaking using SolFlare](https://docs.solana.lido.fi/staking/solflare?ref=blog.lido.fi#step-6-unstaking-and-utlizing-stsol) - [Unstaking using Ledger](https://docs.solana.lido.fi/staking/ledger?ref=blog.lido.fi#withdrawing-solana) - [Unstaking using SoLong](https://docs.solana.lido.fi/staking/solong?ref=blog.lido.fi#step-6-unstaking-and-utlizing-stsol) ### Implications for Node Operators - **Voluntary off-boarding:** P2P Validator and Lido NOM contributors will provide instructions for the process of voluntary off-boarding via Lido community channels. Operators who decide to exit the pool will be able to shut down their nodes following the off-boarding. Operators who stay will maintain their remaining stake on their nodes. ## Key Dates - **October 16, 2023:** Lido on Solana staking will be discontinued and no new stake will be accepted. - **November 17, 2023:** Voluntary node operator off-boarding will begin. - **February 5, 2024:** Lido on Solana Frontend support will conclude. After this point, unstaking will only be feasible via the Command Line Interface (CLI). In closing, the heartfelt gratitude of Lido on Solana contributors goes out to Solana stakers, builders and ecosystem partners. This decision does not reflect the belief of Lido contributors on the potential and longevity of the Solana ecosystem as a whole. The journey with Lido on Solana protocol has been momentous, filled with challenges overcome and milestones celebrated. While this marks the end of this particular chapter, the optimism of Lido contributors for the future of Solana remains undiminished. Stay connected for further updates, and please reach out on Telegram, Discord or Twitter for any questions or concerns. ### Post Mortem: Lido on Ethereum Launchnodes Slashing Incident URL: https://blog.lido.fi/post-mortem-launchnodes-slashing-incident/ Last updated: 2023-11-30T12:55:08.000Z An update as of November 28th, 2023: as of Nov 16, 2023, the 20 validators in question are now withdrawable and have thus stopped accumulating penalties. View full update here: [https://research.lido.fi/t/slashing-incident-involving-launchnodes-validators-oct-11-2023/5631/4](https://research.lido.fi/t/slashing-incident-involving-launchnodes-validators-oct-11-2023/5631/4?ref=blog.lido.fi). ## Incident Summary and Root Cause At 15:55 UTC on October 11 2023, Lido DAO contributors alerted the Launchnodes Node Operator of a slashing event taking place which ultimately affected 20 of the validators that they operate as users of the Lido protocol. A full list of the validators impacted is provided in APPENDIX B below. Within 10 minutes, the affected clusters were brought offline to mitigate potential further risk, and the Launchnodes team began to investigate the root cause. The root cause of the slashing boiled down to executing non-optimal fallback procedures during datacenter connectivity issues. In an attempt to restore validator connectivity, multiple validator client instances (an initial instance and a manually activated fallback instance) were pointed to a single Web3signer instance without slashing protection enabled at the Web3signer level and without blocking the initial instance from the signer (e.g. via firewall rules); this caused double votes to occur for the loaded validators, which led to attester slashings of 20 validators. The fallback validator client was brought on and connected to Web3signer after an attempt had been made to deactivate the nodes attached to the original validator client instance by moving the associated EL node’s data container. A full post mortem from Launchnodes’ perspective is available in APPENDIX A below. A full timeline of the incident can be found in section “4\. Timeline” below. ## Impact The impact on stakers (stETH holders) from a penalties and missed rewards perspective is analysed below: | Description | Amounts | | --------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Initial slashing penalties | Penalties: 20 ETH(Actual) (1 ETH penalty per validator slashed) | | Additional slashing penalties (i.e. due to correlated slashing multiplier) | 0\*\* Projected. No additional slashing penalties expected, as thousands of additional validators would need to be slashed within the correlated 36-day period to trigger a penalty of 1 ETH per validator. | | Slashing-subsequent validator duty inactivity penalties and missed rewards (attestations) | Attestation penalties\*: 1.197 ETHMissed Attestation Rewards\*: 1.668 ETH–Missed Target + Source Rewards: 1.235 ETH–Missed Head Rewards: 0.432 ETH (\*Projected. Assuming Projected base reward 377\. Attestation penalty \~7304.75 gwei, Attestation reward \~ 10179 gwei. Slashing Vector 8192 epochs, incurred until the validators become withdrawable on the Beacon Chain) | | Slashing-subsequent validator duty inactivity penalties (missed proposals and/or sync committees) | Missed proposal rewards\*: 0.198 ETHSync committee penalties / rewards: N/A\*\*\*Projected, based on expected value of 6.14 proposals for total 20 validators (avg proposal reward for 2w = 32,258,570 Gwei)\*\* See “interesting edge case” note in “[Other Penalties](https://eth2book.info/bellatrix/part2/incentives/slashing/?ref=blog.lido.fi#other-penalties)”) | | Slashing-subsequent inactivity leak | 0\*\* Projected. There is no inactivity leak expected as the network is not having issues finalising. | | Penalties and missed rewards of the associated cluster (excluding 20 slashed validators) de-activated during the Slashing investigation | Penalties: 2.188 ETHMissed rewards: 3.426 ETH | | Sum total of projected penalties and missed rewards of all impacted validators | 28.677 ETH | ## Resolution Following the incident, Launchnodes shut down multiple clusters totalling 2582 validators (including the 20 slashed) to ensure no further slashing could take place. In order to prevent the slashing from spreading, Launchnodes nuked the original node clients & data (EL+CL nodes and validator clients) and the original Web3signer instance. Over the following hours, Launchnodes reactivated the remaining 2562 validators successfully without any further slashing event taking place, with slashing protection enabled on the new Web3signer instance. Regarding staker compensation, [Launchnodes has already disbursed 25.663 ETH ](https://etherscan.io/tx/0x7b0a1a53f9435c1d29d0c973ff5883ac0764dc90f6ad40fa5360b205bf9754c2?ref=blog.lido.fi)to cover the initial slashing penalties and missed rewards due to infrastructure downtime, meaning that stakers suffered no reduced rewards on the day of the slashing, and has pledged to also compensate for additional penalties that the slashed validators will receive until they are withdrawn from the network. ## Timeline The order and timing of events was outlined below: | Oct 11, 15:41 UTC | Lido DAO contributor monitoring alerts fire, noting that a majority of Launchnodes operated validators are offline. | | ----------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Oct 11, 15:41 UTC | Lido DAO contributors notify Node Operator Launchnodes of offline validators. Launchnodes acknowledges and confirms internal alerting worked and that the issue is being investigated.Cause of the outage is local data center issues and troubleshooting is in progress. | | Oct 11, 15:47 UTC | Offline validators are gradually coming back online after the Node Operator has switched to a set of fallback nodes. | | Oct 11, 15:53 UTC | ethereum-head-watcher (slashing monitoring system) alert went off indicating 2 validators were slashed. Lido DAO contributor observes validator slashings taking place on the Ethereum network and begins investigation. Validator slashings continue for the following 10 slots. | | Oct 11, 15:55 UTC | Lido DAO contributors ping Node Operator of slashings which are corroborated by internal monitoring. | | Oct 11, 16:02 UTC | Launchnodes confirms validator infrastructure has been shut off | | Oct 11, 16:05 UTC | 20 validators confirmed slashed in total | | Oct 11, 16:27 UTC | Lido twitter account provides public update notifying of the slashing incident: [https://twitter.com/LidoFinance/status/1712142945783013393](https://twitter.com/LidoFinance/status/1712142945783013393?ref=blog.lido.fi) | | Oct 11, 16:43 UTC | Data center continues to have issues causing root cause analysis to not be able to take place at desired pace. | | Oct 11, 18:52 UTC | Launchnodes executes a transaction to remove one undeposited key from the registry, resetting their “vetted keys” (i.e. staking limit) to the currently used number of keys so that no more stake would be allocated to the operator.Tx: [https://etherscan.io/tx/0x55bf362106c6f1f1a8a8632b60fb05c0b3ab5fc8e1cbd7459797ff8c10f35a0b](https://etherscan.io/tx/0x55bf362106c6f1f1a8a8632b60fb05c0b3ab5fc8e1cbd7459797ff8c10f35a0b?ref=blog.lido.fi) | | Oct 11, 20:00 UTC | Launchnodes prepares a plan to restore connectivity to remaining validators by nuking original nodes and Web3signer instance and using encrypted backups of key material to spin up new temporary instance until data center connectivity can be fully restored. As the baremetal server is reachable but the kubernetes clusters are not, this is a viable solution. | | Oct 11, 22:28 UTC | Node Operator has nuked the server hosted in Data Centre 1 and has set up new the Web3signer instance. Web3signer slashing db has also been enabled. | | Oct 11, 22:52 UTC | After taking above mentioned mitigation steps, Node Operator prepares to bring the first validators back online by gradually loading keys into the Web3signer instance and then monitoring performance. | | Oct 11, 23:23 UTC | Node Operator brings first 10 validators back online, successful attestations are observed. | | Oct 12, 00:02 UTC | Additional 90 validators are brought back online following no observed issues. | | Oct 12, 00:50 UTC | Next 400 validators are brought back online to observe performance. 500 total validators now actively attesting. | | Oct 12, 01:34 UTC | Additional 500 validators are brought back online. Performance monitoring continues with no issues observed since re-onlining began. | | Oct 12, 02:52 UTC | Additional 500 validators are brought back online. Performance monitoring continues with no issues observed since re-onlining began. | | Oct 12, 04:23 UTC | Additional 500 validators are brought online after removing 20 slashed keys from those being uploaded. Performance monitoring continues with no issues observed since re-onlining began. 2000 total actively attesting. | | Oct 12, 05:13 UTC | Additional 500 validators are brought back online. Performance monitoring continues with no issues observed since re-onlining began. | | Oct 12 05:31 UTC | Final 100 validators brought back online. Performance monitoring continues with no issues observed. | | Oct 12 06:00 | Launchnodes and Lido DAO contributors work together on lost rewards calculations for the day and estimated total impact of slashing and downtime until the slashed validators are exited. | | Oct 12 09:48 UTC | [Launchnodes submit compensation transaction for day’s rewards reduction](https://etherscan.io/tx/0x7b0a1a53f9435c1d29d0c973ff5883ac0764dc90f6ad40fa5360b205bf9754c2?ref=blog.lido.fi) | | Oct 12, 11:02 UTC | Tweets posted with status update (all offline validators back up, estimated slashing penalties calculated, Launchnodes has compensated stakers for daily rewards reduction) https://twitter.com/LidoFinance/status/1712423359340818926 | | Oct 13 07:30 UTC | Root cause analysis concluded by Launchnodes. | ## Action Items - Enable Web3signer slashing database (already confirmed as done). - Launchnodes to work on plan for setting up infra anew on baremetal using updated risk mitigation processes. - Launchnodes to communicate plan and updated risk mitigation and anti-slashing processes to Lido DAO community. - Launchnodes to proceed with shutdown of interim infra and bringing up validators on baremetal infra. ## Appendix A ### Launchnodes Incident Report ### Timeline & Root Cause **Timeline** | October 11th14:34 UTC | System Outages at DC1 | Launchnodes’ internal monitoring systems raised alerts that core components of Launchnodes’ infrastructure in their DC1 ‘bare metal’ Data Centre environment were sporadically down.Launchnodes had already noticed intermittent connectivity issues through its monitoring dashboard and was investigating. Initially this was believed to be due to activation of multiple new nodes in DC1. | | ----------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Investigation of Connectivity Outage | Further investigation showed that Launchnodes’ node clusters were inaccessible, due to a failure of DC1’s Virtual Private Connection.Access to Launchnodes’ servers was possible, however access to nodes clusters was not. Nodes connectivity was intermittent, with missed attestations noted on some nodes. | | | Escalation to Data Centre Provider | Tickets were raised immediately with DC1 support to restore connectivity, including evidence of the problem from logs, and ping tests to different servers. | | | October 11th15:35 UTC | EL-CL Services Down | Further alerts were generated, notifying Launchnodes that key Execution Layer-Consensus Layer services were down. | | October 11th15:41 UTC | Lido DAO Notifications | Lido DAO members confirmed Launchnodes’ monitoring of Validators being offline. Launchnodes explained the ongoing DC1 connectivity issues. | | October 11th15:45 UTC | Decision to Failover to Backup Data Centre | After investigating the outage and with no imminent resolution expected at DC1, Launchnodes’ team decided to fail over to a 2nd ‘cold standby’ data centre, DC2. | | Detaching Besu storage at DC1 | Launchnodes have bare metal servers that constitute an independent Kubes cluster in DC1\. On that cluster the Besu service is running. The Besu storage is local on that server, and is used by the Besu service.As the Kubes clusters were inaccessible at DC1, but access to the server remained possible, Launchnodes elected to move the Besu storage, to detach it from the Besu service.This was carried out to prevent validators from attesting, even if the connectivity to the nodes was restored, as the EL-CL pair would not function without synchronisation with the latest head. | | | Preparing for Failover to Backup Data Centre, DC2 | Launchnodes began preparing to enliven its ‘cold standby’ backup environment, in the expectation that the nodes at the primary site were rendered permanently offline. | | | Begin Provisioning Failover Nodes with Existing Web3 Signer | Launchnodes runs web3 signers remotely from its node infrastructure. This is an architectural choice, as this enables the Web3 signer to act as a ‘kill switch’ in the event of needing to stop Validator nodes from attesting when connectivity is erratic or nodes are inaccessible.Nodes at the failover Data Centre DC2 were configured to utilize the existing Web3 signer, already loaded with keys. Launchnodes started the services for Pre-synced Beacon and Geth nodes, and began to bring node clusters online in the failover Data Centre. | | | October 11th15:55 UTC | Notification of Slashing | Launchnodes’ monitoring systems detected a slashing event on 2 Validators.This was immediately confirmed by the Lido team through alert messages from Lido DAO contributors.Slashing took place on 18 further validators.Lido DAO contributors request that all nodes be deactivated to avoid further issues. | | October 11th 16:02 UTC | Disabling of Nodes | Launchnodes completed deactivating all of its node infrastructure, by manually stopping all Validator services at DC1, and advised by Lido DAO contributors. | | October 11th16:04 UTC | Root Cause Analysis | Launchnodes began investigating root cause of the slashing incident. Node infrastructure at DC1 remained inaccessible. | | October 11th16:16 | Lido Communications | Launchnodes reviewed and agreed the accuracy of Lido’s proposed tweets about the incident. | | October 11th18:52 UTC | Staking Limit Reset | Launchnodes resets its “vetted keys”, to prevent further stake being allocated. | | October 11th17:37 UTC | Launchnodes Pledge to Lido Stakers | Launchnodes tweets, “Launchnodes will reimburse all losses incurred to Lido.” | | October 11th20:00 UTC | Plan to Restore Service | Launchnodes prepared a step-by-step plan to safely and securely restore service to the ‘cold standby’ Validators in DC2.This involved fully decommissioning the original nodes at DC1, destroying the servers and the web3 signer instance. | | October 11th22:28 UTC | Failover Nodes and Web3 Signer Instance Ready | Launchnodes completed setup and syncing of the Execution and Consensus layer node infrastructure.A fresh Web3 signer instance was configured, with keys loaded from secure backup. Web3signer slashing db was also enabled. | | October 11th22:52 UTC | Validators Online | Validator nodes were brought back online, with a measured, cautious approach proposed by Launchnodes and agreed by Lido DAO contributors.Keys were steadily loaded on the web3signer, with care to exclude keys for validators that had already been slashed.10, 90, 400, 500, 500, 500, 500, 100 validators were brought back online in batches, with careful monitoring of performance at each stage. | | October 11thOngoing | Monitoring | Launchnodes continued to monitor node performance throughout the night. | | October 12th06:00 UTC | Impact Assessment | Lido DAO contributors and Launchnodes review the impact of the slashing. | | October 12th06:40 UTC | Making stETH Stakers Whole | Launchnodes commits to ensuring that there is no negative financial impact to any Lido staker as a result of this incident.Offers to disburse the calculated rewards impact for the first day to the Lido protocol Execution Layer Rewards \`Vault before the rebasing scheduled for 12:00 UTC. | | October 12th09:48 UTC | Compensation Submitted | Launchnodes transfers a compensation transaction of 25.663 ETH to the Lido EL Rewards Vault, with an agreement that any further losses resulting from this incident would also be compensated. | | October 12thOngoing | Infrastructure Review and Optimisation | Launchnodes reviews its infrastructure and processes, in order to implement guaranteed safeguards against future slashing incidents. | **Root Cause** The root cause was Launchnodes failure to transition across to its ‘cold standby’ Data Centre, DC2 in an optimal way. This resulted in nodes being active across 2 different Data Centres simultaneously - a scenario that should not have occurred. Several actions could have preventing nodes from being slashed, including: - Destroying the DC1 node cluster before failing over to DC2. - Destroying the web3 signer before failing over to DC2. ## Appendix B ### Slashed validators | Slashed Validators | Slashed by | Reason | Slot | Epoch | | ---------------------------------------------------------------- | ---------------------------------------------------------------- | --------------------- | ------------------------------------------------------------- | ------------------------------------------------------------ | | [964922](https://beaconcha.in/validator/964922?ref=blog.lido.fi) | [890138](https://beaconcha.in/validator/890138?ref=blog.lido.fi) | Attestation Violation | [7517976](https://beaconcha.in/slot/7517976?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [964396](https://beaconcha.in/validator/964396?ref=blog.lido.fi) | [890138](https://beaconcha.in/validator/890138?ref=blog.lido.fi) | Attestation Violation | [7517976](https://beaconcha.in/slot/7517976?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [964371](https://beaconcha.in/validator/964371?ref=blog.lido.fi) | [574681](https://beaconcha.in/validator/574681?ref=blog.lido.fi) | Attestation Violation | [7517975](https://beaconcha.in/slot/7517975?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [964360](https://beaconcha.in/validator/964360?ref=blog.lido.fi) | [574681](https://beaconcha.in/validator/574681?ref=blog.lido.fi) | Attestation Violation | [7517975](https://beaconcha.in/slot/7517975?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [964104](https://beaconcha.in/validator/964104?ref=blog.lido.fi) | [189894](https://beaconcha.in/validator/189894?ref=blog.lido.fi) | Attestation Violation | [7517974](https://beaconcha.in/slot/7517974?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963910](https://beaconcha.in/validator/963910?ref=blog.lido.fi) | [189894](https://beaconcha.in/validator/189894?ref=blog.lido.fi) | Attestation Violation | [7517974](https://beaconcha.in/slot/7517974?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963894](https://beaconcha.in/validator/963894?ref=blog.lido.fi) | [742440](https://beaconcha.in/validator/742440?ref=blog.lido.fi) | Attestation Violation | [7517973](https://beaconcha.in/slot/7517973?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963841](https://beaconcha.in/validator/963841?ref=blog.lido.fi) | [742440](https://beaconcha.in/validator/742440?ref=blog.lido.fi) | Attestation Violation | [7517973](https://beaconcha.in/slot/7517973?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963820](https://beaconcha.in/validator/963820?ref=blog.lido.fi) | [175591](https://beaconcha.in/validator/175591?ref=blog.lido.fi) | Attestation Violation | [7517972](https://beaconcha.in/slot/7517972?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963578](https://beaconcha.in/validator/963578?ref=blog.lido.fi) | [175591](https://beaconcha.in/validator/175591?ref=blog.lido.fi) | Attestation Violation | [7517972](https://beaconcha.in/slot/7517972?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963574](https://beaconcha.in/validator/963574?ref=blog.lido.fi) | [284709](https://beaconcha.in/validator/284709?ref=blog.lido.fi) | Attestation Violation | [7517971](https://beaconcha.in/slot/7517971?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963403](https://beaconcha.in/validator/963403?ref=blog.lido.fi) | [284709](https://beaconcha.in/validator/284709?ref=blog.lido.fi) | Attestation Violation | [7517971](https://beaconcha.in/slot/7517971?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [965141](https://beaconcha.in/validator/965141?ref=blog.lido.fi) | [535608](https://beaconcha.in/validator/535608?ref=blog.lido.fi) | Attestation Violation | [7517970](https://beaconcha.in/slot/7517970?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963975](https://beaconcha.in/validator/963975?ref=blog.lido.fi) | [535608](https://beaconcha.in/validator/535608?ref=blog.lido.fi) | Attestation Violation | [7517970](https://beaconcha.in/slot/7517970?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963781](https://beaconcha.in/validator/963781?ref=blog.lido.fi) | [418448](https://beaconcha.in/validator/418448?ref=blog.lido.fi) | Attestation Violation | [7517969](https://beaconcha.in/slot/7517969?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963358](https://beaconcha.in/validator/963358?ref=blog.lido.fi) | [418448](https://beaconcha.in/validator/418448?ref=blog.lido.fi) | Attestation Violation | [7517969](https://beaconcha.in/slot/7517969?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963194](https://beaconcha.in/validator/963194?ref=blog.lido.fi) | [281420](https://beaconcha.in/validator/281420?ref=blog.lido.fi) | Attestation Violation | [7517968](https://beaconcha.in/slot/7517968?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [963275](https://beaconcha.in/validator/963275?ref=blog.lido.fi) | [281420](https://beaconcha.in/validator/281420?ref=blog.lido.fi) | Attestation Violation | [7517968](https://beaconcha.in/slot/7517968?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [962852](https://beaconcha.in/validator/962852?ref=blog.lido.fi) | [940614](https://beaconcha.in/validator/940614?ref=blog.lido.fi) | Attestation Violation | [7517967](https://beaconcha.in/slot/7517967?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | | [962807](https://beaconcha.in/validator/962807?ref=blog.lido.fi) | [940614](https://beaconcha.in/validator/940614?ref=blog.lido.fi) | Attestation Violation | [7517967](https://beaconcha.in/slot/7517967?ref=blog.lido.fi) | [234936](https://beaconcha.in/epoch/234936?ref=blog.lido.fi) | ### Bringing Staked ETH to Cosmos URL: https://blog.lido.fi/bringing-staked-eth-to-cosmos/ Last updated: 2023-10-04T18:34:46.000Z ### Liquid staking with Lido goes Interchain 🪐 The [wstETH bridge to Cosmos](https://bridge.neutron.org/bridge?ref=blog.lido.fi) is now live. Developed in collaboration with [Neutron](https://neutron.org/?ref=blog.lido.fi) and [Axelar](https://axelar.network/?ref=blog.lido.fi), the wstETH Cosmos bridge brings [Lido’s staked ETH](https://lido.fi/ethereum?ref=blog.lido.fi) to the Interchain ecosystem, further expanding the liquidity and stability of staked Ethereum. The aim of the wstETH Cosmos bridge is to extend the role of staked ETH across complementary ecosystems whilst helping to build out a flourishing (and unified) Cosmos-based DeFi hub. Additionally, the bridge functions as an innovative foundational layer for the development of in-flight staking (the ability to send unstaked ETH to Neutron and receive wstETH with a single transaction) as well as cross-chain governance capabilities. Having already established a strong presence across the likes of Optimism, Arbitrum and Polygon, this expansion to Cosmos marks the first true cross-ecosystem jump for wstETH and is a significant jump towards unifying and expanding the Ethereum and Cosmos DeFi ecosystems. ➡️ **To bridge your wstETH to Cosmos: [Neutron bridge app](https://bridge.neutron.org/bridge?ref=blog.lido.fi)** ➡️ **For tutorials and instructions: [Lido Help Centre](https://help.lido.fi/en/collections/6278886-lido-wsteth-on-cosmos?ref=blog.lido.fi)** [![](https://blog.lido.fi/content/images/2023/09/Screenshot-2023-09-29-at-12.49.12.png)](https://bridge.neutron.org/bridge?ref=blog.lido.fi) ### The Role of Staked ETH in Cosmos At its core, this bridge aims to make staked ETH from Ethereum accessible and usable within the Cosmos network, fostering interchain liquidity. In particular wstETH will act as an integral liquidity pillar for a number of exciting Cosmos dApps including [Astroport](https://astroport.fi/?ref=blog.lido.fi), [Osmosis](https://osmosis.zone/?ref=blog.lido.fi), and [Mars](https://marsprotocol.io/?ref=blog.lido.fi). To facilitate this, both Axelar and Neutron have committed 1% of their respective token supplies towards incentivizing liquidity for wstETH (more details on this are expected to be shared shortly). ### What’s Next? The wstETH Cosmos bridge represents a significant step towards a more interconnected blockchain landscape. As wstETH finds its place within the Cosmos ecosystem, it not only strengthens the surrounding DeFi applications, but also contributes to the broader vision of staked ETH seamlessly flowing through a more interoperable blockchain universe. ### Lido Grants - Funding & Exploration of ZK-Proof Trustless Oracles URL: https://blog.lido.fi/grants-exploration-zkproof-trustless-oracles/ Last updated: 2026-06-29T09:19:40.000Z - Lido DAO (via [Lido Ecosystem Grants Organisation](https://lido.fi/lego?ref=blog.lido.fi)) is funding a number of initiatives aimed at reducing possible oracle attack vectors through the use of supplementary trustless zk-proof TVL oracles. - LEGO council accepted proposals for funding from both [\=nil; Foundation](https://nil.foundation/?ref=blog.lido.fi) and [Metacraft Labs](https://research.lido.fi/t/dendreth-a-trustless-oracle-for-liquid-staking-protocols/5136?ref=blog.lido.fi) to explore an additional sanity and correctness check using zkLLVM technology for the TVL accounting oracle. The grants are aimed at building trustless accounting technology and would, if implemented, function as additional oracle checks rather than complete replacements for current accounting oracles. - Supporting a trustless oracle solution resonates with a key goal of the Lido DAO: reducing dependence on trust within the community and bolstering the decentralization of the protocol, a principle exemplified by the [Lido Scorecard](https://lido.fi/scorecard?ref=blog.lido.fi). ## What’s the idea? In short, the aim is to report Lido's total value locked plus active and exited validator counts to a dedicated Execution Layer contract (in a verifiable and trustless manner using zero-knowledge proofs). The current reliance on trusted oracles inevitably introduces additional security risks to the Lido protocol as well as economic overhead to the DAO. Firstly, the reliance on trusted oracles in liquid staking protocols poses some risk. These oracles have the power to influence token prices within the protocols, potentially favoring certain users and shifting profits disproportionately. This centralized control contradicts the fundamental principles of decentralization and trustlessness that underpin blockchain technology. Secondly, the oracles in question control a substantial amount of funds within the protocol. To ensure their continued participation and prevent potential defection, it is essential to provide them with adequate compensation. The proposed zero-knowledge circuits offer a versatile solution that could supplement centralized oracles, providing a fixed-cost approach through proof validation on-chain. This approach has the potential to bolster the security, decentralization, and economic efficiency of the TVL oracle accounting process, and could be expanded to more oracles in the future. ### How is a trustless solution more secure than a consensus-based one? A trustless solution guarantees the correctness of the oracle report by verifying a zkProof and anchoring the report and proof to the blockchain state. This eliminates the need to trust the oracle operator or other involved parties. As long as the report passes all checks, it is considered legitimate, even if the sender is compromised. ## Solution 1 - =nil; Foundation Lido protocol users stake their ETH, receive stETH liquid tokens, and enjoy the rewards generated by their ETH assets while validators from the Lido node network perform their duties. These rewards are distributed to stETH holders based on the regular accounting report, which contains crucial information such as total value locked in staking, active/exited validator counts, withdrawal and rewards balances, and more. The ZK check verifies that the computations performed on the data are correct. The proof includes the expected algorithm encoded in the circuit compiled by zkLLVM, with additional witness data to allow for checking if the oracle utilized the correct data. This ensures that the correct computation was performed on the correct data. ![](https://blog.lido.fi/content/images/2023/09/lido-x-nil-oracle--1-.png) The solution involves three main components: the contract, the oracle, and the proof producer. - **Contract:** The contract receives the report and additional witness from the oracle, and orders zkProofs directly from the EVM via the Proof Market EVM Endpoint. It performs necessary checks, such as verifying the zkProof with the zkLLVM verifier contract and comparing the Beacon Block hash against the expected value. If all checks pass, the contract stores the report for future retrieval; otherwise, it rejects the report. - **Oracle**: The oracle obtains necessary information from the Consensus and Execution layers, computes the report (including total locked value and validator counts), and produces additional data required for proof generation. - **Proof Producer:** The proof producer selected with an algorithm from the distributed network of provers on Proof Market takes the input from the oracle and runs it through a ZK circuit compiled with the use of zkLLVM, generating a zkProof. This circuit replicates the computations performed by the oracle, creating a verifiable trail of operations. Of particular note, the zkLLVM-based TVL zkOracle (aptly named [Lido Validators' Balance zkOracle](https://lu.ma/nil-lido-zk-oracle?ref=blog.lido.fi)) focuses on verifying the key part of the accounting report – the total value locked (TVL) It does this by automating in-EVM historical data access and leveraging zkLLVM( with the ultimate goal beinga higher level of security for Lido Protocol oracle accounting). To facilitate this process, [Proof Market EVM endpoint](https://nil.foundation/blog/post/proofmarket-evm-endpoint?ref=blog.lido.fi), a recently released gateway interface, enables provable computations composability for all EVM applications. This allows proofs for Lido's zkOracle computations to be ordered directly from the EVM via Proof Market on Ethereum meaning there is no direct hardware cost to the Lido protocol side. The zkProofs generated by the decentralised network of proof generators on Proof Market will be submitted directly to the Lido Ethereum application for final verification. ### Video Demo + Extra Reading The demo below showcases end-to-end operation of zkLLVM-based oracle+contract computing total value locked (TVL) and active and exited validators in a controlled environment. - Video: [ZKLLVM Oracle Demo](https://drive.google.com/file/d/1ovgc3cwCy1-eipzVM0%5FqP0EGBFup2NXf/view?ref=blog.lido.fi) - Description: [ZKLLVM Oracle Demo transcript](https://docs.google.com/document/d/1Sb5k8vqYKt1j9QHnBxPu7iXMHtRc2YjILXMefdnWbSY/?ref=blog.lido.fi) ### Implementation and a source code \=nil;’s solution is fully functional, delivered under open source MIT licence and can be deployed or tried out from following repositories: - [lido-trustless-tvl-oracle-solution](https://github.com/color-typea/lido-trustless-tvl-oracle-solution?ref=blog.lido.fi) - [lido-zkllvm-accounting-circuit](https://github.com/color-typea/lido-zkllvm-accounting-circuit?ref=blog.lido.fi) ## Solution 2 - DendrETH The DendrETH project from Metacraft Labs promised two distinct technical avenues. The first leverages a fixed set of withdrawal credentials within a liquid staking protocol. This approach requires no adjustments to the smart contracts overseeing deposits, and permits DendrETH's zero-knowledge circuits to identify validators linked to specified withdrawal credentials seamlessly. The second approach involves a Merkle Accumulator for a Validator Set. This caters to liquid staking protocols with multiple operator dynamics. Here, smart contracts governing deposits are modified to monitor operator-specific validator sets. This is achieved through a binary SHA256 Merkle tree (in order to facilitate efficient proofs for specific operators). The ultimate goal remains a practical iterative computation, striving to merge updates with as little latency as possible. Importantly, there is a chance gas costs could remain constant under this approach (i.e. not affected by Ethereum validator set size), although the jury is still out on whether this is practically possible. Verification is, though, yet to be designed and implemented. All components of the system will be fully open source (GPLv3). MetaCraft Labs will strive to provide comprehensive guides for operating instances of our proof generators and relay nodes, as well as easy-to-use packages for most operating systems (i.e. docker images). ## Next Steps By supporting fundamental initiatives focused on decentralization and trust reduction within the oracle accounting process, LEGO showcases a mutual commitment to addressing the challenges posed by centralized oracle accounting. These grants underscore a collaborative effort to alleviate the trust burden associated with this process, presenting a promising avenue toward resolving these concerns and the greater decentralization and security of the Lido Protocol. It should be noted that ZK technology is still in its infancy and requires additional experimentation, testing and auditing before feasibly moving to a fully operational ‘stand-alone’ status. If the utilisation of zk-proof technology proves efficient, secure and beneficial for the operation of Lido Protocol oracle accounting, there is potential to gradually roll out broader functionality throughout the oracle set moving forward. Improvements to the Lido protocol continue to push the boundaries of trust-minimization, ensuring the utmost security and reliability for its users, shaping a future where trustless data access and verification is the norm, not the exception. ### Lido on Ethereum Wave 5 Onboarding URL: https://blog.lido.fi/lido-on-ethereum-wave-5-onboarding/ Last updated: 2026-06-04T14:38:54.000Z ### Furthering Lido's Commitment to Infrastructure Decentralization During August and September of 2023, the Lido Node Operator Subgovernance Group assessed 117 applications to the [Lido on Ethereum](https://lido.fi/ethereum?ref=blog.lido.fi) Wave 5 Onboarding round that culminated in a [shortlist proposal to the Lido DAO](https://research.lido.fi/t/announcement-onboarding-for-ethereum-wave-5/4809/17?u=kimonsh&ref=blog.lido.fi) for the onboarding of 7 new Node Operators. This follows [Stage 1 of the onboarding round](https://blog.lido.fi/expanding-lidos-ethereum-node-operator-set/) where two Node Operators (Launchnodes and SenseiNode) were successfully onboarded. Node Operators were assessed by a committee of over 30 teams consisting of existing Lido Node Operators in addition to independent parties. The Lido on Ethereum Wave 5 assessments also included participation from many of the client teams onboarded as operators during Wave 4\. [The Wave 5 Stage 2 Onboarding Snapshot vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x780d8397c4325757f3506c35274da47c87727fb15dd592e8c4455de92bf2de27) has passed, and as the new Node Operators are onboarded they will improve the Lido on Ethereum set by meaningfully adding to the diverse mix of geographic and jurisdictional representation, as well as infrastructure hosting setups, and client types. As outlined in the Factors to Consider section of the Wave 5 Onboarding announcement, the LNOSG suggested the following characteristics be prioritized for this onboarding round: 1. Reducing the overall percentage of validators in the Lido on Ethereum set using Geth, Prysm, or Lighthouse. 2. Reducing the overall percentage of validators in the Lido on Ethereum using public cloud infrastructure. 3. Promoting additional geographic diversity of Node Operators using the Lido on Ethereum protocol with an emphasis on onboarding operators outside of the EU and United States (as this is where the majority of current Node Operators are located). ## The Path to Diversifying Lido Validation Infrastructure [Lido on Ethereum](https://lido.fi/ethereum?ref=blog.lido.fi) Node Operators disclose information in the aggregate to the Ethereum community via the quarterly [Validator and Node Operator Metrics (VaNOM) report](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi). By analyzing these metrics, the LNOSG seeks to assist the DAO to onboard Node Operators that will promote further decentralization of infrastructure and jurisdictions for larger-scale Node Operators. Of the Node Operators proposed for onboarding, all 7 utilize minority execution layer (EL) clients and have committed to using Geth for <30% of their Lido-related validators within 6 months of onboarding, each use at least one minority consensus layer (CL) client, and no operator uses the public cloud for their primary infrastructure. ## Onboarding Ethereum Client Teams Among the Node Operators proposed for onboarding during Wave 5, Develp GmbH, the team representing the consensus layer client Nimbus, was included in the suggested shortlist. As discussed in the [Lido on Ethereum Wave 4](https://blog.lido.fi/additions-to-ethereum-node-operator-set-wave-4/) blog post, the Lido Node Operator Subgovernance group has suggested the onboarding of additional Ethereum client teams through its recommendations to the Lido DAO. The onboarding of client teams began during Wave 4 and since then has had a meaningful positive impact in terms of furthering the decentralization and resilience of the Ethereum base layer, as well as providing client teams secondary sources of revenue and – most importantly, a guiding voice in the Lido community on a diverse set of topics and initiatives from PBS (and MEV Boost usage), to client diversity and onboarding. As one example, [ChainSafe](https://chainsafe.io/?ref=blog.lido.fi), the team behind the consensus layer client [Lodestar](https://github.com/ChainSafe/lodestar/?ref=blog.lido.fi), was among the Node Operators onboarded during Wave 4\. At the time Chainsafe applied for the Wave 4 onboarding round, the team was running < 200 validators on mainnet utilizing the Lodestar client. As of 18/9/23, ChainSafe is now utilizing Lodestar for over 9,500 validators via the Lido protocol. ChainSafe joining as a Node Operator not only allowed for one of the smallest consensus layer clients to grow and further decentralize the CL, but also allowed the team to improve Lodestar to the point where it is now among the best performing CL clients utilized by Ethereum Node Operators. ## Stage 2 Proposed Cohort ### A41 A41 is a blockchain infrastructure service provider based in Seoul, South Korea. Incorporated in May 2022, we successfully have supported a total of 19 mainnet networks. Our commitment to the industry is to become a reliable and secure partner in bringing the Crypto Economy to everyday life. Joining the Lido community is another step we are taking to get closer to our vision. We believe the contribution that we are going to make through Lido participation will be significant. And, A41 is ready to engage with other Lido node operators and community members to make the ecosystem more sound and colorful. *\- John Park, CEO* ### Develp GmbH [Develp GmbH](https://nimbus.team/index.html?ref=blog.lido.fi) (Develp) provides core infrastructure and operations services to support staking protocols on Ethereum. It is committed to decentralisation of the Ethereum network, use of minority clients in its operations for the Lido ecosystem, and draws on the skills and expertise of the Nimbus client team in providing these services. Through this, it aims to contribute to further development of the client. *\- Carl B, Co-founder of Status Network* ### Ebunker [Ebunker](https://www.ebunker.io/?ref=blog.lido.fi) is a tech-driven Ethereum infrastructure company based in Hong Kong. We primarily serve institutional and individual clients in the Asia-Pacific region by offering Ethereum non-custodial staking services as well as a range of other innovative solutions, including consumer-grade validator hardware. Our mission is to help Ethereum achieve true decentralization. We support the use of multi-client setups and non-public cloud infrastructure for operating Ethereum validators. We aim to lower the threshold for Ethereum staking, aspiring to enable millions around the world to become part of the validator ecosystem. We are thrilled to be a part of the Lido ecosystem. With our technological expertise, we're committed to making both Lido and Ethereum more robust. Leveraging our influence in Asia, we also aim to broaden awareness and encourage greater participation in the building of the Ethereum and Lido ecosystems. *\- Allen Ding, CEO of Ebunker* ### Gateway.fm AS Joining the Lido ecosystem has given us an amazing opportunity to showcase our technical acumen and advanced capabilities when it comes to building validator infrastructure solutions tailored to further decentralizing the web3 ecosystem in relation to staking services. We also devote a lot of focus on working with node client diversity to allow a more systematic way to enable the growth of additional Ethereum clients in the space. We’ve been able to deploy our deep infrastructure knowledge, coupled with our extensive core development experience to serve the many leading solutions in the crypto space. \- Cuautemoc Weber, Co-Founder and CEO of [Gateway.fm](https://gateway.fm/?ref=blog.lido.fi) ### Numic [Numic](https://numic.au/?ref=blog.lido.fi) is a quantitative investment and blockchain infrastructure company based in Brisbane, Australia. Numic has a history of developing and trading statistically driven strategies that produce great returns by adhering to mathematical and statistical models. Numic also offers Ethereum and Cardano staking services, allowing customers to stake their crypto assets. Led by a team with expertise in computer science, finance and software engineering, Numic aims to stay ahead in the blockchain revolution and financial markets. *\- Frank Тhurnbacher, Director* ### ParaFi Technologies LLC [ParaFi Technologies](https://parafi.com/?ref=blog.lido.fi) LLC develops and runs advanced blockchain infrastructure. We are an experienced group of engineers and operators who have been deeply involved in DeFi since 2019. At ParaFi Technologies, we have amassed unique knowledge and understanding in the areas of infrastructure, custody, data analytics, and on-chain services. We pride ourselves in running sound infrastructure– sufficiently decentralized, scalable, and secure for the Lido ecosystem. We are thrilled to be working alongside the community to further the long-term health, ethos, and success of the Ethereum network. \- Kevin Yedid-Botton, on behalf of ParaFi Technologies LLC ### RockawayX Infra In allowing users to seamlessly stake Ethereum, Lido has meaningfully accelerated the growth, security and democratization of the world's largest and most valuable computing network. We are excited to join its validator set and support Ethereum's increased decentralization. As more users participate in Ethereum consensus, the decentralized financial system it underpins will grow more innovative and enduring. Since its founding, [RockawayX Infrastructure](https://rockawayx.com/infrastructure?ref=blog.lido.fi) has been designed to support that future. Across our industry, server security has been consistently prioritized; our firm has achieved top performance in that area, and has pioneered new physical security and decentralization standards. We only operate bare metal private rack infrastructure from three Tier 3 colocation centers, that are located in Europe and operate under tight access controls. Our uptime has consistently exceeded 99.9%, and our validators are operated by an internal team, with no material reliance on third-party providers. We look forward to partnering closely with the global LIDO community for years to come. \- Tomas Eminger, Chief Technology Officer, RockawayX Infrastructure ## Next Steps With the Snapshot successfully concluded, an on-chain Aragon vote is planned for October 3rd. If the Aragon vote successfully passes, the new Node Operators will be able to participate in utilizing the Lido protocol to run mainnet validators by the end of October. Over the coming months, additional proposals to the DAO are expected that may allow for the onboarding of Node Operators across novel formats to the protocol. Notably, the next Distributed Validator Technology testnet with [Obol Network](https://blog.lido.fi/lido-on-ethereum-obol-network-testing-v2/) and [SSV Network](https://blog.lido.fi/lido-on-ethereum-ssv-network-testing-v2/) is planned to take place in Q4\. If you are a solo or community staker interested in participating, please signal interest via [this form](https://forms.gle/RTTGHLpG7cFSuZNR6?ref=blog.lido.fi). ### Guide: Providing Liquidity on Uniswap URL: https://blog.lido.fi/providing-liquidity-on-uniswap/ Last updated: 2023-09-19T06:59:23.000Z [Uniswap](https://uniswap.org/?ref=blog.lido.fi) is an automated market maker that allows for quick and efficient on-chain token swaps on Ethereum. Built around a set of smart contracts, Uniswap creates a system for peer-to-peer market making opening up for permissionless trading across Ethereum. In addition to swaps, Uniswap has been revolutionary through allowing users to earn rewards by providing liquidity to liquidity pools. In this guide we'll walk you through how to provide liquidity on Uniswap using [Lido’s wstETH](https://help.lido.fi/en/articles/5231836-what-is-wrapped-steth-wsteth?ref=blog.lido.fi), covering the following topics: - Why Provide Liquidity on Uniswap? - Guide: Providing wstETH Liquidity on Uniswap - FAQ ## Why Provide Liquidity on Uniswap? Uniswap plays the role of regular exchange or trading platform, allowing for users to swap in and out of different tokens. However, Uniswap replaces the centralised order book with an Automated Market Maker (AMM) built around liquidity pools to determine token pricing. These liquidity pools are created by LPs - liquidity providers - who earn LP tokens in exchange for providing liquidity to the pools. [![](https://blog.lido.fi/content/images/2023/09/Screenshot-2023-09-18-at-15.26.12.png)](https://app.uniswap.org/add/0x7f39c581f595b53c5cb19bd0b3f8da6c935e2ca0/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2/100?minPrice=1.138714&maxPrice=1.140993&ref=blog.lido.fi) When you provide liquidity to a certain token pool on Uniswap you receive a share of the trading fees generated by the pool. Despite the possibility of added income from LP’ing, it does not come without risks and the value of your LP position can ultimately be worth less than you put in. To get a thorough understanding of the risks of LP’ing, check out the following article: [Uniswap: A Good Deal for Liquidity Providers?](https://pintail.medium.com/uniswap-a-good-deal-for-liquidity-providers-104c0b6816f2?ref=blog.lido.fi) ## Guide: Providing wstETH Liquidity on Uniswap Due to complexities associated with the rebasing nature of Lido’s stETH, Uniswap uses [wstETH](https://help.lido.fi/en/articles/5231836-what-is-wrapped-steth-wsteth?ref=blog.lido.fi) \- the wrapped version of stETH. As such, Lido users can add liquidity to the [wstETH/ETH pool](https://info.uniswap.org/?ref=blog.lido.fi#/pools/0x109830a1aaad605bbf02a9dfa7b0b92ec2fb7daa) on Uniswap. ### Step 1: Get wstETH Before you start, you need to make sure you have wstETH in your Ethereum wallet. To wrap your ETH or stETH to wstETH, visit [stake.lido.fi/wrap](https://stake.lido.fi/wrap?ref=blog.lido.fi). ![](https://blog.lido.fi/content/images/2023/09/Screenshot-2023-09-18-at-15.29.30.png) ### Step 2: Choose the token pair, or pool, to add liquidity to As stated above, you can choose any token pool to add liquidity to, with the wstETH/ETH pool being the largest TVL pool for Lido users. You can head to [info.uniswap.org/#/pools](https://info.uniswap.org/?ref=blog.lido.fi#/pools) for an overview of all Uniswap pools. **The wstETH/ETH pool can be found [here](https://app.uniswap.org/add/0x7f39c581f595b53c5cb19bd0b3f8da6c935e2ca0/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2/100?minPrice=1.138745&maxPrice=1.141024&ref=blog.lido.fi).** ### Step 3: Select the fee tier The next step is to select the fee tier - 0.01%, 0.05%, 0.3% or 1%. This allows you to choose margins depending on expected volatility. With more correlated token pairs, like wstETH and ETH, a low fee tier is the most common choice. For more information on this, check out the [Uniswap Docs](https://docs.uniswap.org/concepts/protocol/fees?ref=blog.lido.fi#finding-the-right-pool-fee). ![](https://blog.lido.fi/content/images/2023/09/Screenshot-2023-09-18-at-15.30.10.png) ### Step 4: Select the price range Next up you can choose the price range to add liquidity to. You can choose the entire price range, or choose to add liquidity to a specific price range. If the token price moves out of your chosen price range, you will not earn fees on trades. ![](https://blog.lido.fi/content/images/2023/09/Screenshot-2023-09-18-at-15.31.21.png) ### Step 5: Choose amount of tokens to add as liquidity Choose the amount of tokens to add to the pool, adding a balance between the two tokens. Once you choose how wstETH to add, the amount of ETH needing to be added will automatically be shown. ![](https://blog.lido.fi/content/images/2023/09/Screenshot-2023-09-18-at-15.30.59.png) ### Step 6: Preview and Add Last step is to review your configuration and add it. This will require the approval of a transaction using your chosen wallet. Uniswap will automatically calculate your share of the pool and provide you with LP (Liquidity Provider) tokens representing your share. Once the transaction is confirmed, you are now a liquidity provider on Uniswap and you'll start earning a portion of the trading fees. You can review your position on [app.uniswap.org/pools](https://app.uniswap.org/pools?ref=blog.lido.fi). Providing liquidity on Uniswap is a great way to earn rewards while contributing to the liquidity and efficiency of the underlying market. As stated above, this does not come without risk and it’s important that you fully understand the underlying risks before committing to this. ## Frequently Asked Questions ### What is wstETH? wstETH is a wrapped version of Lido’s stETH which is more DeFi compatible. To learn more about wstETH, check out our explainer here: [What is wstETH](https://help.lido.fi/en/articles/5231836-what-is-wrapped-steth-wsteth?ref=blog.lido.fi) ### Why am I using wstETH and not regular stETH? Due to complexities surrounding the rebasing of [Lido’s stETH](https://stake.lido.fi/?ref=blog.lido.fi), a number of DeFi protocols have chosen to add wstETH. wstETH is non-rebasing, and network rewards are reflected through an increasing price of wstETH as opposed to daily rebases. ### Is it safe to provide liquidity on Uniswap? Providing liquidity on Uniswap is a common DeFi activity but does not come without risks. For more information on the risks of providing liquidity on Uniswap, check out: [Uniswap: A Good Deal for Liquidity Providers?](https://pintail.medium.com/uniswap-a-good-deal-for-liquidity-providers-104c0b6816f2?ref=blog.lido.fi) ### How do I withdraw my liquidity from Uniswap? You can withdraw your liquidity at any time by going to the Uniswap pool and selecting the "Remove Liquidity" option. ### What returns can I expect from providing liquidity? Your returns depend on the trading volume of the pool. You'll earn a share of the trading fees proportional to your liquidity share. ### Lido on Ethereum: SSV Network Testing V2 URL: https://blog.lido.fi/lido-on-ethereum-ssv-network-testing-v2/ Last updated: 2026-06-04T09:03:42.000Z During April through July, Lido DAO contributors collaborated with the [SSV Network](https://ssv.network/?ref=blog.lido.fi) team and multiple Node Operators for a second round of testing of SSV Network-based Distributed Validators through the Lido Node Operator registry on Goerli. The trial included 46 non-Lido Node Operators consisting of solo stakers, community stakers, and other professional organizations in addition to 10 existing Node Operators using the Lido on Ethereum protocol. This included operators running their SSV Operator through Dappnode, self-hosted servers, via colocation in datacenters, and public cloud. This trial was an expansion of the [first SSV Network integration](https://blog.lido.fi/ssv-network-pilot/) on Goerli that featured eight existing Lido on Ethereum Node Operators. The goals of this round of testing were to trial operating SSV distributed validators through the Lido Node Operator registry with community stakers, and to form a foundation of what an initial limited mainnet application of SSV based DVT may look like. ## Cluster Setup For this trial, participants were separated into 10 clusters of participants. This included four clusters with a 3/4 threshold configuration, two with a 5/7, three with a 7/10, and the first 9/13 threshold cluster to be tested through the Lido registry. Each cluster had a “cluster coordinator”, a member of the cluster responsible for setting up validator keys to split across the SSV key splitter tool and a corresponding multi-sig wallet that served as the entry to the Lido Node Operator register. Of the 10 clusters, 3 clusters were led by existing Node Operators, and the remaining 7 were led by community stakers. The clusters participating in the trial included: Cebu, Four Part Trilogy, Group 3 Avengers, AWD, BlueCrisps, Clusterix, The Magnificent Seven, Group 8, StakeVanguard, Group 10\. Two of the 3/4 threshold clusters were organized to trial an early implementation of a RockX-developed distributed key generation (DKG) ceremony mechanism. Although initially not successful and validators for these clusters were not activated, the testing process surfaced numerous bug fixes and process improvements, and it is estimated that a next round of testing would include successful DKG setups. The remaining eight clusters (shown below) each activated and ran 5 validators. | Cluster Name | Cluster Size | Cluster Makeup | | --------------------- | ------------ | ---------------------------------------------------------- | | Group 3 Avengers | 3/4 | Cluster coordinator: Non-Lido NO 2 Lido NOs2 non-Lido NOs | | AWD | 3/4 | Cluster coordinator: Lido NO 0 Lido NOs4 non-Lido NOs | | BlueCrisps | 5/7 | Cluster coordinator: Lido NO 5 Lido NOs2 non-Lido NOs | | Clusterix | 5/7 | Cluster coordinator: Non-Lido NO 4 Lido NOs3 non-Lido NOs | | The Magnificent Seven | 7/10 | Cluster coordinator: Lido NO 6 Lido NOs4 non-Lido NOs | | Group 8 | 7/10 | Cluster coordinator: Lido NO 5 Lido NOs5 non-Lido NOs | | StakeVanguard | 7/10 | Cluster coordinator: Lido NO 0 Lido NOs10 non-Lido NOs | | Group 10 | 9/13 | Cluster coordinator: Non-Lido NO 0 Lido NOs13 non-Lido NOs | ## Distributed Validator Setup The cluster setup process started with each individual cluster member setting up their SSV Operator following the [SSV operator instructions](https://docs.ssv.network/run-a-node/operator-node/installation?ref=blog.lido.fi#minimum-requirements). Each participant created a brand new SSV operator specific to the trial. Once done, each cluster set up a multi-sig which became the cluster’s entry in the Lido Node Operator Registry on Goerli. When each participant confirmed their operator was active and online, the cluster coordinator for the 8 non-DKG clusters was responsible for generating validator keys, submitting them to the Lido registry, and splitting them across their respective cluster members. At this point validator duties were then handled by each cluster’s distributed SSV operators. Each of the 8 clusters successfully proposed blocks, demonstrated strong attestation performance, and excluding an initial performance issue related to peering, strong uptime. Upon completion of the trial, cluster coordinators were responsible for exiting each validator which proved to be a seamless process. ## Performance Metrics While the setup process of the clusters and operators was mostly smooth, two issues were present at the start of the trial. 1\. Cluster performance for those “greater than 7 operator” clusters was initially poor due to low peer connectivity, resulting in some validators failing to properly attest. The SSV team rolled out a new version (v0.5.4) that solved this issue and validators began properly attesting once all participants had updated their SSV operator software. The second issue was an issue with SSV Validator registration, prohibiting two of the clusters from splitting their keys and registering to the SSV network. An update was rolled out to the SSV registration webapp that solved this issue soon after discovery. For the 60 day sample period that validators were deposited to, the 8 clusters with active validators showed strong performance in-line to slightly above that of other validators run on Goerli per Rated Labs data (note that average validator performance on Goerli is much lower than mainnet), especially when considering only 8 active clusters and a connectivity issue that was subsequently fixed. ![](https://blog.lido.fi/content/images/2023/08/image-1.png) Analysis on validator performance from the 60 day period prior to the last validators exited (following the initial 60 day window above) shows clear improvement in performance without the skew of the initial setup issues. For example, Average Attestation Rate\* improved from 97.44% during the 60 day window to 99.04%. Once cluster setups were completed and operational, the validators maintained strong performance throughout the remainder of the trial. ## Plans for Next Round of Testing The second round of testing SSV based distributed validators was successful, clearly demonstrating the ability to combine solo stakers, community stakers, and professional operators across clusters through the Lido Node Operator Registry on Goerli in a performant manner. In the next round of testing, a more mature DKG mechanism and blinded block support (to enable MEV-boost) are planned for testing. As mentioned in the [follow up post of the Obol Network trials](https://blog.lido.fi/lido-on-ethereum-obol-network-testing-v2/), the Staking Router will potentially allow for new methods of participating in the Lido Node Operator Registry on mainnet in the coming months. Potential methods (subject to a DAO vote) could include limited trials of simple distributed validator configurations on mainnet, more complex modules with native DVT-protocol mechanism integrations, and migration of stake from the single-operator model currently utilized in the Curated Operator Set. The next round of testing is tentatively scheduled for early Q4 with both SSV Network and Obol Network. If you are interested in participating in future Lido on Ethereum DVT testnets, please use [this form](https://forms.gle/die65qgN23fxyRhh6?ref=blog.lido.fi) to express your interest. In the coming months next steps will be announced. ### Lido x SSV Testnet Participants **Group 1**: RockX, DSRV, HashQuark, Cosmostation **Group 2:** Cryptomanufaktur, Simply Staking, Eridian, H2O Nodes **Group 3:** Kukis Global, Allnodes, Ebunker, Cnupy **Group 4:** Anonstake, Astro-Stakers, Wiggyhop, ShardLabs **Group 5:** RockLogic, P2P, Infstones, DSRV, Simply Staking, CVJointOps, Ellipfra **Group 6:** Infstones, HashQuark, Cryptomanufaktur, Allnodes, Foundry Digital, SenseiNode, Cabinet42 **Group 7:** RockX, Kukis Global, P2P, Cryptomanufaktur, Infstones, Eridan, A41, Gateway.fm, ParaFi Capital, Tokenomist **Group 8:** RockX, DSRV, HashQuark, Kukis Global, P2P, Hellman Research, Lydia Labs, OKX Pool, Posthuman, Chainbase **Group 9:** 01node, Chainode, Spacesider, Spire Blockchain, Inc., Swiss Staking, DragonStake, Cypher Core, Anvil Finance, Lanski (Dappnode), Neuler FZCO **Group 10:** Deutsche Telekom, Avaunt Staking, Luganodes, RockawayX Infrastructure, Metanull, Orion, Piconbello OU, Spectrum Staking, Validation Cloud, StakeWithUs Pte Ltd., Swifstaking, Stakeall Finance, Infinite Lux Staking Service ### Additions to Ethereum Node Operator Set - Wave 5 (Stage 1) URL: https://blog.lido.fi/expanding-lidos-ethereum-node-operator-set/ Last updated: 2026-06-04T09:00:57.000Z During July 2023, the Lido DAO voted to accept two new Ethereum node operators to join the Lido on Ethereum Node Operator set. The [Snapshot vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x85ebbe2cb80334c60e160ff267118489e17281046757561e91c5b22dae35e577) to onboard [Launchnodes](https://www.launchnodes.com/?ref=blog.lido.fi) and [SenseiNode](https://www.senseinode.com/?ref=blog.lido.fi) reflects the Stage 1 shortlist that the Lido Node Operator Subgovernance Group (LNOSG) [suggested to the DAO](https://research.lido.fi/t/announcement-onboarding-for-ethereum-wave-5/4809/9?u=kimonsh&ref=blog.lido.fi) following the Stage 1 evaluation meeting. A total of 116 applications were submitted across the two stages of the Lido on Ethereum Wave 5 Onboarding round. During Stage 1, 14 return-applicants that had previously received high scores by the LNOSG evaluation committee re-applied and were evaluated. The LNOSG suggested that two Node Operators be onboarded during Stage 1 to further diversify stake inflows to the protocol, and to consider the remainder of the Stage 1 candidates during the Stage 2 evaluation. The Stage 2 evaluation process is ongoing through the month of August, with another LNOSG evaluation meeting scheduled for the final week of the month. During the first evaluation meeting, the committee discussed onboarding between 7 - 9 new Node Operators across the entire Wave 5 Onboarding round. It is important to note that the LNOSG only suggests the shortlist to the DAO, which has final say to accept, modify, or deny any suggestion the LNOSG presents. ## **Stage 1 Candidates** The two new Node Operators currently participating in the onboarding process will both contribute to the decentralization and distribution of validators of the Lido protocol across a number of factors. Based on their applications these Node Operators are expected to utilize minority Execution Layer and Consensus Layer clients, operate validators out of under-represented geos (Latin America and Africa), and operate their infrastructure out of local data centers. These Node Operators are currently operating through the Lido Node Operator Registry on the Goerli testnet to appropriately configure their infrastructure setups for a mainnet deployment. To learn more about the onboarding process, visit the [Curated Module page on the Lido Node Operator Portal](https://operatorportal.lido.fi/modules/curated-module?ref=blog.lido.fi#:~:text=%F0%9F%A4%9D-,Onboarding%2C%20Lifecycle%20%26%20Business%20Continuity,-To%20date%2C%2039). ### **Launchnodes** [*Launchnodes*](https://www.launchnodes.com/?ref=blog.lido.fi) *provides an orchestration layer that enables enterprises and individuals to solo stake Ethereum at scale, on infrastructure that they own. Founded in 2020, Launchnodes has helped businesses and organizations to run secure, resilient solo staking architectures on bare metal and public cloud. The team consists of experienced builders and engineers, operating globally.* *Working with UNICEF (to pay for school internet connectivity) and Save The Children (funding tablets for refugee camps), Launchnodes has established working examples of Impact Staking initiatives. This involves using staking returns to fund long term social impact in developing countries. A percentage of Launchnodes’ profits will be donated to Impact Staking initiatives.* *Launchnodes will continue to support decentralization across the Ethereum network and Lido ecosystem through its promotion of minority clients and under served geographic locations in Africa and Asia.* *\- Jaydeep Korde, CEO* ### **SenseiNode** [*SenseiNode*](https://www.senseinode.com/?ref=blog.lido.fi) *is the first blockchain infrastructure provider in Latin America, facilitating access to blockchain services with industry-level availability to organizations around the world.* *SenseiNode deploys and manages nodes on leading PoS protocols, relying on distributed infrastructure in local, regional and global hosting providers, increasing decentralization across multiple jurisdictions.* We're thrilled to join Lido. We believe that our diversified infrastructure and presence across multiple jurisdictions will increase Lido’s decentralization, improving the ecosystem resiliency. *\- Pablo Larguia, CEO* ## **Next Steps** Should the on-chain Aragon vote planned for August 8th - 11th pass successfully, both Node Operators would be able to operate mainnet validators as a part of the Lido on Ethereum Node Operator set by the end of August. Node Operators that have applied for the onboarding round should expect to hear back regarding next steps and updates regarding the Stage 2 evaluation process over the coming weeks. The Stage 2 shortlist is expected to be posted to the Lido Research Forum [onboarding thread](https://research.lido.fi/t/announcement-onboarding-for-ethereum-wave-5/4809/9?ref=blog.lido.fi) during the final week of August. ### Lido on Ethereum: Obol Network Testing V2 URL: https://blog.lido.fi/lido-on-ethereum-obol-network-testing-v2/ Last updated: 2026-06-04T09:02:37.000Z Over the past four months, Lido DAO contributors have worked together with the Obol Network team on the second round of testing Obol-based distributed validators (DVs) operated through the Lido Node Operator (NO) registry on Goerli. 42 new Node Operators participated in this round of testing, including solo stakers, community stakers, and other professional node operators, in addition to 12 Node Operators from within the current Curated Node Operator set. This round of testing follows the [first Obol testnet pilot program](https://blog.lido.fi/dvt-pilot-with-obol-network/), which included 11 existing Node Operators that participated in the Lido on Ethereum protocol. The goal of this second testing round was to trial operating DVs through the Lido registry with community stakers and simulate what a practical small-scale initial implementation of DVs utilizing Obol’s technology may look like. Each cluster successfully proposed blocks, showed strong attestation performance, and experienced limited, if any, downtime. Additionally, upon completion of the 59-day trial, all of the clusters successfully exited their validators. ## Cluster Configurations Participants in the testing round were split into 10 different clusters. The clusters consisted of three different types of threshold configurations: three clusters with a 3/4 threshold, four with a 5/7, and three with a 7/10 threshold. The clusters participating in the trial included: Quadforce, Group2 Guardians, Dvt2-g3, Group 4, Group 5 Rangers, SevenNodes, Group 7, Clustery McClusterfaces, Group9 Hunter, and Mostly Harmless. Each cluster had a “cluster coordinator”, a member of the cluster responsible for setting up a corresponding multi-sig wallet that served as the entry to the Lido Node Operator registry and facilitated the Distributed Key Generation (DKG) ceremony. Of the 10 clusters, 7 clusters were led by existing Node Operators, and the remaining 3 were led by community stakers. After arranging the multi-sigs, cluster coordinators began the cluster setup process through the Obol Distributed Validator Launchpad. Each cluster operated 5 validators. | Cluster Name | Cluster Size | Cluster Makeup | | ------------------------------------------------------------------------------------------------------------------ | ------------ | ---------------------------------------------------------- | | [Quadforce](https://goerli.beaconcha.in/dashboard?validators=460480,460488,460489,460498,460499&ref=blog.lido.fi) | 3/4 | Cluster coordinator: Lido NO 3 Lido NOs1 non-Lido NO | | Group2 Guardians | 3/4 | Cluster coordinator: Lido NO 2 Lido NOs2 non-Lido NOs | | Dvt2-g3 | 3/4 | Cluster coordinator: Non-Lido NO 0 Lido NOs4 non-Lido NOs | | Group 4 | 5/7 | Cluster coordinator: Lido NO 5 Lido NOs2 non-Lido NOs | | Group 5 Rangers | 5/7 | Cluster coordinator: Lido NO 4 Lido NOs3 non-Lido NOs | | [SevenNodes](https://goerli.beaconcha.in/dashboard?validators=463068,463069,463070,463071,463072&ref=blog.lido.fi) | 5/7 | Cluster coordinator: Non-Lido NO 0 Lido NOs7 non-Lido NOs | | Group 7 | 5/7 | Cluster coordinator: Lido NO 4 Lido NOs3 non-Lido NOs | | Clustery McClusterfaces | 7/10 | Cluster coordinator: Lido NO 6 Lido NOs4 non-Lido NOs | | Group9 Hunter | 7/10 | Cluster coordinator: Lido NO 5 Lido NOs5 non-Lido NOs | | Mostly Harmless | 7/10 | Cluster coordinator: Non-Lido NO 0 Lido NOs10 non-Lido NOs | ## Distributed Validator Setup ![](https://lh5.googleusercontent.com/96QNRfR6NmMqvbssrn_sc3pnpyA8HAI_bmXZjaGTBYcm_Fpkf2Uz_xNDHVKHG5gLHGAkciWOVYqDvwsLzCRuUfGtoMEEQiYMF5BrMuOevqPWbzR_JhI6vDllj2aXnHXcUtMX3ZEWOPd78kwQZuJEc5w) Clusters were configured to match the appropriate cluster threshold size and set to generate 5 validator keys through Obol’s DKG implementation. This differed from the [first Obol trial](https://blog.lido.fi/category/node-operator/) where the two clusters only spun up a single validator per cluster. The validators were configured to use the Lido protocol Goerli Withdrawal Address and Fee Recipient address to ensure Execution Layer Rewards would flow to the EL Rewards vault as done on mainnet. ![](https://lh6.googleusercontent.com/pgYGYOY_GvHeDl7NkfTnUoksVRkvjm4sYxuT0lWJBepDPG9pMTW2nE4p-7bdrO0YTadrx99hg5dxnxa0Lz8VB7vaetYBX1gUFSM2aLmelmLEMNdlmMPfOsAcRLuUMLjdcokOke1MWbvxTEK5N6S3-mo) Obol’s implementation of DKG currently happens in a semi-synchronous manner. Once all clients in the cluster can establish a connection with one another and they each complete a handshake, the DKG is completed. During the initial ceremony attempts, clusters ran into a series of bugs as they attempted to execute the DKG. The Obol team quickly worked with the affected participants to rectify the issue and within days released v0.14.4, solving the issue and leading to successful DKG ceremonies for all 10 clusters. Following the successful completion of the DKG ceremonies, the cluster coordinators submitted the deposit data for their 5 validators to the Lido registry. This was then verified by other members of the multi-sig and a motion to increase the clusters validator limit to 5 soon followed. Upon completion, deposits began to flow to the validators and they began attesting. In the days that followed however, another issue was identified related to unsuccessful block proposals across clusters. The Obol team identified two issues that were causing missed proposals: 1\. High bandwidth needs of the Obol wire format and 2\. a change in the latest Teku image that asked for blocks in SSZ format before JSON format (SSZ was not supported by Charon at this time). Over the next few days, Obol released v0.15.0, which introduced a more compressed format with lower bandwidth requirements as well as support for SSZ proposals. The v0.15.0 upgrade fixed the issues with block proposals and during the next two weeks each of the 10 clusters successfully completed at least one block proposal. Following the v0.15.0 upgrade no further issues with block proposals were identified. Following successful operation of the clusters for the trial period (59 days), on the week of 5/21/23, the Lido x Obol clusters began to exit validators which proved to be a simple and efficient process. Cluster members broadcast partial signed exit messages to the other members of their clusters. When the cluster threshold was reached, the message was broadcast to the network and the validators successfully exited. Upon completion of the trial, an internal competition was held between clusters to create a digital collectible that all members of the 2nd round of Lido x Obol DVT testing would receive. The following design from cluster “Dvt2-g3" was chosen as the winner of the competition. ![](https://blog.lido.fi/content/images/2023/07/v2_1500x1500_-_Jeonghwan_Park.png) Obol’s DVT implementation has made tremendous progress since the last round of testing; however, there are still a few features needed to run at scale in a Lido based implementation. Among these, support for blinded blocks (to enable MEV-boost support), the ability to add more validators to an existing cluster, and supporting validator exits across all Consensus Layer clients will be important features to test before scaled roll-outs of Obol based DVs begin. ### Performance Stats During the 59 day period that validators were online, the 10 clusters showed performance metrics generally in-line to slightly above that of other validators run on Goerli per Rated Labs data (note that average validator performance on Goerli is much lower than mainnet). The high number of blocks missed during the trial are a result of the issues described above, which were resolved by the v0.15.0 upgrade. ![](https://blog.lido.fi/content/images/2023/07/image.png) ## Next Round of Testing & The Future of Lido DVT-powered Validators With the successful implementation of Lido V2, focus is now shifting to the opportunities provided by the Staking Router. Introduced in Lido V2, the Staking Router will allow for the modularization of the Lido protocol and provide new mechanisms through which Node Operators can run validators for the protocol. Potential modules include permissionless entry, DVT based modules, Validators as a Service, mixes of the aforementioned, etc. A diverse set of teams, including Obol Network, SSV Network, Dappnode, Avado, and others, are engaging with the Lido community to explore creating new methods for a new Node Operators to use the lido protocol. From a DVT perspective, potential methods of participation (which would need to be assessed and voted on by the DAO first) could include limited trials of simple DV configurations on mainnet, more complex modules with native DVT-protocol mechanism integrations (including e.g. unique onboarding methods and economics), and migration of stake from the single-operator model currently utilized in the Curated Operator Set. As these possible mechanisms are being investigated, further testnet activities will be happen. For Q3, there is definite community interest to see onboarding of additional non-existing Node Operators to DVT testnets, running DVT testing with all existing NOs, and trialing DVs in a secondary module on the Goerli testnet. If you are interested in participating in future Lido on Ethereum DVT testnets, please use [this form](https://forms.gle/die65qgN23fxyRhh6?ref=blog.lido.fi) to express your interest. In the coming months next steps will be announced. A number of important initiatives related to DVT and Community Staking are underway. If you are interested in becoming more involved in the Lido Community, see initiatives such as the[ Lido Community Lifeguards](https://research.lido.fi/t/lido-community-lifeguards-initiative/4678/14?ref=blog.lido.fi) or send an email to [nom@lido.fi](mailto:nom@lido.fi) to explore other ways you can use and participate in the protocol. Stay tuned to the Lido blog in the coming weeks for another blog post detailing the second round of testing with SSV Network and additional details about future Lido DVT testnets. ### Lido x Obol Testnet Participants: **Group 1**: HashQuark, DSRV, Stakely, Conqueror **Group 2:** Kukis Global, Simply Staking, Mav3rick, SenseiNode **Group 3:** Mahof, Cosmostation, GraphOps, Amonxx **Group 4:** Cryptomanufaktur, Chorus One, Everstake, Blockscape, Nethermind, Luganodes, Erkan Efe **Group 5:** Staking Facilities, Stakely, Kukis Global, Everstake, A41, Bellatora.co, D-Stake **Group 6:** SenseiNode, Spacesider, Wallclimbr, Ugur | NodesKuge, Imperator.co, Secard, Kyne Software **Group 7:** Chorus One, DSRV, Blockscape, P2P, Minivipers, P-OPS Team, alkadeta **Group 8:** HashQuark, Simply Staking, Nethermind, Kukis Global, Staking Facilities, Cryptomanufaktur, Archimedes, H2O Nodes, Coinstamp, Talha **Group 9:** Chorus One, DSRV, P2P, HashQuark, Everstake, Emre NOP, Farukyasar, Polkachu, wabut.club, Staking4all **Group 10**: Luke, Eridian, Furkan Efe, NakoTurk, Obol Ar Line, Smart Node Capital, Sodiumstar, Swiss Staking, Yesaynow, Piconbello ### Post Mortem: Delayed Oracle Report (April 8, 2023) URL: https://blog.lido.fi/post-mortem-delayed-oracle-report/ Last updated: 2023-07-05T09:39:33.000Z ## Intro On 8th of April 2023 the Oracle report finalisation had been made 6 hours later than usual \~12pm UTC. The delay had been caused by the occurence of an edge-case with a report slot being missed on the Consensus Layer, preventing the software from collecting the data. The urgent fix for the said edge-case had been prepared by the Lido Contributors, allowing the Oracle holders to finalize the report after the software upgrade. No user tokens had ever been at risk, and the offchain code for the Oracle for the now-running Lido V2 upgrade works with said edge-case correctly. ## Why Did It Happen? To generate the report, the oracle code must coordinate the gathering of data from CL (Consensus Layer) and EL (Execution Layer) nodes. Specifically, the Oracle requires information about the EL block corresponding to a particular CL slot. However, on April 8th, 2023, the particular “report slot” had been missed, thus no EL block was present related to slot. The offchain oracle was not equipped to handle this edge-case, so the report couldn’t have been collected. ![](https://hackmd.io/_uploads/ryiGVw-Y3.png) ## How Did We Fix It? On the same day Lido Contributors have released an update for the offchain Oracle including the fix for the said edge-case. Oracle holders checked the release code and updated offchain Oracles. The updated code now appropriately addresses situations where slots are missed. In such cases, the code iterates backwards through the slots until it identifies a slot that had been successfully validated. The said edge-case handler is implemented in the currently running offchain Oracle for Lido V2. ## Incident Recap (All times in UTC, 08 Apr 2023) - **12:41**: alert in tg groups on Oracle report overdue by 15m. - **12:47**: incident zoom call gathered, debugging started. - **13:00**: diagnosed the issue with missed slot & no code for handling it; started preparing the fix. - **13:11**: sent heads-up and started gathering Oracle members quorum for updating. - **13:29**: gathered pre-commitments from 5 Oracles. - **13:44**: [tweets on delayed report sent](https://twitter.com/LidoFinance/status/1644697839723839492?ref=blog.lido.fi). - **16:17**: [build](https://hub.docker.com/layers/lidofinance/oracle/2.6.1/images/sha256-d63317ece906c311135d8ffb33bc2894c1e5b303d1181fe563a6dbf030c646b3?context=explore&ref=blog.lido.fi) ready, tested & shared with Oracles. - **16:43**: last tx for the report is in, report finalised. - **21:09**: [tweets on successful report are sent](https://twitter.com/LidoFinance/status/1644749250629124106?ref=blog.lido.fi). ## Useful Links - [Missed slot](https://beaconcha.in/slot/6177600?ref=blog.lido.fi) - [Hotfix PR](https://github.com/lidofinance/lido-oracle/pull/348/files?ref=blog.lido.fi) - [Successful report transaction](https://etherscan.io/tx/0x434eae34056ed2a8faa6faa950de8c8d2d03f7110f5a98fba7cc066e6ce6e0c3?ref=blog.lido.fi) - [About Accounting Oracle](https://docs.lido.fi/guides/steth-integration-guide?ref=blog.lido.fi#accounting-oracle) ### Lido on Ethereum VaNOM - Stake Allocation & Distribution URL: https://blog.lido.fi/lido-ethereum-stake-allocation-distribution/ Last updated: 2026-03-06T12:45:58.000Z [Six months ago](https://blog.lido.fi/lido-vanom-validator-node-operator-metrics-release/), the release of [VaNOM](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi) allowed for easier understanding and comparison of Lido on Ethereum’s node and validator set metrics. The initial version of VaNOM focused on geographical, infrastructural, client, and jurisdictional diversity. With [Lido V2 now live on the Ethereum mainnet](https://blog.lido.fi/lido-v2-launch/), the advent of the Staking Router and upcoming modules will likely lead to substantial changes in the Node Operator set, both in terms of the absolute number of independent node operators participating in the Lido on Ethereum protocol, but also in terms of how stake is distributed across the set. With the Q1/23 release of [VaNOM](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi), information regarding the distribution of stake across the set will play a more prominent role, and hopefully serve to guide the DAO in its decision-making around things like operator onboarding, module assessments, and future staking infrastructure collaborations. Additionally, starting from this quarter, [Lido on Polygon's node and validator set metrics](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/5e5aeb1c-601d-4e83-840e-27848fbcabde/latest?ref=blog.lido.fi) are also published in the report. The expansion of reporting to other networks reflect Lido's commitment to increased transparency and accountability. As of end of March '23, **6 node operators** participate in Lido on Polygon, **and an average of 16.67% of stakes are delegated to each node operator**. Validators perform well above Polygon Performance Benchmark as well as comparing to the average over polygon network. ![](https://blog.lido.fi/content/images/2023/05/image.png) Polygon Validator Performance ## Stake Allocation Well-distributed stake allocation is important and desirable because it can help improve a network's security, decentralization, and overall reliability. When stake is concentrated amongst too few operators, there may be increased network impact due to severe outages, or risk of them acting maliciously or colluding, which could endanger the network. On the other hand, more evenly allocated stake reduces the risk of such events, especially as the number of operators in the set grows, and strengthens the network's overall resilience. Additionally, it allows for a more diverse and inclusive community of operators, promoting decentralization and ensuring that the network remains accessible to a wider range of participants. The Lido on Ethereum stake allocation algorithm allocates new stake deposits to operators with the least amount of active validators (assuming the operator has available keys). This effectively allows operators with less keys to catch up to operators with higher amounts of keys as new stake flows in, and gradually balances stake distribution over time. Since the most recent Lido on Ethereum onboarding round in summer ‘22, the latest onboarded cohort is now running a similar amount of validators as operators onboarded earlier. Most NOs operate 5000-7500 validators. ![](https://blog.lido.fi/content/images/2026/03/data-src-image-bf8092eb-f246-4e14-876f-a93d646e8e8e.png) ## Stake Distribution Following the launch of Lido V2, stETH withdrawals have now been enabled. This will help improve stake distribution across the node operator set, as the algorithm to make ETH available for withdrawals (if necessary) will prioritize exiting validators (keys) from operators with more active keys while still allocating new deposits to operators with less validators. In the 2023/Q1 reported data, VaNOM now more clearly depicts intra Lido on Ethereum stake distribution metrics, namely: - Number of Node Operators - Number of validators per Node Operator - Soft-target 1% threshold market - Stake distribution equality metrics (Gini coefficient and Herfindahl-Hirschman Index (HHI)) To quantify stake distribution two commonly used indicators, the Gini coefficient and Herfindahl-Hirschman Index (HHI), were considered. Additional indicators, such as the Nakamoto coefficient, will be considered for inclusion in the future. **The Gini coefficient is a statistical measure of dispersion of distribution, and ranges from 0-1, the lower the value the more equally the shares are distributed.** It is a relative measure between participants in the pool. **The HHI is a measure of market concentration that is commonly used to evaluate the level of competition within a market.** A higher the value indicates higher concentration. ![](https://blog.lido.fi/content/images/2023/05/Screenshot-2023-05-19-at-11.21.52.png) As can be noted in the above diagram, based on the Gini score and HHI score, stake distribution amongst the node operator set can be considered well balanced. Additionally, one can observe that the distribution has improved (i.e. become better dispersed) throughout the lifetime of the protocol. Although the stake distribution is pretty equal, some operators are running more than 1% of soft-target as described in Lido scorecard, which would indicate that it would be beneficial to onboard additional Node Operators, something already being discussed on the [Lido community forum](https://research.lido.fi/t/inquiry-next-onboarding-round-for-lido-eth/4605/2?ref=blog.lido.fi). Node operators participating in Lido on Ethereum are committed to making improvements in Client diversity - both on Consensus Layer and Execution Layer. On the Consensus Layer, the shares of minority clients have consistently improve over time. ![](https://blog.lido.fi/content/images/2023/05/image-1.png) For Execution Layer clients, non-Geth implementations have stabilized post-Merge, and many performance improvements have also been made, so Node Operators have also been re-emphasizing the need to also diversify in this regard as well. But, there is still progress to be made. ![](https://blog.lido.fi/content/images/2023/05/image-2.png) ## Considerations When considering these metrics, it should also be taken into account that the total number of Node Operators is currently 29 and the set is permissioned. As the future of the [Lido on Ethereum protocol unfolds with V2](https://blog.lido.fi/introducing-lido-v2/), and new staking router modules are likely introduced empowering a wide swathe of new operators to join, it could be expected to see big changes in these metrics. Dispersion metrics tend to skew as the number of participants increases, especially in permissionless systems. Thus, the tracking of a multitude of decentralization metrics (number of operators, distribution of stake, diversity of operator setups) and being able to provide analysis around their evolution will be crucial in understanding the decentralization journey of the Lido on Ethereum protocol. ### Lido V2 Mainnet Launch URL: https://blog.lido.fi/lido-v2-launch/ Last updated: 2023-09-25T09:51:06.000Z ## **V2 Upgrade / Ethereum Withdrawals are Live** Following a successful on-chain vote, Lido V2 is officially live on Ethereum mainnet. As the most important upgrade to the Lido protocol to date, Lido V2 significantly improves the [Ethereum staking](https://lido.fi/ethereum?ref=blog.lido.fi) experience whilst pushing the Lido protocol further down the road towards increased protocol decentralization. Lido V2 introduces two major components, with the most user-facing aspect being [Ethereum withdrawals](https://blog.lido.fi/ethereum-withdrawals-overview-faq/). This allows Ethereum stakers with Lido to directly unstake ETH through the protocol. To try out Ethereum withdrawals on Lido, visit [stake.lido.fi/withdrawals](https://stake.lido.fi/withdrawals/request?ref=blog.lido.fi). For additional information on the withdrawal process, visit the [Lido Help Centre](https://help.lido.fi/en/collections/3993867-ethereum-withdrawals?ref=blog.lido.fi). ## What is Lido V2? The Lido V2 upgrade brings a host of exciting new features to the platform with two key focal points: - **Withdrawals**: The Lido on Ethereum protocol upgrade allows Lido on Ethereum stakers to burn their stETH and exit the protocol at a 1:1 ratio, achieving a key milestone of an open on/off ramp into the Ethereum staking ecosystem. - **Staking Router**: The new modular architectural design allows for the development of on-ramps for new Node Operators, ranging from solo stakers to DAOs and Distributed Validator Technology (DVT) clusters. This will create a more diverse validator ecosystem. The upgrade implemented several other changes, with the most notable being a significant rewrite of the Oracle smart contract and off-chain daemon software. This was required to support the withdrawals functionality and enable an order of magnitude more Node Operators. For more information on Lido V2, check out [Introducing Lido V2](https://blog.lido.fi/introducing-lido-v2/). ## Ethereum Withdrawals With Lido Most notably, Lido V2 adds functionality for in-protocol ETH withdrawals. As an extension of the recent [Ethereum Shapella Upgrade](https://blog.lido.fi/ethereum-shapella-overview-faq/), withdrawals streamline the Lido staking experience and allow users to unstake their ETH directly from the Lido protocol. This lowers a number of previous inconveniences surrounding the Lido on Ethereum staking experience and allows for a more efficient use of Lido’s staked ETH throughout the Ethereum DeFi ecosystem. [](https://stake.lido.fi/withdrawals?ref=blog.lido.fi) For additional information on the Ethereum withdrawal process, see below: - [Ethereum Withdrawals: Overview + FAQ](https://blog.lido.fi/ethereum-withdrawals-overview-faq/) - [Lido Withdrawals: Help Centre](https://help.lido.fi/en/collections/3993867-ethereum-withdrawals?ref=blog.lido.fi) - [Just How Fast Are Ethereum Withdrawals Using Lido?](https://blog.lido.fi/just-how-fast-are-ethereum-withdrawals-using-the-lido-protocol/) ## V2 Security To ensure confidence, Lido V2 underwent multiple security audits, including Sigma Prime auditing the updated dc4bc version, ChainSecurity auditing the Staking Router code, and audits by Oxorio, Statemind, HEXENS, MixBytes(), and Certora. This protocol upgrade made Lido on Ethereum feature-complete by allowing stETH to Ether withdrawals and opened up opportunities for experimentation and collaboration with the Staking Router architecture. > Join us Friday 14pm UTC to talk all safety measures around Lido V2 upgrade: > > \- What's being done to make sure the upgrade is safe to perform. > \- Audits update. > \- Safety checks & emergency triggers. > \- General security Q&A. > > Hope to see you there 🏝[https://t.co/2l6gLGL6Qi](https://t.co/2l6gLGL6Qi?ref=blog.lido.fi) > > — Lido (@LidoFinance) [April 19, 2023](https://twitter.com/LidoFinance/status/1648764218936549391?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) ## What’s Next? We're thrilled to share the progress of Lido V2 with our community, and we look forward to seeing how these new features will enhance the staking experience for our users. As always, we remain committed to providing a secure and reliable protocol for staking ETH, and we're excited to continue building on this foundation in the months and years to come. To learn more about the V2 upgrade and its features, check out our [Introduction to V2](https://blog.lido.fi/introducing-lido-v2/), which provides a detailed overview of the V2 protocol changes. For any questions, stop by the [Lido Discord](https://discord.com/invite/lido?ref=blog.lido.fi). ## Documentation - [Blog: Introducing Lido V2](https://blog.lido.fi/introducing-lido-v2/) - [Blog: Withdrawals Overview + FAQ](https://blog.lido.fi/ethereum-withdrawals-overview-faq/) - [Help Centre: Ethereum Withdrawals](https://help.lido.fi/en/collections/3993867-ethereum-withdrawals?ref=blog.lido.fi) - [Security: V2 Audit Reports](https://github.com/lidofinance/audits/?ref=blog.lido.fi) - [Security: V2 Bug Bounty](https://immunefi.com/bounty/lido/?ref=blog.lido.fi) ### Lido on Ethereum Withdrawals: Guide & Frequently Asked Questions URL: https://blog.lido.fi/ethereum-withdrawals-overview-faq/ Last updated: 2023-09-12T05:24:14.000Z With the launch of Lido V2, Ethereum stakers with Lido now have access to direct, in-protocol stETH:ETH withdrawals allowing for seamless unstaking of stETH and wstETH. Made possible through the recent [Ethereum Shapella Upgrade](https://blog.lido.fi/ethereum-shapella-overview-faq/), withdrawals work to streamline the Lido on Ethereum staking experience and minimize a number of uncertainties surrounding the staking experience. Below we answer some of the most important questions related to Ethereum withdrawals with Lido. In case of any other questions, stop by the [Lido Telegram](http://t.me/lidofinance?ref=blog.lido.fi)! ## Ethereum Withdrawals - Frequently Asked Questions ### What are Ethereum withdrawals? Withdrawals allow users to unstake their stETH/wstETH. In return, stETH holders receive ETH at a 1:1 ratio in most cases while wstETH ones receive ETH based on the wstETH/stETH ratio when they unstake. ### How does the withdrawal process work? The withdrawal process is simple and has two steps: 1. Request: Lock your stETH/wstETH by issuing a withdrawal request. ETH is sourced to fulfill the request, and then locked stETH is burned, which marks the withdrawal request as claimable. Under normal circumstances, this can take anywhere between 1-5 days. 2. Claim: Claim your ETH after the withdrawal request has been processed. ### How do I withdraw? Visit [stake.lido.fi/withdrawals](https://stake.lido.fi/withdrawals?ref=blog.lido.fi) and press the [‘Request’ tab](http://stake.lido.fi/withdrawals?ref=blog.lido.fi). Choose an amount of stETH/wstETH to withdraw and press ‘Request withdrawal’. Confirm the transaction using your wallet and press ‘Claim’ on the [‘Claim’ tab](http://stake.lido.fi/withdrawals?tab=claim&ref=blog.lido.fi) once it is ready. ### Can I transform my stETH/wstETH to ETH? Yes. You can transform your wstETH to ETH using the ‘Request’ and ‘Claim’ tabs. Note that, under the hood, wstETH will unwrap to stETH first, so your request will be denominated in stETH. ### When I try to withdraw wstETH, why do I see the stETH amount in my request? When you request to withdraw wstETH, it is automatically unwrapped into stETH, which then gets transformed into ETH (this is the step that takes time). The main withdrawal period is when stETH is transformed into ETH. That's why you see the amount pending denominated in stETH. ### How long does it take to withdraw? Under normal circumstances, the stETH/wstETH withdrawal period can take anywhere between 1-5 days. After that, you can claim your ETH using the ‘Claim’ tab. See here for more insights into the [Ethereum withdrawal speeds using Lido](https://blog.lido.fi/just-how-fast-are-ethereum-withdrawals-using-the-lido-protocol/). ### What are the factors affecting the withdrawal time? - The amount of stETH in the queue. - Performance of the validator poolside. - Exit queue on the Beacon chain. - Demand for staking and unstaking. ### What is the Lido NFT? Each withdrawal request is represented by an NFT: the NFT is automatically minted for you when you send a request. You will need to add it to your wallet to be able to monitor the request status. When the request is ready for the claim, the NFT's image will be updated. For a full [Ethereum Withdrawal FAQ](https://help.lido.fi/en/articles/7858292-faq-ethereum-withdrawals?ref=blog.lido.fi), please refer to the [Ethereum Withdrawals](https://help.lido.fi/en/collections/3993867-ethereum-withdrawals?ref=blog.lido.fi) collection on help.lido.fi. ## Staking Ethereum Using Lido Ethereum staking lets you contribute to the long-term security and decentralization of the Ethereum network, bringing you daily staking rewards in the process. Join a global community of stakers and put your ETH to work. With one-click staking, daily rewards and industry-leading fees, Lido provides the most popular staking experience in the industry. Visit [lido.fi/ethereum](https://lido.fi/ethereum?ref=blog.lido.fi) to get started 🏝️ ### Post Mortem: Lido on Ethereum RockLogic GmbH Slashing Incident URL: https://blog.lido.fi/loe-rocklogic-gmbh-slashing-incident/ Last updated: 2023-10-12T11:37:38.000Z ## Incident Summary and Root Cause At 13:02 UTC on April 13, Lido DAO contributors alerted the RockLogic GmbH (“RockLogic”) Node Operator participating in the Lido on Ethereum protocol of a slashing event taking place affecting 11 of the validators that they operate. A full list of the validators impacted is provided in [APPENDIX B](#appendix-b) below. **Update: The RockLogic slashing-burn omnibus will commence on the week beginning the 20th of June.** Over the course of the next two hours, the affected cluster was brought offline to mitigate potential further risk, and the RockLogic team successfully identified the root cause. The cause of the slashing boiled down to the duplication of validator keys in two different active clusters; this caused a double vote, which led to attester slashings of 11 validators. A full post mortem from their perspective is available in [APPENDIX A](#appendix-a) below. A full timeline of the incident can be found in section “4\. Timeline” below. On April 11th, a cluster (A) of 500 validator keys experienced an outage following an Execution Layer (EL) client database corruption and the keys were subsequently failed over to a new cluster (B). This was done by removing the keys from the initial cluster (A) and re-importing into an existing cluster (B) of another 500 keys. While RockLogic did not fully shut down or completely wipe cluster A, which would have made double-signing impossible, they relied on strong evidence that the deletion actions had worked as intended (confirmation of deletion of keys and re-querying the key manager later). The EL client on cluster A was restored on April 12th, and at the time no slashing occurred, which proved that the keys had been successfully removed from the cluster. However, following an update to the BN+VC clients (Prysm) of cluster A (on April 13th), a restart of the clients was performed which caused an unexpected re-import of the deleted validator keys and led to the 11 validator slashings beginning in epoch 194182 and ending in epoch 194183\. On April 14th, Preston van Loon from Prysmatic Labs was instrumental in conducting a speedy and thorough investigation of the root cause together with the RockLogic team. **The cause of the misleading confirmation of key deletion and subsequent unexpected re-import has been confirmed by Prysmatic Labs to be a bug** (as evidenced in [issue 12281](https://github.com/prysmaticlabs/prysm/issues/12281?ref=blog.lido.fi) of their code repository). *(EDIT Apr 21: this bug has been addressed and fixed as of [Prysm v4.0.3](https://github.com/prysmaticlabs/prysm/releases/tag/v4.0.3?ref=blog.lido.fi))* The incident began at 12:50 UTC and was resolved (by bringing the remaining non-slashed validator keys back online) at 15:30 UTC. As of 10:56 UTC on April 14, 2023, current total penalties amount to 11.1945 ETH (including offline penalties for the entire cluster deactivated during investigation). As the 11 slashed validators continue to incur penalties before their scheduled withdrawal on May 20th, total penalties and missed rewards when the slashed validators become withdrawn, and including downtime penalties of the cluster, are projected to be \~13.77 ETH. ## Impact The impact on stakers (stETH holders) from a penalties and missed rewards perspective is analysed below: | Description | Amounts | | ----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Initial slashing penalties | Penalties: 11 ETH(Actual) (1 ETH penalty per validator slashed) | | Additional slashing penalties (i.e. due to correlated slashing multiplier) | 0\*\* Projected. No additional slashing penalties expected, as thousands of additional validators would need to be slashed within the correlated 36-day period to trigger a penalty of 1 ETH per validator. | | Slashing-subsequent validator duty inactivity penalties and missed rewards (attestations) | Attestation penalties\*: 0.8276 ETHMissed Rewards:Attestation penalties\*: 0.8276 ETHMissed head vote rewards: 0.2896(\*Projected. Assuming Projected base reward 474\. Attestation penalty \~9183.75 gwei, Attestation reward \~12798 gwei. Slashing Vector 8192 epochs, incurred until the validators become withdrawable on the Beacon Chain) | | Slashing-subsequent validator duty inactivity penalties (missed proposals and/or sync committees) | Missed proposal rewards\*: 0.362 ETH Sync committee penalties / rewards: N/A\*\*\*Projected. Unlikely estimate that at each validator makes within the 36d (avg proposal reward for 2w = 32,927,752 Gwei)\*\* See “interesting edge case” note in “[Other Penalties](https://eth2book.info/bellatrix/part2/incentives/slashing/?ref=blog.lido.fi#other-penalties)”) | | Slashing-subsequent inactivity leak | 0\*\* Projected. There is no inactivity leak expected as the network is not having issues finalising. | | Penalties and missed rewards of the associated cluster de-activated during the Slashing investigation | Penalties: 0.1742 ETHMissed rewards: 0.2974 ETH | Compared to the average daily protocol rewards which accrue to stETH holders, **the total projected impact of 13.77 ETH is \~2.4% of daily rewards, or 0.0023% of total protocol TVL as at the time of writing.** ## Resolution Following the incident, RockLogic shut down the cluster of 1000 validators to ensure no further slashing could take place. Upon further analysis, RockLogic deleted the Consensus Layer client (Prysm) to remove any potential stored key data, queued/buffered messages, and node data. Over the following hours, RockLogic reactivated the remaining 989 validators successfully without any further slashing event taking place. Regarding possible compensation, RockLogic requested that the Lido DAO utilise its [cover fund](https://etherscan.io/address/0x8B3f33234ABD88493c0Cd28De33D583B70beDe35?ref=blog.lido.fi) to compensate stakers for damages and lost rewards. This decision was finalised and enacted on June 30th 2023 through an on-chain vote. - Forum post: [research.lido.fi/t/slashing-incident-involving-rocklogic-gmbh-validators-april-13-2023/4399/13?u=izzy](https://research.lido.fi/t/slashing-incident-involving-rocklogic-gmbh-validators-april-13-2023/4399/13?u=izzy&ref=blog.lido.fi) - Snapshot vote: [snapshot.org/#/lido-snapshot.eth/proposal/0x78bbc81011457ffcc0d2183de2a813869708d4f9996f4af3df8b669510950cf3](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x78bbc81011457ffcc0d2183de2a813869708d4f9996f4af3df8b669510950cf3) - Onchain vote to utilize funds from cover fund and burn them (thereby compensate stakers): [vote.lido.fi/vote/160](https://vote.lido.fi/vote/160?ref=blog.lido.fi) ## Timeline | April 13, 13:02 UTC | Lido contributor observes validator slashings taking place on the Ethereum network and begins investigation. | | ------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | April 13, 13:03 UTC | Confirmed by Lido contributor that the slashing involves validators operated by the Node Operator RockLogic GmbH as a part of the Lido on Ethereum protocol. | | April 13, 13:04 UTC | Lido contributor notifies RockLogic of a slashing event taking place for the validators they operate. | | April 13, 13:05 UTC | RockLogic acknowledges the issue. | | April 13, 13:06 UTC | Confirmation that 11 validators in total have been slashed. | | April 13, 13:09 UTC | A call is held to diagnose and explore remediation of the issue. | | April 13, 13:15 UTC | RockLogic team describes the series of events from their perspective. The cluster of 1000 validators (of which the 11 slashed were included) is shut down out of caution while RockLogic investigates the root cause. The cluster of 1000 validators includes 500 (Cluster A) which had been imported into Cluster B on April 11 as a failover due to a corrupted Nethermind database. | | April 13, 13:15-14:00 UTC | Additional analysis of the situation by the RockLogic team to determine potential next steps. | | April 13, 13:28 UTC | Communication is shared via the @Lidofinance twitter account notifying the community of a slashing event. | | April 13, 14:00 UTC | RockLogic deletes the Consensus Layer clients (BN+VC) (Prysm) to remove any stored key data, queued/buffered messages, and node data. | | April 13, 14:05 UTC | RockLogic reinstalls the Consensus Layer and Beacon Node and re-syncs utilising checkpoint sync from another RockLogic-operated node. | | April 13, 14:07 UTC | RockLogic imports the validator keys for 50 validators corresponding to the affected cluster (Cluster A). | | April 13, 14:20 UTC | Three consecutive epochs of successful attestations are observed for the 50 validators with no additional slashings observed. An additional 50 validators are imported from Cluster A. | | April 13, 14:26 UTC | Successful attestations are observed for the 2nd batch of 50 validators across multiple epochs. | | April 13, 14:34 UTC | An additional 200 validators are re-activated from Cluster A and successfully attest. | | April 13, 14:54 UTC | Final 200 validators from Cluster A are re-activated and successfully attest. | | April 13, 15:10 UTC | First 100 validators of Cluster B (500 total) are reactivated and successfully attest. | | April 13, 15:30 UTC | Remaining 400 validators of Cluster B are reactivated and successfully attest. Incident is considered remediated as the 11 validators are confirmed to be slashed and non-recoverable, and the remaining validators in the associated clusters have been brought online successfully and correctly. | | April 14, 16:40 UTC | Following retrieval of logs from the nuked system by the RockLogic team and extensive testing, the issue was reproduced in a test environment and Prysmatic Labs joined to help further debug. | ## Action Items - RockLogic will continue to work closely with Prysmatic Labs to assess the proposed fix to the issue identified and roll out the fix on relevant setups, and coordinate with other Node Operators. - Node Operators participating in the Lido on Ethereum protocol will review setup to ensure doppelganger protection is utilised where possible, key migration implementations / activities are thoroughly checked, and additional precautions are taken when key migrations are performed (e.g. total wipe of initial cluster). ## APPENDIX A ### **RockLogic GmbH Incident Report** ### 1\. Timeline | 11\. 04\. - 7:30 UTC | 500 Offline Vals | The Corruption of a Nethermind Database caused 500 Validators to be offline, so the NO migrated the keys onto another machine. (remove keys from cluster A and import keys into cluster B) | | ------------------------------ | -------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | 11\. 04\. - 9:30 UTC | Resync Nethermind | The resync of nethermind was initiated to get a backup-node up. | | 12\. 04\. - late morning | est. time of Nethermind finish syncing | At this point Nethermind should definitely finish syncing. If the keys were not removed, it would have started staking right away. | | 13\. 04\. 12:27 UTC | Update Prysm | Prysm Docker image was updated from 4.0.1 to 4.0.2 for Consensus and Validator Client. The containers were restarted afterwards to apply the update. | | 13\. 04\. 12:50 UTC | First slashings | Slot 6213852 with the first 2 slashings | | 13\. 04\. 1:13 UTC | Shutdown VC | Shutdown of the Prysm validator of the node that was causing the slashing. | | 13\. 04\. couple minutes later | Nuke node | Complete vanish of the node that caused the slashing. | ### 2\. Root Cause The root cause was double votes of validators imported on 2 different nodes. This duplication was due to an image version update followed by a reboot of Consensus and Validator Client (Prysm) to apply the update (4.0.1 -> 4.0.2). It seems that this process caused some kind of re-import of the previously deleted keys. However, nuking the node beforehand would have prevented this issue in the first place. ### 3\. Action Points - Further investigations to verify the root cause of the key re-import. - Expand internal monitoring - Security checks of client configurations (eg. doppelgänger is enabled) - Documented and clear instructions for the migration of keys. ## **APPENDIX B** ### **Slashed validators** | Validator | Time | Slot | Epoch | | ----------------------------------------------------------------------------------------------- | ---------------------- | ------------------------------------------------------------- | ------------------------------------------------------------ | | [https://beaconcha.in/validator/459890](https://beaconcha.in/validator/459890?ref=blog.lido.fi) | April 13, 12:51:47 UTC | [6213857](https://beaconcha.in/slot/6213857?ref=blog.lido.fi) | [194183](https://beaconcha.in/epoch/194183?ref=blog.lido.fi) | | [https://beaconcha.in/validator/459098](https://beaconcha.in/validator/459098?ref=blog.lido.fi) | April 13, 12:51:35 UTC | [6213856](https://beaconcha.in/slot/6213856?ref=blog.lido.fi) | [194183](https://beaconcha.in/epoch/194183?ref=blog.lido.fi) | | [https://beaconcha.in/validator/459140](https://beaconcha.in/validator/459140?ref=blog.lido.fi) | April 13, 12:51:35 UTC | [6213856](https://beaconcha.in/slot/6213856?ref=blog.lido.fi) | [194183](https://beaconcha.in/epoch/194183?ref=blog.lido.fi) | | [https://beaconcha.in/validator/459225](https://beaconcha.in/validator/459225?ref=blog.lido.fi) | April 13, 12:51:23 UTC | [6213855](https://beaconcha.in/slot/6213855?ref=blog.lido.fi) | [194182](https://beaconcha.in/epoch/194182?ref=blog.lido.fi) | | [https://beaconcha.in/validator/458237](https://beaconcha.in/validator/458237?ref=blog.lido.fi) | April 13, 12:51:23 UTC | [6213855](https://beaconcha.in/slot/6213855?ref=blog.lido.fi) | [194182](https://beaconcha.in/epoch/194182?ref=blog.lido.fi) | | [https://beaconcha.in/validator/459093](https://beaconcha.in/validator/459093?ref=blog.lido.fi) | April 13, 12:51:11 UTC | [6213854](https://beaconcha.in/slot/6213854?ref=blog.lido.fi) | [194182](https://beaconcha.in/epoch/194182?ref=blog.lido.fi) | | [https://beaconcha.in/validator/458562](https://beaconcha.in/validator/458562?ref=blog.lido.fi) | April 13, 12:51:11 UTC | [6213854](https://beaconcha.in/slot/6213854?ref=blog.lido.fi) | [194182](https://beaconcha.in/epoch/194182?ref=blog.lido.fi) | | [https://beaconcha.in/validator/458038](https://beaconcha.in/validator/458038?ref=blog.lido.fi) | April 13, 12:50:59 UTC | [6213853](https://beaconcha.in/slot/6213853?ref=blog.lido.fi) | [194182](https://beaconcha.in/epoch/194182?ref=blog.lido.fi) | | [https://beaconcha.in/validator/459803](https://beaconcha.in/validator/459803?ref=blog.lido.fi) | April 13, 12:50:59 UTC | [6213853](https://beaconcha.in/slot/6213853?ref=blog.lido.fi) | [194182](https://beaconcha.in/epoch/194182?ref=blog.lido.fi) | | [https://beaconcha.in/validator/459103](https://beaconcha.in/validator/459103?ref=blog.lido.fi) | April 13, 12:50:47 UTC | [6213852](https://beaconcha.in/slot/6213852?ref=blog.lido.fi) | [194182](https://beaconcha.in/epoch/194182?ref=blog.lido.fi) | | [https://beaconcha.in/validator/458566](https://beaconcha.in/validator/458566?ref=blog.lido.fi) | April 13, 12:50:47 UTC | [6213852](https://beaconcha.in/slot/6213852?ref=blog.lido.fi) | [194182](https://beaconcha.in/epoch/194182?ref=blog.lido.fi) | ### Just How Fast Are Ethereum Withdrawals Using The Lido Protocol? URL: https://blog.lido.fi/just-how-fast-are-ethereum-withdrawals-using-the-lido-protocol/ Last updated: 2023-04-12T13:58:40.000Z ## TL;DR The Lido protocol should allow for faster withdrawals for most stakers under most conditions. This is made possible by the Lido protocol buffer, the use of which is prioritised for withdrawal requests (provided there is enough ETH in the buffer to fulfil them). In particular, assuming current network size, no exit queue on the Beacon chain, and no serious incidents on the network: - **For most stakers who use Lido (i.e those who hold less than 1000 stETH), most withdrawal requests should take less than 1 day to complete (compared to 2-6 days for a standard Ethereum withdrawal)** assuming there is enough ETH in the Lido protocol buffer to service the withdrawal requests. If there isn’t, then a Lido withdrawal request can take slightly longer than a standard Ethereum withdrawal (between 3-8 days). - **Lido withdrawal requests in the range of 1000 to 5000 ETH are also likely to be completed relatively quickly (≈ 2 days) compared to standard Ethereum withdrawals (2-6 days)**: for example, the expected processing time for a request of 5000 stETH is 2 days – though this can take longer (between 5-9 days) if there is a shortage of ETH in the protocol buffer. Alternatively, it should be possible to swap such an amount in the ETH-stETH Curve pool for a small discount (less than 0.12% as long as the pool is balanced). - **Lido withdrawal requests greater than 5000 ETH and up to 100,000 ETH are expected to take between 4-10 days to complete (compared to 4-8 days under a standard Ethereum withdrawal)**. Alternatively, it should be possible to swap an amount of this size in a balanced Curve pool for a discount of between 0.12% (for amounts closer to 5000 ETH) and 2% (for amounts closer to 100,000 ETH). - **Lido withdrawal requests greater than 100,000 ETH are expected to take two weeks to complete.** **N.B.** All the time estimates given above are conditional on there being no exit queue, and no major slashing events or other unforeseen tail-risk scenarios. Withdrawal time could be delayed if there are changes to the assumptions. Some other important points worth highlighting: - **Expedited withdrawals are made possible by the Lido protocol buffer**, the use of which is prioritised for withdrawal requests (provided that there is enough ETH in the buffer to fulfil them). Based on the history of ETH staked using Lido, Execution Layer rewards, and our current estimate of Consensus Layer rewards, we estimate that there is a \~97% probability that the protocol buffer has more than 1000 ETH on any given day (when there is no demand for withdrawals). This means there is a very high probability thattotal daily withdrawal requests of less than 1000 ETH can be fulfilled within a day. For comparison, the normal Ethereum withdrawal process can take anywhere between 2 and 6 days (assuming no exit queue and no incidents with an exiting validator). - **If there is an especially large Beacon chain exit queue, the Lido protocol buffer can result in significant time savings, even for relatively large withdrawals (up to 15,000 ETH).** For example, if the exit queue is on the order of 56k validators (or approximately 10% of the current network size), the Lido protocol can shorten the time to withdrawal completion by approximately 1 month (compared to a standard Ethereum withdrawal). - ****In contrast to vanilla staking, a post-withdrawal slashing shouldn’t affect the time to withdrawal:** since the Lido protocol allows stakers to receive tokens routed directly from either another validator or the protocol buffer, the staker does not need to wait the 36 days associated with a slashing delay. - **Chaotic tail-risk scenarios, such as a mass slashing event, can trigger an emergency mode in the protocol called “bunker mode” which has the effect of temporarily postponing withdrawals**. If the Lido protocol is in bunker mode, withdrawal requests are delayed until the consequences of the incident that caused it to enter this state are resolved (withdrawal delays can last anywhere between 1 and 36 days while the Lido protocol is in bunker mode). - **Quasi-instantaneous exits are possible via exchange (although there is an inevitable time-money tradeoff):** Assuming enough liquidity, a staker using Lido always has two other options to exit from stETH that are quasi-instantaneous: they can either swap stETH for ETH on a DEX / CEX, or sell the NFT received when a withdrawal request was submitted. Although in both cases, a discount is expected. ## Withdrawing without using Lido In order to withdraw funds from the Beacon chain, three main steps need to be taken: 1. A staker broadcasts an exit message to send a validator to the exit queue. 2. The validator in question receives a withdrawable epoch (and continues performing its validator duties until that epoch is reached). 3. The validator’s balance is transferred via inclusion in a block (after it has been sweeped). The breakdown of time between the exit message being sent and the tokens being transferred, is as follows: > Withdrawal delay + [Sweeping](https://ethereum.org/en/staking/withdrawals/?ref=blog.lido.fi#validator-sweeping) time **(Base case)** There are two additional factors that can lengthen the exiting process: exit queue and post-withdrawal slashing. When there is an exit queue, one has to add an exit queue delay: > Withdrawal delay + [Sweeping](https://ethereum.org/en/staking/withdrawals/?ref=blog.lido.fi#validator-sweeping) time + Exit queue delay **(Exit queue case)** While exiting, there is also a chance (albeit small) that a validator gets slashed. If this happens, the withdrawal time will also include a slashing delay: > Withdrawal delay + [Sweeping](https://ethereum.org/en/staking/withdrawals/?ref=blog.lido.fi#validator-sweeping) time + Slashing delay **(Slashing case)** The worst case scenario (from a withdrawal time perspective) implies an exiting validator getting slashed while stuck in an exit queue: > Withdrawal delay + [Sweeping](https://ethereum.org/en/staking/withdrawals/?ref=blog.lido.fi#validator-sweeping) time + Exit queue delay + Slashing delay **(Worst case)** ### Exit time with no exit queue and no slashing (Base case) Let’s first consider the optimistic case (no exit queue and no slashing). Once the exit message is registered, a withdrawable epoch is assigned. This period is determined by *MIN\_VALIDATOR\_WITHDRAWABILITY\_DELAY* with *MAX\_SEED\_LOOKAHEAD*. In total it sums to 261 epochs, or \~ 27.8 hours. When a withdrawable epoch is reached, a validator becomes eligible for withdrawal, and its balance can be included in the next available block (a maximum of 16 withdrawals can be processed in a single block). The actual block where this happens depends on the sweeping time, which in turn depends on the total network size and the relative position of the validator index in the queue. To put things in context, the Median time estimate for sweeping (under current network size) is 2.4 days, while the time estimate for processing all validators (maximum waiting time) is 4.8 days. Summing up withdrawal delay and sweeping time for the current network size (\~563k validators) a withdrawal takes **(Base case)**: **\~ 1.7 days:** for extremely lucky validators (10th percentile) during sweeping. **\~ 3.6 days:** for the average validator (50th percentile ) during sweeping. **\~ 6 days:** for unlucky validators (the last to be processed) during sweeping. Note that the above estimates apply for a single validator. If your withdrawal request is big enough to send a significant number of validators to exit, it will create an exit queue, which will result in a longer processing time. Under the current network size, the maximum rate of exit is 75 validators/hour (that’s the same as 2,400 ETH/hour; 1,800 validators/day, or 57,600 ETH/day). To put the exit queue processing time in context, exiting one validator from the Beacon chain takes on average 3.6 days (and not more than 6 days under normal conditions), while each additional 10,000 ETH adds \~0.17 days. As noted above, as the network size fluctuates, the estimated time to withdrawal also changes. Here’s a summary table that takes into account three network size scenarios: **Time (days) to exit under 3 network size scenarios with no exit queue:** | Standard exit | Current network | Current network + 50% | Current network - 50% | | | | | | | | --------------------------- | --------------- | --------------------- | --------------------- | ---- | ------ | ----- | ----- | ------ | ----- | | Validators to exit | Min | Median | Max | Min | Median | Max | Min | Median | Max | | 1 | 1.65 | 3.60 | 6.05 | 1.89 | 4.82 | 8.49 | 1.40 | 2.38 | 3.60 | | \+ per each 1000 validators | 0.56 | | | 0.37 | | | 1.11 | | | | \+ per each 10,000 ETH | 0.17 | | | 0.12 | | | 0.35 | | | | 100 | 1.71 | 3.66 | 6.10 | 1.93 | 4.86 | 8.53 | 1.52 | 2.49 | 3.71 | | 1000 | 2.20 | 4.16 | 6.60 | 2.27 | 5.20 | 8.86 | 2.52 | 3.49 | 4.71 | | 10000 | 7.20 | 9.16 | 11.60 | 5.60 | 8.53 | 12.19 | 12.52 | 13.49 | 14.71 | ### Exit time with exit queue In case of an exit queue, the waiting time is defined by the network size and how long the queue is. In particular, the exit speed is rate limited to preserve the stability of the Ethereum network. By design, only 1 in every 65k validators can exit each epoch. For the current mainnet network size this means the practical rate limit is 8 validators per epoch, or 1.8k validators per day. In general, the waiting time in an exit queue increases by 0.31 days for every 0.1% of validators in the queue. So, if 1% of validators (5.6k validators, or 180k ETH at current size) are in the queue it can take around 3 additional days for a validator at the back of the queue to exit, whereas if 10% of validators (56k validators, or 1.8M ETH) are already in the queue exiting can take closer to a month. Adding a withdrawal delay and sweeping time on top of these estimates, when the exit queue is \~10% of the current network size, a withdrawal takes **(Exit queue case)**: **\~ 32.9 days:** for extremely lucky validators (10th percentile) during sweeping. **\~ 34.9 days:** for the average validator (50th percentile ) during sweeping. **\~ 37.3 days:** for unlucky validators (the last to be processed) during sweeping. As noted above, as the network size fluctuates, this estimated time will also change. Here’s a summary table that takes into account three network size scenarios: **Time (days) to exit under 3 network size scenarios with 10% exit queue** | Exit queue of 10% | Current network | Current network + 50% | Current network - 50% | | | | | | | | ------------------ | --------------- | --------------------- | --------------------- | ----- | ------ | ----- | ----- | ------ | ----- | | Validators to exit | Min | Median | Max | Min | Median | Max | Min | Median | Max | | 1 | 32.92 | 34.87 | 37.31 | 33.16 | 36.09 | 39.75 | 32.67 | 33.65 | 34.87 | | 100 | 32.97 | 34.93 | 37.37 | 33.20 | 36.13 | 39.79 | 32.78 | 33.76 | 34.98 | | 1000 | 33.47 | 35.42 | 37.87 | 33.53 | 36.46 | 40.13 | 33.78 | 34.76 | 35.98 | | 10000 | 38.47 | 40.42 | 42.87 | 36.87 | 39.80 | 43.46 | 43.78 | 44.76 | 45.98 | ### Exit time with slashing While exiting, a validator performs its duties and remains at risk of slashing. If a slashing happens, the slashing delay is defined by *EPOCHS\_PER\_SLAHINGS\_VECTOR* \= 2^13 epochs, or \~ **36 days.** On top of this we always have to factor a withdrawal delay and the sweeping time, in addition to a potential exit queue delay. In summary, for the current network size an exit for a slashed validator is expected to take: **\~ 38 - 42 days** when there is no exit queue **(Slashing case)** **\~ 38 - 74 days** when the exit queue is 10% of the network **(Worst case)** ### Putting the above estimates together Here’s a summary table for exiting a validator that covers all the above scenarios: **Time to exit without Lido (days)** | | No exit queue | 10% exit queue | | --------------------- | -------------------------- | ------------------------------ | | Validator not slashed | min: 1.7median: 3.6max: 6 | min: 32.9median: 34.9max: 37.3 | | Validator slashed | min: 38median: 40max: 42.4 | min: 38median: 55.6max: 73.7 | In sum, at current network size the expected delay for a vanilla withdrawal under normal conditions is 3.6 days. This increases to up to 35 days when the exit queue is 10% of the network, and up to 40 days if the validator in question is slashed after signing the withdrawal message. Under a worst case scenario (validator is slashed and there is an exit queue of 10%) it can take more than 2 months to completely exit and withdraw funds. A good rule of thumb to keep in mind for a vanilla Ethereum withdrawal is the following: the median time to exit, assuming no exit queue, is 3.6 days. Add 3 days to this estimate for every 1% of validators in the exit queue. Add 36 days if your validator gets slashed. If you’d like to learn more about withdrawals, see [here](https://notes.ethereum.org/@launchpad/withdrawals-faq?ref=blog.lido.fi#Q-How-fast-will-I-be-able-to-make-a-partial-withdrawal-Or-when-will-I-get-access-to-the-excess-rewards-that-are-on-my-validator) for Danny Ryan’s excellent Withdrawals FAQ. ## Withdrawing using Lido The Lido protocol adds pooling mechanics to the vanilla withdrawal process described in the previous section. In particular, the Lido protocol buffer should allow for faster exits for most stakers under most conditions. To withdraw funds from the Lido staking pool, the steps are as follows: 1. A staker submits a withdrawal request. 2. Lido Oracle registers the request and puts it in the Lido withdrawal queue: Lido handles withdrawal requests on a first-come-first-served basis. 3. Lido Oracle decides on the protocol mode (turbo/bunker). 4a. If the Lido protocol is in **turbo mode**: - ETH in the protocol buffer is used to fulfil the requests. - If the ETH amount is not enough to fulfil all the requests, Lido Oracle registers validators for exit. - Vanilla exit from the Beacon chain: Lido broadcasts an exit message, each validator gets a withdrawable epoch, after the epoch is reached a validator goes through the sweeping process and funds arrive in Lido Vault. - Lido Oracle reports back and funds become eligible for claiming. 4b. If the Lido protocol is in **bunker mode:** - The withdrawal requests are delayed until the consequences of the incident that caused “bunker mode” are resolved, for more details see [here](https://docs.google.com/document/d/1NoJ3rbVZ1OJfByjibHPA91Ghqk487tT0djAf6PFu8s8/edit?ref=blog.lido.fi). In sum, for a staker using Lido there are three possible outcomes depending on the network demand for staking/unstaking and the Lido protocol mode: 1. Expedited exit via the Lido protocol buffer: exit can be quickly serviced by new demand. 2. Standard exit via network broadcast: exit messages for validators are broadcast to the Ethereum network. 3. Delayed exit due to “bunker mode”. ### 1\. Expedited exit (via protocol buffer) By design, the Lido protocol accumulates ETH, while the off-chain oracle decides on partitioning between completing withdrawals and forwarding staking deposits. The Lido protocol accumulates ETH from three sources: - Newly staked ETH. - Withdrawals (full withdrawal when a validator is sent to exit as well as partial, or skimmed rewards). - Execution Layer rewards. ETH from the buffer outflows as follows: - The protocol first finalizes the withdrawals requests and allows stakers to redeem their stETH directly from the buffer (no validator exits needed). - Any remaining ETH is sent to the Beacon chain, spawning new validators. ![](https://lh4.googleusercontent.com/e_YKsEBwm1KqhFZd4XU998HViaaAXaPrPsDDW2x_kgBspgPb0ESuzo9_oc1pWaZcH85o2P2xyY6pXRYqAphlxNy5jK4eV6sx3UHYlo8h4skTvuwHN9Y3VKa-qV68Gm6mUWerA121QymZkr88CGRSb-Q) Based on the history of ETH staked via Lido, Execution Layer rewards, and our current estimate of Consensus Layer rewards, we conclude that there is a \~97% probability that the protocol buffer has more than 1000 ETH on any given day, a \~40% probability that the buffer exceeds 5,000 ETH, and a \~15% chance that it contains more than 10,000 ETH (when there is no demand for withdrawals). Importantly, if the requested withdrawal amount is more than the current buffer size it can still be finalized using the inflows that arrive in subsequent days. ![](https://lh6.googleusercontent.com/I0MPAd1Q2LZN19N2VX2Ozzj2fqs3innTItkiOv4-Lii_BBnmCc0MPGp53eQN84cFoUwPqsOyyV602zrc3YVMp4ea9Ax8qRwu2s2TJQr6XVpJYYl2aaSiQGuTQPurTgxFSe14SxPk2qonqYdcech_s7Y) Of particular note, there are important scenarios under which the protocol buffer can be used to shorten the waiting time (compared to vanilla staking) significantly: for example, from a standard waiting time of 33-37 days (when the exit queue is 10% of the current network size) to 3-5 days (for Lido withdrawal requests within the range of 15,000 ETH). The protocol buffer can also be used to expedite an exit when an exiting validator is slashed post withdrawal request. Notably this can save a Lido staker up to a month of waiting time compared to vanilla staking! We can estimate the expected inflows into the buffer as follows: **Estimated waiting time (days) for accumulating funds in the protocol buffer** | Probability | Amount that will arrive in the protocol buffer, ETH | | | | | ------------------- | --------------------------------------------------- | ------ | ------- | -- | | 15,000 | 25,000 | 50,000 | 100,000 | | | Low (25% chance) | 2 | 4 | 8 | 16 | | Median (50% chance) | 3 | 5 | 9 | 18 | | High (75% chance) | 4 | 6 | 11 | 20 | How much time does it take to withdraw via the protocol buffer? There is a moving 24h window from 1200 PM UTC - X on day T-1 to 1200 PM UTC - X on day T, where X is currently set to 23 epochs (\~2.5h). The requests submitted within this window are processed at 1200 PM UTC on day T. For example, suppose day T = ‘2023-06-01’ and there are 5 withdrawal requests: - WR1 submitted at ‘2023-05-31 11:00:00’ - WR2 submitted at ‘2023-05-31 13:00:00’ - WR3 submitted at ‘2023-06-01 09:00:00’ - WR4 submitted at ‘2023-06-01 11:00:00’ - WR5 submitted at ‘2023-06-01 13:00:00’ WR1-3 will be processed on ‘2023-06-01 12:00:00’ (day T), while WR4-5 will be processed a day later on ‘2023-06-02 12:00:00’ (day T+1). In sum, if there is low withdrawal demand and the withdrawal amount is not large (less than 1000 ETH), the protocol buffer can be used to expedite exits. This can take anywhere between **2.5 hours and 26.5 hours** depending on when the withdrawal request is made. ### 2\. Standard exit (via network broadcast) In the case that the ETH in the protocol buffer is not enough to fulfil all current withdrawal requests, Lido Oracle sends validators to exit the standard way (vanilla Ethereum withdrawal). The Lido protocol adds to this process a time window for registering a request and an operations delay connected with the validators’ ejection times. As already mentioned, the time window for registering a request can take anywhere between 2.5 hours and 26.5 hours. The operations delay takes between 4 and 24 hours. So, in total, a non-expedited exit via the Lido protocol adds between 6.5 and 50.5 hours to the vanilla withdrawal time. ### 3\. Delayed exit due to bunker mode Bunker mode is a mechanism that protects Lido users who are unstaking during rare but potentially highly adverse network conditions. It is a Protocol mode that is activated when the Consensus Layer penalties might be big enough to have a significant impact on the Protocol's rewards. During bunker mode, withdrawal requests are paused until the negative events are resolved: - For incidents that result in prolonged downtime spanning across tens/hundreds of thousands of validators, the expected delay is **1 day**, with a maximum delay of **7 days**. - For mass slashing events, the expected delay is expected to be **18 days** with a maximum delay of **36 days**. Taking into account that bunker mode is only triggered in response to chaotic tail-risk events, it should rarely, if ever, be activated (a backwards analysis shows there have been no incidents so far that would have triggered bunker mode). Examples of tail-risk scenarios that could trigger bunker mode include: the 4 biggest Lido Node operators simultaneously going offline for an entire day, a technical issue in a validator client that triggers more than 500 continuous slashings, or simultaneous and widespread outages at AWS, GCP, and Hetzner. More details on this as well as how withdrawal requests are finalized when the Protocol is in bunker mode can be found [here](https://docs.google.com/document/d/1NoJ3rbVZ1OJfByjibHPA91Ghqk487tT0djAf6PFu8s8/edit?ref=blog.lido.fi#heading=h.gv19mdkzubnv). ### Summary table of the above three scenarios **Time to withdraw (days) via Lido (for 1 validator)** | | No exit queue | Exit queue of 10% | | ---------------------------------------------------------------------- | ----------------------------- | --------------------------- | | Exit via protocol buffer | min: 0.1median: 0.6max: 1.1 | min: 0.1median: 0.6max: 1.1 | | Exit via sending validators to exit (No slashing/Small slashing event) | min: 2.3median: 4.7max: 8.1 | min: 4median: 20-36max: 39 | | Mass slashing events | min: 1.6median: 22.9max: 44.6 | min: 4.8median: 57max: 76 | ### Summary table: withdrawing without Lido vs withdrawing with Lido **Time to withdraw (days) Vanilla Ethereum staker (green) <> Lido Ethereum staker (blue) (for 1 validator)** | | No exit queue | Exit queue of 10% | | -------------------- | ------------------------------------------ | ---------------------------------------------- | | No slashing | min: 2 <> 0.1median: 4 <> 1-5max: 6 <> 8.1 | min: 33 <> 0.1median: 35 <> 20-36max: 37 <> 39 | | Validator is slashed | min: 38 <> 2.3median: 40 <> 5max: 42 <> 45 | min: 38 <> 4median: 56 <>20-36max: 74 <> 76 | # **On quasi-instantaneous exits** If the time to exit is considered too long, a staker using Lido has two other options available to them: 1. Instantly exit via swapping stETH on a DEX or CEX. 2. Instantly exit via selling the NFT received when the withdrawal request was submitted. ### 1\. Instantly Exit via swapping stETH on a DEX or CEX Today, the main stETH liquidity reserves are concentrated in the Curve stETH/ETH pool. Detailed stats on the pool can be found [here](https://dune.com/LidoAnalytical/Curve-ETHstETH?ref=blog.lido.fi). If the stETH/ETH rate ≥ 1, the stETH can be swapped for a premium (minus a swap fee). If stETH/ETH rate < 1, the stETH can be swapped at a discount (minus a swap fee). The amount of ETH available for swapping and the associated premium/discount depend on the liquidity reserves and their balance in the relevant pool. For example, at time of writing, there exists 476k stETH and 431k ETH in the Curve pool, which gives a stETH:ETH rate of 0.99714\. We assume that when withdrawals go live, the incentives for the pool will be reduced and, as a result, that liquidity reserves will go down. We’ve run several simulations for different sized pools and have found that amounts in the range of 50k-100k stETH can be swapped under every pool size scenario, at a discount of between 0.4 - 0.9% for swaps of size 50k, and between 0.8 - 2.1% for swaps of size 100k. Note that very large swap amounts (more than 100k stETH) can face lack of liquidity reserves or provoke a cascade liquidation in the pool and high discounts of 2% or more. As a result, we recommend withdrawing via standard exit for amounts greater than 100k stETH. | ![](https://lh3.googleusercontent.com/qXTARbtsqS-e3oSXbxWWSHr-SmWhk_cY1hGeiigwJCJBz34_ujPjSjJLp-eZbWj3aRE60z7m4eq8BEsJtdiPj5M_t5ab8uJ9G0-3WLdbthQHiLVVjcHSBC1q5heHC21_zKvM0-bA3MZyHYq9I4_J55c "stETH amount available for swap depending on discount") | ![](https://lh5.googleusercontent.com/canMeFIEp1q_rkSv7_vpDbqmIjJS867wZsXsRmvgfIieXQ0Xjntp-Q6EVCr_o45-XtHHft6F1l9VqbfkUZ2fUVSruGLjp8LlDNofvLbRMqoteMHHCOuV_B-QGvFrCxH7gx8lGBFBEgNG2PV3YCnh1OQ "Discount depending on stETH amount") | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ### 2\. Exit via selling NFT When a withdrawal request is submitted, a staker receives an NFT, which gives them rights over claiming the withdrawal once it has been processed. The expectation is that this can then be sold on a secondary market (possibly for a discount). ## Summary The main takeaway is that there is a time-money type of trade-off for exiting from stETH to ETH. At the end of the day, there are three possible paths: 1. Instantaneous exit via swaps on AMM and CEXes. 2. Expedited exit via the Lido protocol buffer (assuming there is enough ETH to service the request). 3. Standard exit via vanilla Ethereum withdrawal. While stakers can always choose the first path, if they choose to withdraw using Lido the Oracle will pick between the second and third paths. Which path is ultimately chosen depends on four predominant factors: the amount to withdraw, the stETH/ETH rate, the performance of validators, and the net staking demand in the context of the Beacon chain state. There is no simple answer that applies to all stakers under every scenario. ### Here are some guidelines in table form: **How to exit from stETH** | stETH (amount to withdraw) | Exiting via Lido protocol | Exiting via Curve swaps | Exiting via standard Ethereum withdrawal | Lido users (%) | | | | | | -------------------------- | ------------------------- | ----------------------- | ---------------------------------------- | -------------- | ------------ | --------- | --- | ----- | | Time (days) | Discount, % | Time (days) | Discount (%) | Time (days) | Discount (%) | | | | | Protocol buffer | Withdrawals | | | | | | | | | < 1,000 | 0.6 - 1.1 | 4.7 - 8.1 | \~0 | txn time | 0.04 - 0.06 | 3.6 - 6 | \~0 | 98.98 | | 1,000 - 5,000 | 0.6 - 2.1 | 4.7 - 8.2 | \~0 | txn time | 0.05 - 0.12 | 3.6 - 6.1 | \~0 | 0.66 | | 5,000 - 10,000 | 2.1 - 4 | 4.8 - 8.3 | \~0 | txn time | 0.07 - 0.2 | 3.7 - 6.2 | \~0 | 0.15 | | 10,000 - 50,000 | 3 - 11 | 4.9 - 9 | \~0 | txn time | 0.11 - 0.89 | 3.8 - 6.9 | \~0 | 0.16 | | 50,000 - 100,000 | 9 - 20 | 5.6 - 9.9 | \~0 | txn time | 0.38 - 2.08 | 4.5 - 7.8 | \~0 | 0.03 | | 100,000 - 150,000 | 18 - 30 | 6.4 - 10.7 | \~0 | txn time | 0.74 - 4.54 | 5.3 - 8.6 | \~0 | 0.01 | | 150,000 - 200,000 | 27 - 40 | 7.3 - 11.6 | \~0 | txn time | 1.15 - 11.39 | 6.2 - 9.5 | \~0 | 0.00 | | \> 200,000 | \> 40 | \> 12 | \~0 | txn time | \- | \> 10 | \~0 | 0.01 | | First choice | | --------------------------------------------- | | Second choice | | No objective preference (time-money tradeoff) | | Not-recommended | **N.B** these guidelines assume normal conditions. All ranges given are **median-max**. In the case of high demand for withdrawals, the exit queue will add 3 days of delay for every 1% of the network that is in the queue (e.g. 10% of the network attempting to exit at the same time leads to a month of delay). In the case of a chaotic tail-risk scenario (e.g. mass slashing) you will also need to add up to 36 days to the above time estimates for exiting via the Lido protocol. See the TL;DR at the start of this post for our best attempt at a useful synthesis. ### Ethereum Shapella - Frequently Asked Questions (FAQ) URL: https://blog.lido.fi/ethereum-shapella-overview-faq/ Last updated: 2023-09-12T05:21:01.000Z The [Ethereum](https://lido.fi/ethereum?ref=blog.lido.fi) community will reach another major milestone after the Merge this week with the activation of the [Shapella upgrade](https://blog.ethereum.org/2023/03/28/shapella-mainnet-announcement?ref=blog.lido.fi), scheduled for 22:27 UTC on April 12th, 2023. In this article we will explain the Shapella upgrade, its improvements for the network, as well as the impact it will have on stakers using [Lido](https://lido.fi/?ref=blog.lido.fi). ## **What is the Ethereum Shapella upgrade？** The Shapella upgrade is the next planned upgrade for [Ethereum](https://ethereum.org/en/?ref=blog.lido.fi), incorporating two separate changes - Shanghai for the Execution Layer (EL) and Capella for the Consensus Layer (CL) respectively. The most important feature to be delivered is that of withdrawals, proposed in **EIP-4895**. Through the enabling of [Beacon Chain](https://ethereum.org/en/roadmap/beacon-chain/?ref=blog.lido.fi) withdrawals, the upgrade will allow validators to withdraw their staked ETH, some of which has been locked since the Beacon chain’s introduction in 2020\. Importantly, this significantly reduces the technical risk of staking for users with the completion of the end-to-end staking flow that allows for unstaking. The upgrade is also expected to reduce gas fees in certain instances and improve the network’s scalability through the implementation of the following EIPs: - **EIP-3651:** Proposes lowering gas costs when the payments (e.g. MEV-related payments) to COINBASE addresses take place. - **EIP-3855:** Aims to lower gas costs for developers by introducing the PUSH0 instruction. - **EIP-3860:** Introduces a maximum size limit for initcode with a fair charge system. - **EIP-6049:** Deprecates the SELFDESTRUCT opcode and shows a warning when it is used. [![](https://blog.lido.fi/content/images/2023/04/image.jpg)](https://blog.ethereum.org/2023/03/28/shapella-mainnet-announcement?ref=blog.lido.fi) ## **What does Shapella mean for stakers?** The Lido DAO is eagerly anticipating the launch of Shapella, and contributors are fully dedicated to supporting the incoming upgrade for stakers using the Lido protocol. Most importantly, this means introducing a simple withdrawal flow to enable users to effortlessly unstake their [staked ETH (stETH)](https://lido.fi/ethereum?ref=blog.lido.fi). Withdrawals are a fundamental component of a liquid staking protocol and will significantly enhance the experience for Ethereum stakers using Lido. ### 1\. As a Lido on Ethereum user, do I need to do anything? Short answer - no. Your [stETH](https://help.lido.fi/en/articles/5230610-what-is-steth?ref=blog.lido.fi) will remain unchanged and you will continue to get staking rewards before, during and after the Shapella upgrade. ### 2\. When does Shapella go live? The Shapella upgrade is expected to go live on April 12th at around 22.27 UTC, specifically on Ethereum epoch 194048. ### 3\. When will Ethereum withdrawal functionality be enabled on Lido? Ethereum withdrawals using Lido are expected to go live in May following completion of testing and audits. ### 4\. Do I have to withdraw after the Shapella upgrade? No. Withdrawal functionality can be used by those who want to unstake. If you want to continue to support the Ethereum network - and get daily rewards in the process - there is no need to withdraw. ### 5\. Why would I care about withdrawals? Ethereum withdrawals are a significant milestone allowing users to stake and unstake at will - thus making for a more user-friendly staking experience. The possibility to withdraw Lido stETH on mainnet is expected in May with the Lido V2 deployment, pending completed audits and testing. Lido stETH withdrawal functionality has been deployed on Goerli testnet for a few weeks now and is in the process of being tested. You’re invited to grab some goerliETH and go to [stake.testnet.fi/withdrawals](https://stake.testnet.fi/withdrawals?ref=blog.lido.fi) to test it for yourself! Lido DAO contributors came together to discuss this, amongst many other things, on a recent Twitter Space dedicated to withdrawals. In case you missed it, check it out here: > Join us tomorrow 13.00 UTC to discuss all things Lido Ethereum withdrawals ⚡️ > > Agenda: > \- Testnet progress. > \- Withdrawal overview (launch date, NFTs & more). > \- Analytics: How fast are Lido withdrawals?[https://t.co/yGRcksEJjP](https://t.co/yGRcksEJjP?ref=blog.lido.fi) > > See you tomorrow 🏝️ > > — Lido (@LidoFinance) [April 5, 2023](https://twitter.com/LidoFinance/status/1643570541582860290?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) To stay up to date as Shapella and Ethereum withdrawals approach, keep an eye on the [Lido Twitter](https://twitter.com/LidoFinance?ref=blog.lido.fi) where we will continue to update stakers on new developments. ### Lido on Polygon - Wave 2 Onboarding URL: https://blog.lido.fi/lido-polygon-wave2-onboarding/ Last updated: 2023-04-11T15:46:14.000Z The Lido Node Operator Subgovernance Group (LNOSG) has proposed to the DAO the addition of five new Node Operators for the [Lido on Polygon](https://lido.fi/polygon?ref=blog.lido.fi) operator set, following the Wave 2 onboarding evaluations. This onboarding round follows the [Lido on Polygon V2 protocol upgrade](https://research.lido.fi/t/lido-on-polygon-protocol-upgrade/3213?ref=blog.lido.fi), which included a number of significant improvements for Node Operators. These changes included more equitably distributing stake for Lido on Polygon Node Operators upon deposits and withdrawals, no longer requiring Node Operators to transfer their validator slot to the protocol, and simplified logic for the Node Operator registry. Following these changes, and the strong inflows Lido on Polygon has seen year-to-date, a [record 43 applications](https://research.lido.fi/t/announcement-onboarding-for-lido-on-polygon-wave-2/3747/5?u=kimonsh&ref=blog.lido.fi) (of which 26 were eligible for inclusion) were received to join the [Lido on Polygon](https://lido.fi/polygon?ref=blog.lido.fi) Node Operator set. Due to the limited size of the Polygon validator set, Node Operators were deemed ineligible if they are not currently running an active mainnet validator. After evaluating the applications, the LNOSG suggested that proposing five new candidates for inclusion to the Lido on Polygon Node Operator set was appropriate. This took into account the potential for market volatility and the dilutive impact to existing Lido on Polygon Node Operators from what will be an 83% increase in the number of Node Operators participating in the protocol if the five shortlisted candidates are included. While the LNOSG is responsible for evaluating the applications received to the protocol for permissioned networks, ultimately the choice remains up to the Lido DAO whether to include all, none, or some of the proposed shortlist. ## Proposed Node Operator Candidates With the [Snapshot vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xf589c15d2220e9d11a199232f6f8457f4896048bbd7c9523872fa4153e450a74)now in progress, Lido DAO members are encouraged to vote and express their opinion regarding the proposed candidates in the [onboarding thread](https://research.lido.fi/t/announcement-onboarding-for-lido-on-polygon-wave-2/3747/5?ref=blog.lido.fi) on the Lido Research Forum. Below you can find a description and statement for each of the prospective operators proposed by the LNOSG to join the Lido on Polygon Operator set (listed in alphabetical order). ## bountyblok [bountyblok](https://www.bountyblok.io/?ref=blog.lido.fi) is the easiest way to power your Web3 projects for engagement. With bountyblok you can launch contests & giveaways, distribute NFTs in a few clicks, gift NFTs with personalized email templates, and access enterprise Web3 APIs for secure blockchain integrations. > "We are excited to be proposed to join the Lido ecosystem! The defi space is constantly growing and as an experienced validator on the Polygon mainnet since genesis, we have the know-how and expertise in running mission critical nodes and help power the Lido finance network in this journey." ## Bware Labs [Bware Labs](https://bwarelabs.com/?ref=blog.lido.fi) is a web3 infrastructure company providing a wide range of ecosystem services such as running validators, indexing services, bridge operators, faucets, snapshot services and API's through our BLAST platform. Their core objective is to improve the developer experience within a blockchain ecosystem while providing the highest-performance infrastructure services. > "We have been working with Polygon for two years now, providing Public API support and running a validator on mainnet at the same time. BwareLabs believes strongly in what Polygon is building and that's why we would be honored to join the Lido Node Operator set." ## Everstake [Everstake](https://everstake.one/?ref=blog.lido.fi) is a responsible validator trusted by 625k+ users across 70+ blockchain networks. Created by engineers in 2018, it’s a self-funded, profitable business employing 125+ people, running over 8,000 nodes for 70+ blockchain protocols, including bridges and oracles. Their team focuses not only on ensuring 100% uptime, but also on benefiting the community and the partners via various activities. > "Being a part of Ethereum and Solana Node Operators sets, we’re thrilled to hopefully join, as well, as a Lido operator for Polygon, a blockchain we’ve been running infrastructure on since December 2020\. We are looking forward to contributing further to the Lido ecosystem and supporting it for the best user experience, reliability and security." ## Smart Stake [Smart Stake](https://www.smartstake.io/index.html?ref=blog.lido.fi) has been providing high quality delegated proof-of-stake validator services since 2019\. Smart Stake builds easy to understand and user centric tools for all network participants. Smart Stake has been a Polygon mainnet validator since genesis, contributing to the Polygon ecosystem with analytics dashboards for validator, network, & decentralization metrics. > "Liquid Staking enables exciting opportunities for stakers while securing the network at the same time. Lido has always led from the front in liquid staking. We are proud to be shortlisted as a node provider for Lido on Polygon. Looking forward to continued adoption and success for both Lido and Polygon." ## Stakin [Stakin](https://stakin.com/?ref=blog.lido.fi) is a non-custodial staking provider for Proof-of-Stake blockchains. Stakin serves institutional crypto players, foundations, custodians, exchanges as well as a large community of individual stakers. Stakin provides secure and reliable Web3 infrastructure on 40+ blockchain networks including Ethereum, Polygon, Cosmos, Near, Aptos and more. > "We are thrilled to join the selected validator set for Lido on Polygon. Lido is a leading staking solution for Ethereum and other blockchains, and being part of their validator set is a testament to our expertise and dedication to the blockchain ecosystem. Polygon is an exciting and fast-growing scaling solution for Ethereum with a thriving ecosystem. We are excited to work with Lido to contribute to Polygon’s security and decentralization, and help drive the adoption of staking on Polygon.” ## Next Steps & Future Onboarding Opportunities If the [**Snapshot vote**](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xf589c15d2220e9d11a199232f6f8457f4896048bbd7c9523872fa4153e450a74) passes as proposed, the five new Node Operators will likely be added to the Node Operator set by the end of May. While the exact timing of future onboarding rounds will depend on numerous factors, the LNOSG intends to open a future onboarding round for Ethereum Node Operators post the [Lido V2 upgrade](https://blog.lido.fi/introducing-lido-v2/). Future onboarding rounds for Polygon and Solana are also possible during 2023, though will heavily depend on macroeconomic market dynamics. ### Interested in learning more about Lido Node Operators? The [Lido Operator Portal](https://operatorportal.lido.fi/?ref=blog.lido.fi) contains detailed information regarding current Lido Node Operators in addition to an overview of the Node Operator application process. ### Introducing Lido V2 — Next Step In Decentralization URL: https://blog.lido.fi/introducing-lido-v2/ Last updated: 2023-09-12T05:20:24.000Z Lido protocol technical contributors are excited to present the proposal for Lido V2 – Lido protocol’s largest upgrade to date and a step change on the road toward further decentralization. The two major focal points of this upgrade are: - **Staking Router:** Thanks to a new modular architectural design**, anyone can develop** on-ramps for new Node Operators, ranging from solo stakers, to DAOs and Distributed Validator Technology (DVT)clusters. Together, they will create a far more diverse validator ecosystem. - **Withdrawals:** This all encompassing Lido on Ethereum protocol upgrade will allow stETH holders to withdraw from Lido at a 1:1 ratio, realizing a key milestone of a truly open on / off ramping into the Ethereum staking ecosystem. The purpose of Lido on Ethereum was offering users an alternative to centralized staking platforms - such as exchanges - whilst also negating the technical and financial challenges of running a solo node. Throughout, the Lido protocol has adhered to providing the highest standard of security and usability to its users. This proposal is designed to drive a more inclusive, open and transparent platform whilst building on our core mission to make staking simple, as secure as possible, and keep Ethereum decentralized and censorship-resistant. ## The Next Major Upgrade In the coming months, Ethereum will mark an important moment with the network Shanghai / Cappella hard fork. This upgrade enables withdrawals to Ethereum stakers who have supported the network since the first days of the beacon chain and beyond. The implementation of withdrawals fulfils a core goal of Lido on Ethereum by allowing users the freedom to stake and unstake at will. Given this freedom, the market will shine a bright light on platforms offering the best experience, security record, and wider composability within the DeFi ecosystem. The advent of the Staking Router and module-based infrastructure for validator sets will catalyze development both throughout Lido on Ethereum and externally through third party contributors. Lido protocol was an early adopter of liquid staking and initially used only BLS-based 0x00 withdrawal credentials (WC). Upon the availability of smart contract-based WC, Lido protocol promptly switched to the more secure 0x01 WC. Currently, a small portion of validators, around 12%, still use 0x00 WC that is managed by a 6-of-11 threshold scheme. To mitigate the risk associated with the distributed custodian, the intention is to rotate these credentials to the smart contract-based ones via a ceremony. During this ceremony, participants will sign a rotation message that will be broadcast to the consensus layer network. The implementation of withdrawals coupled with the Staking Router proposal will contribute to an increase in the decentralization of the network, a more healthy Lido protocol, and enable the long-awaited ability to stake and unstake (withdraw) at will, reinforcing stETHasthe most composable and useful asset on Ethereum. ## Introducing the Staking Router **Presenting** **the Staking Router, a major protocol upgrade that moves the operator registry to a modular and more composable architecture.** **The Staking Router will act as the nucleus of the Lido vision: a platform where stakers, developers, and node operators can collaborate without friction and drive the future of a decentralized Ethereum together.** Ethereum should be a credibly neutral home for applications and their users. The mission of Lido on Ethereum is to provide a secure and accessible staking platform and contribute to Ethereum’s overall decentralization. 0:00 / 1× Lido is firmly [committed to further diversifying](https://blog.lido.fi/the-next-chapter-for-lido/) its operator and validator set, which reduces the risk of downtime or censorship while maintaining network performance, and neutrality. ### Overview The Staking Router is a controller contract that would allow Lido to evolve into an extensible protocol via a modular infrastructure. This will work by essentially treating the various modules as sets of validator pools that can act as potential supply for the protocol. Each module will be responsible for managing an internal operator registry, storing validator keys, and allocating stake and rewards between the operators that participate in the module. Each module could include various types of Node Operators, ranging from community stakers, to professional or fledgling staking organizations, to DAOs, who may run validators independently or in concert via infrastructure such as DVT. Additionally, Node Operators will be able to participate via multiple modules. Besides product features, it could also allow the storing of keys on L2 or off-chain, lowering protocol costs and increasing the potential number of node operators. Modular architecture would facilitate faster experimentation with various Node Operator configurations. This would reduce some of the technical hurdles whilst speeding up the iterative process of expanding the set of Node Operators. The Staking Router is poised to benefit a variety of stakeholders who use Lido, including: - **Stakers:** They benefit from a more diverse and secure Node Operator set, as their deposits will be distributed over a much greater number of independent entities, mitigating network-downtime risk and improving Ethereum’s resiliency. - **Node Operators:** Through the new modules, additional types of Node Operators such as solo stakers, small groups, DAOs, and professional node operators will be able to increase their avenues of participating in the Lido protocol. - **Developers**: Users will be able to propose and implement modules using different node operator compositions and with a variety of competitive characteristics (such as cover options and fee structures) and apply for inclusion into the Staking Router’s module set. ![](https://blog.lido.fi/content/images/2023/08/Chart_White.png) The Staking Router architecturally shifts the Lido protocol **towards an aggregator strategy,** encompassing a more diverse validator set and offering the possibility for different approaches, technologies, and greater overall flexibility throughout the protocol. Furthermore, the Staking Router will allow for individual modules (and the corresponding subsets of their respective validators) to operate with custom parameters, such as fees or collateral requirements adding yet more elasticity amongst validator sets. ### Staking Modules Future Direction Currently, Lido utilizes a singular NodeOperatorsRegistry contract which is a DAO-controlled registry of curated Node Operators. The Staking Router proposal would allow for **the introduction of additional modules enabling a more diverse operator base by leveraging mechanics such as DVT, bonding, and reputation scoring, in order to introduce permissionless entry into the Node Operator set.** - **Community Module**: bonded permissionless node operators with an optional mechanic to effectively lower the bond requirement according to reputation (e.g. based on successful performance). Moving forward, some of these modules could include: - **DVT Module**: DVT-enabled validators (with optional bonds) such as Obol’s Distributed Validator Clusters or SSV nodes. - **Off Chain or L2 Module**: reduces gas costs by pushing the storage of validator keys to an off-chain or layer 2 solution. To expand on this, there can be many modules of the same type (or modules with overlapping types, e.g. DVT + Community) operating within the same staking set. Each module will be able to express a specific purpose or theme via the types of operators that they leverage to produce validators to add to the pool. Finally, the Staking Router orchestrates deposits and withdrawals to satisfy the DAO's desired stake distribution, and allows DAO-set treasury staking rewards and stake allocation algorithms to control the validator distribution. ## Withdrawals Withdrawals will enable users to unstake their stETH and, in return, receive ETH at a 1:1 ratio for their staked ETH. 0:00 / 1× As withdrawals are a basic feature of liquid staking, we’ve strived to make the best possible design, balancing user experience and speed of operation with the safety of the protocol. Due to the inherent complexities in Ethereum’s network design where the Consensus and Execution Layers function somewhat separately, the proposed withdrawal mechanism added to Lido’s protocol design will have two modes: **Turbo and Bunker mode.** *For a far more detailed explanation about *Withdrawals on Lido* including deep dives into Turbo and Bunker Mode please refer to a technical analysis prepared by Lido protocol engineering contributors* [**here**](https://hackmd.io/@lido/SyaJQsZoj?ref=blog.lido.fi#How-Ethereum-penalties-amp-slashing-work)*.* ### Turbo Mode This is the default mode used unless there is a catastrophic event or unforeseen scenario affecting the Ethereum network. In Turbo Mode, withdrawal requests are fulfilled quickly, using all available ETH from user deposits and rewards. The length of time to exit the network is uncertain; however, in the best case, withdrawal requests can be processed within hours without requiring a validator exit. In order to make the process as smooth as possible, contributors have proposed automation tooling for both the protocol and Node Operators. This tooling will work to help automate processes around validator exits, minimizing possible delays. ### Bunker Mode To orderly process withdrawals under catastrophic scenarios, Bunker Mode is proposed. Its purpose is to prevent sophisticated actors from gaining an unfair advantage against other stakers by delaying withdrawals in the whole protocol and socializing the negative impact. ### Claimant Overview Due to the asynchronous nature of Ethereum withdrawals, withdrawals are proposed to function via a Request/Claim process. - **Request**: user locks the stETH as withdrawal request. - **Fulfillment**: The protocol sources the ETH to fulfill the withdrawal request, locks the ETH, burns the locked stETH, and marks the withdrawal request as claimable. - **Claim**: The user claims their ETH at any time. Fulfillment time is also uncertain. Expect a couple of hours in the best case, and it should be below a week for the majority of requests most of the time. However, in the worst case scenarios it may be significantly longer. It should also be noted that whilst a user waits in line to withdraw (and exit the network) they will not receive staking rewards. ## Approach to protocol upgrade security This major proposal upgrade to Lido V2 has been the most intensively scrutinized code yet, with seven different independent audits. Security is of the utmost importance, with countless hours dedicated to internal and external testing. According to the recently introduced [audits policy](https://research.lido.fi/t/lido-on-ethereum-form-audits-committee/3481?ref=blog.lido.fi#proposal-to-form-audits-committee-2), we have booked slots with several audit service providers to conduct diverse and thorough security assessments of all the upgrade-related codebase. Some of them are long-time partners, while others will contribute to Lido security for the first time. Find the full list of confirmed audit service providers below: 1. [Sigma Prime](https://sigmaprime.io/?ref=blog.lido.fi) will be auditing the updated [dc4bc](https://github.com/lidofinance/dc4bc/?ref=blog.lido.fi) version designed for the 0x00->0x01 Withdrawal Credentials rotation ceremony. 2. [ChainSecurity](https://chainsecurity.com/?ref=blog.lido.fi) will be the first auditors to take a close look at the Staking Router code in January. ChainSecurity’s work will be used to find out potential weaknesses of the new crucial protocol part before merging it into the final protocol upgrade code. 3. [Oxorio](https://oxor.io/?ref=blog.lido.fi) will be conducting a cover to cover audit of the protocol with enabled Ethereum withdrawals code base in February-March. 4. [Statemind](https://statemind.io/?ref=blog.lido.fi) will be conducting a cover to cover audit of the protocol with enabled Ethereum withdrawals code base in February-March. 5. [HEXENS](https://hexens.io/?ref=blog.lido.fi) will be conducting a cover to cover audit of the protocol with enabled Ethereum withdrawals code base in February-March. 6. [MixBytes() Camp](https://camp.mixbytes.io/?ref=blog.lido.fi) security audit contest of the protocol smart contracts is scheduled in February-March. 7. [Certora](https://www.certora.com/?ref=blog.lido.fi) will be the final contributor to the protocol upgrade security providing the full protocol audit and formal verification in February-March. The full list of audits performed on the Lido codebase with detailed reports can be looked up in the [dedicated public Github repo](https://github.com/lidofinance/audits?ref=blog.lido.fi). ## Launch Details As with anything at the bleeding edge of technological advancement, the plan below is more of a rough guide than a finalized schedule, and is subject to change. ### Beginning of February: - Code freeze & security audits start. ### End of February: - Signal snapshot vote on the upgrade, for pre-commitment on “upgrade params” and overall design buy-in from the DAO. ### Beginning of March: - Testnet on Goerli. - All code (on-chain and off-chain), Oracle & NO automation is tested. ### March / April: - Withdrawal credentials rotation ceremony (0x00 -> 0x01). - Protocol upgrade pre-hardfork. - Mainnet contracts deployment. - Aragon regarding protocol upgrade. - Scheduled Shanghai/Capella hardfork. ## A Call to Devs - Let’s Build This Together Lido V2 opens the development ecosystem to external contributors from all corners of the Ethereum ecosystem. The rollout of Staking Router’s modular functionality will arrive over time with initial priority given to community and DVT based modules. Soon, community developers, project teams, and researchers will be able to contribute directly to Lido by proposing Staking Router modules that will be vetted by the DAO. After the upgrade is in, Lido DAO invites you to join our [research forum](https://research.lido.fi/?ref=blog.lido.fi) where further updates will be released for collaborative proposals. The Lido protocol aims to foster and support external contributors wherever possible. 0:00 / 1× ## Conclusion As set out [here](https://blog.lido.fi/the-road-to-trustless-ethereum-staking/), Lido protocol’s mission is to make staking simple and secure, while keeping Ethereum decentralized and censorship-resistant. Within this context, the Staking Router is a key milestone towards the goal of fostering the best validator set for Ethereum – one which doesn’t compromise on either quality, security or decentralization. Over the past two years, Lido protocol has grown in stature to become an integral building block in both the Ethereum ecosystem and overall DeFi landscape. To date, more than one hundred thousand unique staker addresses have deposited over 4,815,040 ETH into the Lido protocol, underlining a resounding success of the goal to democratize access to staking. Lido protocol’s commitment to trustless staking, democratizing the network, and increasing the resilience of the Ethereum protocol remains as strong as ever. The Lido protocol looks forward to sharing more with our ever growing community of users, Node Operators and LDO holders as Lido V2 is rolled out. ### Post Mortem 26/01/2022: bETH Anchor Integration Upgrade Incident URL: https://blog.lido.fi/postmortem-beth-anchor-integration-upgrade-incident/ Last updated: 2023-01-24T12:52:33.000Z After the AnchorVault upgrade switching the bETH Anchor integration from using Shuttle to Wormhole bridge, two users have been able to execute transactions aimed for Shuttle-using code, effectively blocking their funds on unaccessible Terra addresses. The integration have been upgraded to prevent such events from happening. Users have been refunded, and the funds corresponding to the amount locked on Terra has been recovered from the AnchorVault. ## What Happened? On Jan 26th, 2022 Anchor bETH integration had been migrated 3 from using the Shuttle bridge to the Wormhole bridge. The upgrade lacked smart contract API versioning, allowing two users to send the total of 443.56111857 webETH (Terra-side Wormhole bETH) to inaccessible Terra addresses. The affected users have been refunded on Jan 27th, 2022 from the dev team’s funds. The bETH Anchor integration has been down for about 6 hours from 12:16 PM UTC to 5:52PM UTC. Refunding the dev team by unlocking stETH from the AnchorVault contract has been performed with AnchorVault upgrade on Feb 10th, 2022. ## Why Did It Happen? The root cause has been that upgraded contracts retained backwards compatibility, allowing users to send txs from the old UI version to the new contracts without reverts. ## How Did We Fix It? To prevent such kind of incidents from happening, the team has implemented versioning into the AnchorVault, and formulated the policy for upgradable contracts across the Lido codebase. The policy has been published as [LIP-10](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-10.md?ref=blog.lido.fi). On a lower level, all state-changing methods used in UI now include version number as the parameter, preventing the txs formed by old UI versions to ever pass into the contracts after the upgrade. Internal guidelines regarding contract upgrades have been tweaked as well. The fix has been implemented so that no third party integrations are interrupted. On Ethereum, AnchorVault received a tweak to take the refunded stETHs into account in internal calculations. For the Wormhole, bETH tokens locked on the Ethereum Wormhole bridge address corresponded 1-1 to the webETHs on Terra. On the Anchor side, as webETH balances don’t affect rewards distribution (only original bETH token balances do), so no impact as well. ## Incident Recap ### Jan 26th, 2022 1. During 26th Jan upgrade, the UI for converting from stETH/ETH to bETH that interacts with the AnchorVault contract was disabled. 2. The AnchorVault contract was upgraded to use the new bridge. The upgrade changed the semantics of the AnchorVault.submit method used for conversion: the \_terra\_address: bytes32 argument started requiring left zero padding of the 20-byte address instead of right padding. 3. The new UI implementing left zero padding of Terra addresses was deployed and enabled. 4. Two users were able to send AnchorVault.submit transactions using the outdated UI, either because they had a browser tab with the old UI open or due to the browser caching issues. These transactions ([0xc875f85f525d9bc47314eeb8dc13c288f0814cf06865fc70531241e21f5da09d](https://etherscan.io/tx/0xc875f85f525d9bc47314eeb8dc13c288f0814cf06865fc70531241e21f5da09d?ref=blog.lido.fi), [0x7abe086dd5619a577f50f87660a03ea0a1934c4022cd432ddf00734771019951](https://etherscan.io/tx/0x7abe086dd5619a577f50f87660a03ea0a1934c4022cd432ddf00734771019951?ref=blog.lido.fi)) contained Terra addresses encoded using right zero padding. 5. The Wormhole bridge decoded the right-padded Terra addresses incorrectly (since it expects left padding), minting the wrapper webETH tokens to unreachable addresses, effectively burning the tokens. 6. The users got in touch with the team reporting the issue with bETH not available on the Terra side. 7. UI & AnchorVault contracts have been disabled 8. The fix for AnchorVault & UI breaking the backward-compatibility implemented & applied, resuming the operation of the integration. ### Jan 27th, 2022 1. Users have been refunded from dev team’s funds. ### Feb 10th, 2022 1. The upgrade for refunding the dev team from stETH funds locked on the AnchorVault is implemented & performed. ## Useful Links 1. [Initial Shuttle -> Wormhole upgrade announcement.](https://research.lido.fi/t/migrating-anchor-protocol-beth-integration-bridge-from-shuttle-to-wormhole/1611?ref=blog.lido.fi) 2. [Integration upgrade for refunding dev team announcement](https://research.lido.fi/t/beth-anchor-integration-upgrade-on-12pm-2pm-utc-10th-feb-2022/1669?ref=blog.lido.fi) 3. [LIP-10 on Proxy initializations and LidoOracle upgrade](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-10.md?ref=blog.lido.fi) ### Guide: Staking Ethereum On MetaMask URL: https://blog.lido.fi/staking-ethereum-on-metamask/ Last updated: 2023-09-19T17:03:37.000Z Ethereum staking with Lido is now live on [MetaMask](https://metamask.io/?ref=blog.lido.fi)! Stake your ETH on MetaMask to earn yield and secure the Ethereum network from the comfort of your wallet. MetaMask, the world’s leading web3 wallet supporting multi EVM-compatible chains, now allows users to stake their ETH with Lido directly from the comfort of their MetaMask browser extension or mobile wallet. With this launch, ETH holders on MetaMask can now earn daily staking rewards on their ETH and contribute to the stability and security of the Ethereum network. To get started, head to [portfolio.metamask.io/stake](https://portfolio.metamask.io/stake?ref=blog.lido.fi). # **Staking ETH with Lido on MetaMask** Lido has been integrated into [MetaMask Portfolio Dapp](https://portfolio.metamask.io/?ref=blog.lido.fi) so users can stake their ETH directly with Lido through [the portfolio Dapp](https://portfolio.metamask.io/stake?ref=blog.lido.fi). 1. Visit [the MetaMask portfolio Dapp](https://portfolio.metamask.io/?ref=blog.lido.fi). 2. Connect to your MetaMask wallet. 3. Toggle to the [Staking tab](https://portfolio.metamask.io/stake?ref=blog.lido.fi) and select “**Lido Staked ETH**”. 4. Click “**Stake**”. 5. Enter the amount you want to stake and click “**Review**”. 6. Review the stake and click “**Confirm**”. 7. Sign the transaction using your wallet. ![](https://lh4.googleusercontent.com/dU6m-Kf1X0GsSdUmTWmmGZSIELM42e9RPBmuDEadvrUiFishDK7LzSrIoba0pVY2bDG7XWnqs-dkOPNF3sO74OKk6flqwmEEPM1K4sbWr8zEjX33ztGgIRhIxSruDpd7b2LJZvj-W5Dk7GngMgDFdJevDbcpEGevbnIVCOPxzYNv4eYjdONcpnLUEMd1IQ) To view your staking rewards, follow the steps below: 1. [Visit the portfolio Dapp](https://portfolio.metamask.io/?ref=blog.lido.fi). On the browser extension, you can click the ‘**Portfolio site**’ as well. 2. Connect to your Metamask wallet. 3. Toggle to the “**Staking**” tab. 4. On the **stake** page, you could see your holdings (e.g. stETH). For more information, check out ['Staking ETH Using Metamask'](https://help.lido.fi/en/articles/5230600-staking-eth-using-metamask?ref=blog.lido.fi). # **Staking Ethereum With Lido** Staking is the act of depositing, or locking, your ETH tokens in order to validate transactions on the Ethereum network. This in turn helps keep the Ethereum network secure, and lets you earn a reward for your efforts. When [staking Ethereum with Lido](https://lido.fi/ethereum?ref=blog.lido.fi), you no longer need to “lock” your tokens away, as is the case with many other staking providers. When you stake, you receive an stETH (staked ETH) token in return, which you can send, transfer, store and sell as you would with your regular ETH. The difference between your stETH and your regular ETH however is that your stETH *rebases* on a daily basis. ### What does rebasing mean? Rebasing means that the supply of your token updates every 24 hours - around 12pm UTC - as staking rewards come in. As an example, the 10 stETH i hold on the Monday will be 10.001 stETH on Tuesday, 10.002 stETH on Wednesday, 10.003 stETH on Thursday, and so on. These rewards will keep accruing for as long as you hold stETH in your wallet. Other benefits of staking with Lido include: - No minimum stake - stake any amount of ETH to get started. - Start earning rewards immediately. - Sell your stETH anytime to “unstake”. - Stake with proven and experienced node operators. # **What’s Next?** With Lido and MetaMask, users now have access to secure, convenient and easy staking, directly from their own wallet. Whether you are an individual staker, a DAO treasury manager or a seasoned trader, Lido makes it easy for anyone to earn rewards on their idle ETH. In the coming months, users will be able to unstake their stETH with Lido at the click of a button, whilst still benefiting from the simplicity of Lido. In the meantime, check out [portfolio.metamask.io/stake](https://portfolio.metamask.io/stake?ref=blog.lido.fi) to start staking with Lido and MetaMask. ### Post Mortem: Disrupted rewards distribution due to missed oracle reports URL: https://blog.lido.fi/postmortem-disrupted-rewards-distribution-due-to-missed-oracle-reports/ Last updated: 2023-01-30T15:13:22.000Z On November 9 and 11, 2022, Lido Oracle failed to report validator balance updates causing the rewards distribution to occur every other day instead of daily. Neither user funds nor accrued rewards were at risk or otherwise affected during the incident. The issue was [resolved on November 13](https://vote.lido.fi/vote/143?ref=blog.lido.fi), and the rebase cadence was restored to daily updates. ### What happened? Due to the extreme market conditions on the day of the incident, the protocol saw an unexpectedly high amount of execution-layer (EL) rewards. As a result, Oracle was unable to finalize reports because of an outdated security threshold for rewards. When the rewards exceeded this threshold, Oracle’s security check was triggered. Suspicious of the unusually high daily yield, the protocol put distribution on hold. Due to the intricacies of the check, balance updates were still delivered every other day. With the Lido DAO’s approval, the team resolved the issue by raising the security threshold with plans for a complete overhaul in the future. ### Why did it happen? Before the Merge, the only source of earnings was the consensus layer (CL), and the maximum APR across Ethereum was 10%. As such, Lido set up a security cap on the daily positive rebase at 10/365%. With the Merge hard fork, the protocol [started generating additional rewards](https://research.lido.fi/t/announcement-merge-ready-protocol-service-pack/2184?ref=blog.lido.fi) from the execution layer through priority gas fees and MEV and accumulating them on [a special vault](https://etherscan.io/address/0x388C818CA8B9251b393131C08a736A67ccB19297?ref=blog.lido.fi). These rewards are then re-staked with a daily limit of 0.02% of the total stETH supply (around 940 ETH at the time of the incident) to prevent sandwich attacks. Thus, EL rewards provide an additional APR of up to 7.3%. This made it possible for the protocol to exceed the 10% APR threshold and fail the security check—precisely what happened on November 9, a particularly profitable day for the protocol with the EL reward vault exceeding the 940 ETH limit by a large margin. The rebase still occurred every other day because the rewards spread over the previous two days. With the EL APR halved, the overall APR was able to slip under the 10% security threshold, and the user balances were updated. ![](https://hackmd.io/_uploads/Skw27fQFs.png) ### How did we fix it? In the few days following the incident, the team [launched an Aragon vote](https://vote.lido.fi/vote/143?ref=blog.lido.fi) to raise the security threshold to 17.5%, i.e., 10% plus 7.3% for CL and EL APR, respectively, as well as an additional 0.2% padding. The Lido DAO approved the change, and the threshold was updated. We apologize for any inconvenience caused by the missed updates. We are committed to preventing similar incidents in the future and ensuring timely reward distribution to users. We have thoroughly reviewed our processes and procedures and will be giving double attention to harmonizing security checks in the upcoming Oracle overhaul. ### Helpful links - [Merge-ready protocol service pack](https://research.lido.fi/t/announcement-merge-ready-protocol-service-pack/2184?ref=blog.lido.fi) - [Increasing max APR sanity check for Oracle Lido report](https://research.lido.fi/t/increasing-max-apr-sanity-check-for-oracle-lido-report/3205/1?ref=blog.lido.fi) - [Vote 143 page](https://vote.lido.fi/vote/143?ref=blog.lido.fi) - [About beacon-chain oracles](https://docs.lido.fi/guides/steth-integration-guide/?ref=blog.lido.fi#the-beacon-chain-oracle) - [Execution-layer rewards vault](https://etherscan.io/address/0x388C818CA8B9251b393131C08a736A67ccB19297?ref=blog.lido.fi) ### Distributed Validator Technology - Pilot w/ Obol Network URL: https://blog.lido.fi/dvt-pilot-with-obol-network/ Last updated: 2026-05-07T08:15:21.000Z ### Exploring Distributed Validator Technology with Obol Network Lido is excited to share the initial pilot integration with Obol Network, a Distributed Validator Technology (DVT) provider. This pilot demonstrated the benefits of running a Lido validator with DVT, and is a component of our goal to enable permissionless participation in Lidos’ validator set. Over the past month, eleven Lido node operators (NOs) have participated in a pilot on the Goerli testnet. Since activating, the validators have been performant, and one successfully proposed two blocks. ## The Benefits of DVT Lido puts great effort into creating a high-quality and distributed validator set, and DVT will further increase protection from single points of failure. Validators may experience downtime or underperformance for various reasons, for example, issues caused by client bugs, operator misconfiguration, connectivity issues, hardware failure, etc. While it is possible to mitigate some of the problems by increasing redundancy, it is more costly and can introduce other undesirable risks (e.g. double signing which could lead to a slashing event). Distributed Validator Technology enables multiple nodes to share the duties of an Ethereum validator; this novel approach improves resilience (safety, liveness, or both) compared to running a validator on a single node. Obol Network’s DVT solution is achieved via middleware called Charon to enable validators to run in a fault-tolerant, distributed manner. This is a major advantage that will allow Lido to scale and open up the permissionless operator set while mitigating relevant single-operator risks. ## Lido & Obol Network Pilot During the pilot, participants were split into two subgroups. The first group consisted of HashQuark, CryptoManufaktur, Nethermind, and Simply Staking; their cluster - HCNS-Lido is a 4-operator setup with a threshold of 3\. The second group included DSRV, Kukis Global, Chorus One, Staking Facilities, Blockscape, Everstake, and Stakely; their cluster - DKCSBES-Lido is a 7-operator setup with a threshold of 5\. Two groups of operators created entries in the Lido Node Operator registry by coordinating through a multi-sig. The creation of the clusters was done via the Obol DV Launchpad followed by coordinated distributed key generation (DKG) ceremonies to create deposit data and private key shares of the validators. A distributed validator key is a group of BLS private keys that together operate as a threshold key for participating in proof-of-stake consensus. To create a distributed validator that can stay online despite a subset of its nodes going offline, the key shares need to be generated together. To do this in a secure manner with no one party being trusted to distribute the keys requires what is known as a distributed key generation ceremony. Once created during a DKG, the key share signatures combine to create a validator key signature to propose or attest to a block. No single operator can recreate the validator private key or produce a signature for the validator on their own, nor do they have access to the key shares of others (unless stored improperly and hacked, or explicitly shared). ![](https://lh3.googleusercontent.com/1XoR4P17_UjIQUyEbW6SdZTy_9Qpqbe55oa-IwB_zSOma_V3CXuaN2hCTfCAd64HJpLJhPYYnX6fzi2j_Gm_SA03ujoXRrfX6N6pz3oSdCozEGgzXIIwlYSBwNoFt1KbK5XwZgKXmLAYEGEABt2gJwVvrjQeV_tcrJXYKa6-KdoOIzlbBzHTMZwqrmHQSw) ![](https://lh4.googleusercontent.com/CqaSJepbkvNYddwcL8eiIL95aj7rgVb3Wjggd0uCAymf7BKkGl_sZL3QwV4ZM8LdwhXk6iXk-vM8H1ru9iTO_epq9wQr_xc1ABOvmBhjLJxIwxiv7Hnmg7tK9j5XblxKM9seR-3r_Yk0ldHWl5befYcBbZin_bWEia92ZJKTtJWlJGaolIsr4Qs1Lvzg9A) Since the validators were activated, we see both validators have near-perfect attestation performance. There were occasions when an operator in the cluster experienced connection issues. For instance, on Nov 30th, one operator (twinkling-yesterday) in cluster DKCSBES-Lido was offline between Epoch 138760 and 138768\. Despite this we continued to see the validator successfully perform attestation duties without interruption, highlighting one of the many benefits of DVT. We also have seen two successful block proposals by cluster DKCSBES-Lido. ## Next Steps This initial pilot with Obol Network has shown that it's possible to run a secure and reliable distributed validator. We are pleased with the progress made in the past month and will continue additional testing with Obol and SSV Network in the new year. DVT is a critical component of Lido’s strategy to enable solo operators, and permissionless entry into the node operator set all while further decentralizing the stake in the protocol. We will continue to explore and design solutions that bring us closer to this goal. ### Solana V2 Update - What Does It Mean For Lido? URL: https://blog.lido.fi/solana-v2-update-what-does-it-mean-for-lido/ Last updated: 2022-12-16T13:04:53.000Z We are pleased to announce the successful upgrade of Lido on Solana to V2\. The upgrade took place between the 6th till the 8th of December with no issues. ### Background The first version of the Lido on Solana protocol [was made by Chorus One](https://research.lido.fi/t/lido-for-solana-proposal-by-chorus-one/527?ref=blog.lido.fi) (leading staking provider and Lido founding member) as part of the “Lido on X” initiative. Lido on X is the way for Lido, DAO-governed cross-chain liquid staking protocol, to bring liquid staking to the most promising blockchains. In April 2022, protocol development [transitioned ](https://research.lido.fi/t/lido-on-solana-proposed-transition-from-chorus-one-to-p2p/1887?ref=blog.lido.fi)to the P2P team (core members of the Lido DAO and the team responsible for liquid Ethereum staking on Lido). The P2P team formed a [validator set vision](https://p2p.org/economy/lido-on-solana-validator-set-vision/?ref=blog.lido.fi) and made a [promise ](https://blog.lido.fi/new-era-for-lido-on-solana/)while developing Lido on Solana to put efforts into increasing Solana network decentralization & performance and growing Solana DeFi economics. Since then, the new Lido on Solana team has been focused on growing and improving Lido on Solana and developing the second version of Lido on Solana. What has been accomplished in the past nine months? - Conducted two waves of onboarding, adding seven new operators to the pool to the final number of twenty-one. - LDO Incentivization Program for protocols. 4,405,908 LDO ($9,341,265) was distributed to Solana Defi protocols as user rewards (Q1 - Q3) to incentivize adoption. - Launched the referral program that attracted 1139 referrals. And finally, in December 2022, after nine months of hard work, the Lido on Solana team released the 2nd version of the program. ### What's In The Box To understand the changes made, let’s have a look into how Lido on Solana works. In contrast to its competitors, Lido on Solana works with a relatively small pool of trusted and highly performing validators. This approach has pros and cons to be discussed, but it can’t be ignored that Lido on Solana pool has been providing one of the highest APYs on the market since the start (6.11% APY on average for the last six months). But the main issue validators had to deal with in the first version of the contract was the necessity to set up a separate 100% commission node for Lido on Solana only. On the other hand, this gave the contract complete control of the nodes making the whole process much safer. The v2 update was mainly focused on improving the validators' economy but staying as safe and secure as possible. - It waived the necessity of 100% commission nodes so that node operators could use their public node in the Lido set. - Validators will receive block rewards and staking rewards in SOL (instead of stSOL) to their accounts directly. - Set the maximum node commission to 5% to be eligible to receive a delegation from Lido on Solana. These changes aimed to make the life of the node operators easier and more profitable, securing Lido on Solana stakers at the same time. It is hard to imagine an operator increasing commission in order to ‘cheat’ with Lido on Solana's trusted pool. Still, If the validator increases its commission above 5%, it is immediately deactivated, and its stake is redistributed between other validators in the set. This protects stakers from the unscrupulous actions of validators, which increase fees at the end of an epoch to take away users' rewards. ### How The Upgrade Was Done It is well-known that Lido is managed by Lido DAO, so in order to make any change, the development team proposal should go through the governance process: 1. Create a research forum and get some community feedback [research.lido.fi/t/lido-on-solana-protocol-upgrade-proposal/2959](https://research.lido.fi/t/lido-on-solana-protocol-upgrade-proposal/2959?ref=blog.lido.fi) 2. Create a gasless Snapshot voting proposal and wait for the DAO decision. [snapshot.org/#/lido-snapshot.eth/proposal/0x5844beba37131b3621c5c96621603db7cb7e2771d1c690dc6869ebd117e12abb](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x5844beba37131b3621c5c96621603db7cb7e2771d1c690dc6869ebd117e12abb) 3. And, of course, every update should withstand an external security audit. This upgrade was checked by Neodime in advance. [reports.neodyme.io/reports/lido\_v2\_report/](https://reports.neodyme.io/reports/lido%5Fv2%5Freport/?ref=blog.lido.fi) Only after that, the change can be performed. The upgrade was not a simple task as it altered the very foundation of the contract. You can find out more about this process in the [P2P validator blog post](https://p2p.org/economy/lido-on-solana-upgrade-announcement-and-timeline/?ref=blog.lido.fi), but the important thing is how the Lido on Solana contract is managed. Recently, Neodyme created an exciting[ thread](https://twitter.com/Neodyme/status/1591496755258040327?ref=blog.lido.fi) about the upgrade authorities of the top 10 TVL projects. Every Lido on Solana protocol change is performed by a multisig - decentralized option for managing the upgrade authority, where several known entities have to sign the upgrade instruction. There are seven members of the Lido multisig on Solana, requiring four approvals to effect any changes. You can look deeper into it [here](https://docs.solana.lido.fi/administration?ref=blog.lido.fi), but right now, they are ChainLayer, Chorus One, Figment, Mercurial, P2P, Saber, Staking Facilities. ### Summary Thank you to all of our stakers and constituent Node Operators in Lido on Solana for your assistance and flexibility through this process. The Lido on Solana contract upgrade proved that the Lido on X initiative itself is a good way to provide liquid staking cross-chain. The Lido on Solana team showed excellent results in improving the protocol and growing the overall Solana Defi economy. We remain committed to the Solana ecosystem and are excited to expand DeFi opportunities for the broader Solana community. ### Lido on Ethereum 'VaNOM' - Validator & Node Operator Metrics URL: https://blog.lido.fi/lido-vanom-validator-node-operator-metrics-release/ Last updated: 2026-03-06T12:45:42.000Z ### Keeping track of validator set distribution with ease. As part of our commitment to decentralization as well as efforts to identify and minimize risks related to validator operators, Lido is pleased to present VaNOM - validator and node metrics reports for Lido on Ethereum **Check out** [**VaNOM**](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi) **here.** There are automated ways to collect and present metrics over Node Operators participating in Lido and the validators which they run, and Lido supports these initiatives via [LEGO grants](https://www.lido.fi/lego?ref=blog.lido.fi) and contributors work closely with these providers to ensure that the data is as accurate and complete as possible. While Lido is working on incorporating this data into its own metrics, this data is not always accurate as it approaches the data collection problem using heuristics. For Lido’s reporting, the main data set consists of self-reported data from Node Operators who participate in the protocol, collate, clean, and aggregate the data for reporting. Previously, there was no good way to track or compare the metrics across different periods, but with improvements to the data gathering and reporting processes it is now easier to incorporate updates consistently across different reporting periods. ![](https://lh6.googleusercontent.com/NKI6rSjk5BuhlMaBBXWIUHD_xjqA0gg7AGJa5HwpEobjtv8GtlGF9s2I3KJI118UdaEOkcssO2JKFLZlyibTs4Yt96kLSS1HMs4LeOk4wp0iHePZuEFAvruj2_q4IWbuKlMBQHwACcTah--X56oB8f0Duf0iiAiHy5R4vbzSsmfVjNGU9MRVqdjZckKQnw) # **What is VaNOM?** The Lido on Ethereum validator and node operator metrics app ('[VaNOM](https://app.hex.tech/8dedcd99-17f4-49d8-944e-4857a355b90a/app/3f7d6967-3ef6-4e69-8f7b-d02d903f045b/latest?ref=blog.lido.fi)') allows users to view a variety of metrics related to the protocol's validator distribution across specific points in time. VaNOM provides a more granular method for users to view the infrastructure distribution of Node Operators participating in the protocol, adding transparency and visibility into Lido’s status and health. The metrics presented include information about client diversity, infrastructure, geolocation, and jurisdiction dispersion. ## **Using VaNOM For 'Lido on Ethereum' Insights** In order to paint a more accurate picture of the protocol’s status, we consolidate various data sources, including on-chain data, self-reported information, and other metrics gathered through third party APIs such as Rated and Miga-labs. For example, using VaNOM users can see the use of both execution and consensus clients across the various Node Operators. It also shows some interesting quarter-to-quarter changes, for example, a shift in client diversity post-merge for both execution and consensus layer clients, which can also be compared to the overall Ethereum network. However, due to the limitations of the network wide data collection methods, it's important to be careful when comparing these different sources. By tracking these metrics, users can gain valuable insights into how the protocol is performing and identify potential areas of over-reliance. Based on such data, we can make informed decisions on areas of future iteration and focus. ## **What's Next?** Lido is constantly evolving and improving, we are always working on new features and improvements. In the future, we plan to add additional features such as a side-by-side comparison of different time periods, improving the granularity of data, and the inclusion of other data sources so that users can directly compare the different data sets to each other (e.g. self-report, rated.network, realtime on-chain data, etc). As always, it is very helpful to have a community of fellow users to exchange ideas. We welcome your feedback and comments. Please reach out to us via our [Discord](https://discord.com/invite/lido?ref=blog.lido.fi), [Forums](https://research.lido.fi/?ref=blog.lido.fi), or [email](mailto:nom@lido.fi). ### Lido on Ethereum: DVT Pilot with SSV Network URL: https://blog.lido.fi/ssv-network-pilot/ Last updated: 2026-06-04T09:09:30.000Z Over the past month, as a part of the execution strategy for [Lido’s Next Chapter](https://blog.lido.fi/the-next-chapter-for-lido/), Lido has conducted an initial pilot integration of Distributed Validator Technology (DVT) with [SSV Network](https://ssv.network/?ref=blog.lido.fi) on the Goerli testnet. Eight Node Operators (NOs) participated in these initial tests by creating Lido-specific SSV Operators, running a shared Operator in the Lido Node Operator Registry on Goerli, and successfully operating performant validators using the SSV protocol. ### Why DVT? Distributed Validator Technology enables multiple Node Operators to run distributed validators, decreasing single points of failure and providing important benefits across decentralization and diversity, infrastructure resilience, and security. Additionally, Lido anticipates that DVT will play a crucial role in the path towards enabling permissionless validation for the protocol. By integrating DVT solutions, Lido will be able to add validators run by a mix of permissioned and permissionless actors, as well as reduce relevant operator risks for validators created by the Lido permissioned Node Operator set. DVT will allow Lido to increase the decentralization and stake distribution of the protocol by allowing a far greater number of stakers to participate as node operators, while still maintaining the benefits of a permissioned set (for more information regarding Lido on Ethereum metrics see the [Q2 update](https://research.lido.fi/t/lido-node-operator-validator-metrics/1431/9?u=kimonsh&ref=blog.lido.fi)). Lido is committed to allowing solo stakers to participate in the protocol, and DVT is among the most important mechanisms for this to be enabled. ### SSV Network Integration As part of Lido’s continued [commitment to researching DVT technology](https://research.lido.fi/t/lego-strategic-commitment-to-research-of-ssvs-blox-staking-obol/817?ref=blog.lido.fi)**,** Lido Node Operators conducted the first tests of SSV Network’s Shifu Testnet. Two groups of operators created entries in the Lido Node Operator registry by coordinating through a multi-sig, creating Lido-specific SSV Operators, and splitting a validator key between the respective group members. Over this time both of these distributed validators have shown consistent attestation performance, even in certain cases where a given operator missed their attestation duty. The two Operators in the Lido Node Operator registry are SSV-KCCA and SSV-DHRR. The first group consists of Kukis Global, Chainlayer, Cryptomanufaktur, and Allnodes, the second of DSRV, HashQuark, RockLogic, and RockX. Both SSV-KCCA and SSV-DHRR’s validators have shown consistent attestation performance above 80% (note that average validator performance on Goerli is lower than on mainnet). Although both validators have missed a block proposal, this is due to a limitation of the current SSV Network Shifu testnet implementation. The performance of the individual operators for both SSV-KCCA and SSV-DHRR can also be viewed below. ![](https://blog.lido.fi/content/images/2022/10/Screen-Shot-2022-10-26-at-16.21.02.png) Source: SSV Network explorer This first trial of setting up SSV operators tied to Lido has demonstrated the ability of Lido Operators to operate performant validators using the SSV protocol. Lido will continue to work with SSV Network to expand our testing under different scenarios and as new features are added to the protocol. ### Next Steps While SSV’s Shifu testnet has demonstrated proof of concept for Lido to implement DVT, there are still a number of changes that need to be made (both on Lido’s as well as SSV Network’s side) and further testing that will need to be undergone before a mainnet launch. As further enhancements are made (such as support for block proposals, distributed key and deposit data generation, and multi-sig support), Lido will conduct further tests with the broader Node Operator set to “stress test” our procedures at scale. Among these features, zero coordination DKG will be a critical element of our strategy to reduce the trust requirements currently necessary for creating and submitting validators. Lido Node Operators have started to conduct similar testing with [Obol Network](https://obol.tech/?ref=blog.lido.fi), where DKG ceremonies will be held to create distributed validators between groups of Lido Node Operators. Over the coming months the protocol will conduct additional testing with Obol and SSV to better understand how Lido Node Operators can best utilize the protocols to improve decentralization, infrastructure resilience and distribution, and overall security of staking assets. Over the coming months we will continue to update the community on Lido’s progress with DVT testing and experimentation, and our plans to adopt the technology on mainnet. ### Ethereum Fee Monitoring Dashboard URL: https://blog.lido.fi/ethereum-fee-monitoring-dashboard/ Last updated: 2026-05-11T15:44:33.000Z A critical facet of the [Lido on Ethereum Block Proposer Rewards Policy](https://research.lido.fi/t/discussion-draft-for-lido-on-ethereum-block-proposer-rewards-policy/2817/1?ref=blog.lido.fi#lido-on-ethereum-block-proposer-rewards-policy-1) is the appropriate monitoring of each Lido Node Operator’s behaviour when it comes to their MEV reward extraction and distribution for the protocol. These elements include determining whether: - Node Operators are behaving as intended. - Participants (e.g. block builders, relays) in the the block building process are acting in good faith and as expected. - Normal validator and protocol operations are not adversely affected by the running of MEV-related infrastructure. Given the respective stake that each Lido Node Operator manages, it is critical for both the DAO and broader Ethereum community to have accessible monitoring into how Node Operators for the Lido protocol operate their validators when it comes to the extraction of MEV. The Lido tooling team is pleased to share [https://fees-monitoring.lido.fi](https://fees-monitoring.lido.fi/?ref=blog.lido.fi) and [https://fees-monitoring-hoodi.testnet.fi/](https://fees-monitoring-hoodi.testnet.fi/?ref=blog.lido.fi) as ways for the public to track statistics related to block proposals. These public dashboards offer users the ability to see the total proposed blocks, missed blocks, and relays used by each Node Operator’s related validators over a given period of time. ### Fee Monitoring Dashboard The dashboard consists of three main sections: Node Operators, Slots, and Payload Source. The Summary page of the Node Operators section displays a high-level overview of all Lido block proposals and each Node Operator’s usage of MEV-Boost over a defined period. By clicking on a specific operator, users can track recent block proposals, the fee recipient, and the relay used to propose the block. The Slots section provides an overview of all Ethereum blocks proposed and summarizes usage of the appropriate fee recipient for blocks relating to Lido validators. The Payload Source section shows the number of proposed blocks that correspond to the “Must Include” and “Allowed Lists” as described in the MEV extraction policy and further detailed in [LIP-17](https://research.lido.fi/t/lip-17-mev-boost-relays-allowed-list-for-lido/2885?ref=blog.lido.fi) and [Lido’s Call for Relay Providers](https://research.lido.fi/t/lido-on-ethereum-call-for-relay-providers/2844/11?ref=blog.lido.fi). As these lists have not yet formally been been defined given that a variety of relays are being used during the slow roll-out period in order to put relays through their paces, the data in the Optional PS (Payload Source) and Required PS columns do not accurately reflect the classification of relay used. It should also be noted that “vanilla”-built blocks also show up as “Unknown PS”. ### Lido MEV-Boost Update As of 17/10/22, 85% of Lido Node Operators are currently using MEV-Boost with at least a portion of their Lido validators. Over the past 7 days, 49% of proposed blocks have come from the Flashbots relay, 11% from the three bloXroute relays, 5% from the Eden Network relay, and 4% respectively from both the Manifold and Blocknative relays. Lido Node Operators are continuing to test relays that publicly expressed interest to the DAO and are increasingly diversifying the number of relays enabled by their validators. With the [soft-rollout period](https://hackmd.io/No2SULzlSVytoWOJ2Wqa7g?view&ref=blog.lido.fi#D5-Currently-prescribed-solutions) coming to an end over the coming weeks, the initial “Must Include” and “Allowed Lists” will be reviewed and updated (via a vote) with the overall Block Proposer Rewards Policy. ### Monitoring Next Steps The [**fees-monitoring.lido.fi**](https://fees-monitoring.lido.fi/?ref=blog.lido.fi) dashboard is an important first step that demonstrates the DAO’s commitment to transparency regarding MEV extraction and distribution for the protocol. The Lido Tooling team is continuing to work on adding new features but would love to hear any suggestions for other metrics that should be tracked and displayed for public use. ### Additions to the Lido on Solana Node Operator Set - Wave 3 URL: https://blog.lido.fi/additions-to-the-lido-on-solana-node-operator-set-wave-3/ Last updated: 2023-09-12T05:12:49.000Z ### The DAO has approved 2 new Node Operators for the Lido on Solana operator set with mainnet onboarding currently underway. During August and September of 2022, an onboarding round was held for the Lido on Solana protocol for the inclusion of additional Node Operators into the operator set. This round differed from prior onboarding rounds; following the [Solana Wave 2 evaluation](https://research.lido.fi/t/announcement-lido-on-solana-wave-2-onboarding/2120/3?ref=blog.lido.fi), the Lido Node Operator Subgovernance Group (LNOSG) determined that a separate evaluation should be held to evaluate node operators interested in joining the Solana staking ecosystem with the help of Lido. The Solana Wave 3 round was essentially a pilot program to determine how feasible it is for Lido to bring net new operators into the Solana ecosystem. This round demonstrates Lido’s continued commitment to its [Operator Set Strategy](https://research.lido.fi/t/lido-operator-set-strategy/2139?ref=blog.lido.fi), specifically improving the decentralization of the underlying protocols on which Lido operates, in this case by increasing the number of validating entities on the Solana blockchain. Following the evaluation of 21 applications (of which 16 were eligible for inclusion) by the LNOSG, 2 operators were shortlisted and sent to the DAO for approval. Additionally, 1 operator was waitlisted, meaning they will be officially proposed to the DAO for onboarding in the event that either shortlisted Node Operator displays sustained poor performance over the coming months. The shortlist was finalized and approved [via snapshot on September 16th 2022](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x933548c6f64dea6b12b9ff589c8d4ec3ac5bf74906a738e7fbfb7831c149975c). More information about the application and evaluation process can be found on [Lido's forum](https://research.lido.fi/t/announcement-lido-on-solana-wave-3-onboarding/2715/6?ref=blog.lido.fi). Both of the shortlisted operators have begun the mainnet onboarding process and will be active members of the Lido on Solana operator set in the coming days, with the Lido on Solana team overseeing the validator setup process. Below you can find a description and statement for each of the operators joining our Solana Operator set (listed in alphabetical order). | [![H2O Nodes](https://blog.lido.fi/content/images/size/w1000/2022/09/H2O_Nodes_logo-_A2_1.png)](https://h2o-nodes.com//?ref=blog.lido.fi) | Strong believers in liquid staking but concerned by the over-reliance of blockchains and staking pools on cloud-based validators, H2O Nodes offers on-prem infrastructure in underrepresented countries to improve the diversity of node operator sets. With a combined 75 years of experience running on-prem infrastructure, we run a bare metal setup out of a data center with multiple 100 Gigabit Ethernet (GigE) connections, and are the only Solana validator to run out of this data center. We look forward to working together with Lido to improve validator onboarding and monitoring, publishing enough information about our infrastructure to satisfy institutional stakers, and experimenting with new technologies like MEV and new clients. | | ----------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | [![Kukis Global](https://blog.lido.fi/content/images/2022/06/KG_transparent.svg)](https://www.kukis-global.com/?ref=blog.lido.fi) | Kukis Global is a Web3.0 infrastructure and service provider. We’ve offered secure and reliable non-custodial validator services since 2018 and provide accurate data for Chainlink and The Graph. We use a dedicated geographically distributed infrastructure to ensure we can offer the best services. We are very excited to join the Lido node operator set on Solana, and we are looking forward to contributing more to the Lido ecosystem. | ### Future Onboardings The Lido on Solana protocol will be undergoing a smart contract update in the coming months which potentially will allow Node Operators to migrate their existing public node into the Lido on Solana validator set if they so choose. Given this pending change, the next Solana onboarding round is likely to be held sometime in Q4 or Q1’23, depending on overall market conditions. ### The Ethereum Merge - Frequently Asked Questions (FAQ) URL: https://blog.lido.fi/the-ethereum-merge-faq/ Last updated: 2023-09-12T05:13:35.000Z What does the Merge mean? How does it impact ETH stakers? WHat does it mean for the Ethereum network as a whole? Get up to speed with all things Merge-related below with an overview of the most frequently asked questions. 👇 ### What is the Merge? The Merge is an important milestone in the development of Ethereum. With the Merge, Proof-of-Work (PoW) Ethereum will migrate to become Proof-of-Stake (PoS) Ethereum, and the PoW Consensus Layer mechanism will be shed in favor of the PoS one. You can learn more at [**ethereum.org/en/upgrades/merge**](https://ethereum.org/en/upgrades/merge?ref=blog.lido.fi). ### When will the Merge take place? The Merge is scheduled to take place on or around September 14th (subject to change) at a Total Terminal Difficulty of 58750000000000000000000\. Progress can be tracked using [wenmerge.com](http://wenmerge.com/?ref=blog.lido.fi). ### Is it safe to stake during the Merge? It is safe to stake during the Merge and Lido users will not be affected, with rewards continuing to accrue on a daily basis. Ethereum as a network will continue to function during the Merge transition, but there may be some drop in participation rate and some general bumpiness in the hours around the event itself. ### What will happen after the Merge? Following the Merge, Ethereum will transition from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism. The most important effect of this transition is that mining will no longer have a place in Ethereum, as blocks in Proof of Stake are produced by validators. It is expected that the energy required to power the Ethereum blockchain will drop by over 99%. ### What does the merge mean for stETH? The merge does not affect ETH staked in the beacon chain which is still locked until a future upgrade on Ethereum. stETH will continue to exist and serve the same purpose it does now: act as an unlocked, liquid, and composable representation of the stake and staking rewards of nearly 100,000 users. ### Will the Merge affect my staking rewards? In PoS Ethereum after the Merge, validators will earn priority fees and potential MEV rewards. Both of these types of rewards will be staked by Lido validators to increase the stETH rewards available to users. As such, extra staking rewards will accrue to stakers post-merge resulting in an increased staking rewards. ### Will I be able to unstake (/withdraw) after the Merge? No, direct unstaking will not be possible until the hardfork after the Merge (codename Shanghai, estimated 6-12 months after the Merge). Stakers can still swap their stETH to ETH to effectively unstake using secondary markets (Curve, Uniswap) until then. ### What do I need to do as an ETH holder? Nothing - no changes are required and the Merge will not affect your tokens or balance. Take care of your positions if you are borrowing or lending ETH as rates may be a little volatile surrounding the event. ### What do I need to do as an ETH staker? Nothing - you will continue to earn daily stETH staking rewards throughout and after the Merge, and you will continue to be able to swap stETH on secondary markets after the Merge. Take additional care if you are staking with leverage using DeFi platforms like Aave or Maker. ### How will the Merge affect Lido? Lido will continue to exist as a liquid staking platform post-Merge and provide users with liquid and highly-accessible staked Ethereum. There will still be value in stETH as an integrated DeFi building block across Ethereum and allow for a variety of customizable staking strategies. Additionally, the Merge will result in a higher APR/staking rewards for active stakers. For more information, check out [Lido and the Merge](https://blog.lido.fi/lido-and-the-merge/). ### Will Lido support ETHPoW? Lido has been built to be a core pillar of PoS Ethereum and as such has no plans to support ETH PoW. There have been no gov proposals to do so, so unless there is one, Lido will not support the distribution of ETH PoW tokens to stETH holders. ### How will the merge affect ETH tokenomics? (i.e. emission rate/dilution, burn, etc - why does the merge make ETH potentially deflationary) The Merge will impact the rate of issuance of Ethereum's native asset ETH. When combined with the previous EIP-1559 upgrade that introduced ETH's fee-burn mechanism, there is a higher probability that ETH's price will be positively impacted by The Merge in the long-term. That being said, this is contingent on growing network adoption, and multiple external factors. ### Risk to Ethereum post-merge (i.e. risks associated with PoS networks vs PoW) PoS does not have the same proven track record as PoW, and some claim could introduce centralization and security risks associated with large capital pools acquiring large shares of the network stake. ### What does the Merge mean for L2 and scaling solutions? The Merge will not affect Ethereum's ability to scale. Ethereum will still rely on Layer 2 and alternative scaling solutions in order to make its decentralised applications more efficient and affordable to users. As a result, Layer 2s will be increasingly important to support Ethereum's growth and adoption. ### How will the Merge affect gas fees (transaction fees) on Ethereum? (Does the merge lower transaction fees) Gas fees will not be impacted by The Merge. Future developments such as danksharding and proto-danksharding may help, but are not planned to be released in a proximate timeline. ### Does the Merge increase Ethereum transaction speed? Proof-of-Stake will issue blocks in 12s intervals, which is only slightly above the current Proof-of-Work average of 13-14s. This change is unlikely to be significant, and will not compete directly against the efficiency of other layer 1 rivals. ### How will the Merge impact Ethereum's energy consumption? According to the Ethereum Foundation, PoS is estimated to decrease Ethereum's energy consumption by 99.95%. **For more information related to the Merge, what it means and how it affects stakers, check out our article on [Lido and The Merge](https://blog.lido.fi/lido-and-the-merge/).** ### Analysis of stETH User Behaviour Patterns URL: https://blog.lido.fi/analysis-of-steth-user-behaviour-patterns/ Last updated: 2026-08-22T11:33:17.000Z ## 00 TL;DR In an effort to better understand Lido users’ behaviour, below is a cohort analysis of various wallet sizes. We have come up with a classification system for wallets of different sizes, from Whales (>=10k stETH) all the way down to Plankton (<1 stETH). The Lido ecosystem is diverse: a little more than 5% of all stETH addresses belong to the big wallets (so called Whales, Orcas, Dolphins, Fish, with more than 100 stETH). The rest of the addresses (95%) belong to the wallets with less than 100 stETH, known as Shrimp, Krill and Plankton. In short, the major behaviour patterns of Lido users can be described as direct staking and passive holding, but if we dive deeper it’s not so simple. For many small wallets direct staking is the only source they choose (83% of them are direct stakers). At the same time big wallets tend to diversify stETH sources: 54% of big wallets use direct staking, but they are also buying on DEX (49%) and receiving stETH from EOA and CEX (38%). Passive holding is the most popular strategy among stETH users, aside from Whales. On average it was chosen by about 71% of Lido users, but by only 43% of Whales. Big wallets are more active on the secondary market than the small ones e.g., more than 25% of big wallets use liquidity mining, more than 16% use stETH as collateral, including leverage staking. As for Lido users' loyalty (talking about wallets with >=1 stETH on the balance), an average period of stETH holding is about 225 days for now. Currently more than 82% of wallets have been with stETH on balance for more than 3 months, and more than 58% - for more than half a year. Retention analysis reveals that 23% wallets that joined in December 2020 have been staying with Lido from the very beginning until now. Current retention rate of 55% shows that over a half of the wallets that have ever interacted with stETH are still holding stETH/ its derivatives on their balance. We intend to track these retention and loyalty metrics over time. ## 01 Introduction Do you know that Lido is a leading liquid staking protocol on Ethereum? Sure, you do. But who are the folks that stake with Lido? What strategies do they use? And how loyal are they to Lido? If you want to know, listen to our story. To understand better our stETH users we split them into several categories (from Whales to Plankton) and then started to explore their behaviour and answer the questions: - How do they get and use stETH? - How long do they stay with Lido keeping stETH on their balance? You may ask - Why do we yearn to answer these questions? - and moreover - Why do we share this information with you? - It’s not a secret, because - Lido wants to encourage people to use its products - Lido plans to incentivize the loyalty of its users, e.g. we launched the Lido club that opens its doors for those who stay for long - Lido wants to become more transparent to its users The time frame for analysis covers a period from the date when stETH was launched - December 18, 2020 - to August 16, 2022\. Our final data sample includes 90,996 unique stETH addresses. All the data was retrieved from Dune.com. The charts are built on Dune or based on the data taken from Dune. For more actual information use our dune [dashboard](https://dune.com/sam%5Fla/behavioral-patterns-analysis?ref=blog.lido.fi) ### Limitations of research: - This research is focused on the Ethereum mainnet ecosystem, while Lido provides its services on several blockchains - In this research we analyse simple wallets (EOA) and contracts including Gnosis Safe, Instadapp accounts and Argent wallets as they stand out from other smart contracts and behave quite similar to the regular wallets. Complex smart contracts are excluded from our analysis as they usually have a narrow specialisation that doesn’t allow them to use the whole variety of investment strategies - The wallet size was calculated as the amount of stETH inflow during the period of research. The application of a more accurate calculation method, e.g. stETH highest historical balance, would probably change the picture - Plankton wallets (<1 stETH) are excluded from loyalty analysis due to the technical limitations - Holding stETH on the balance is considered as continuous while in practice wallets may have breaks in stETH holding - The first day of holding stETH might be determined wrong if a wallet received wstETH or another stETH derivative for the very first time earlier than stETH ## 02 How big are the fish? Let’s start our story from the very beginning - from our first question: Who are the Lido users? To answer this question we extracted all addresses (91,145 in total) that have ever received stETH and/or wstETH for the analysed period (December 18, 2020 - August 16, 2022). Then we excluded the complex smart contracts (149 addresses). Our final sample counts for 90,996 addresses including simple wallets (EOA) and some contracts including Gnosis Safe, Instadapp accounts and Argent wallets. To keep it simple we call these addresses “wallets”. Our acquaintance with Lido users began just like a normal one - from getting to know the names: we distinguished 7 categories of stETH wallets - from Whales to Plankton. ### stETH users by wallet size ![](https://blog.lido.fi/content/images/2022/08/--------------2022-08-19---10.14.41.png) Just to compare: Whales, Orcas and Dolphins together represent only 1.13% of addresses, together with Fish they get 5.25%. The rest of Lido users (94.75%) had less than 100 stETH inflow in the analysed period. ### FYI: - Matching category name and wallet size was done due to our research tasks, but based on the common crypto practice and narrative - Wallet size was calculated as the total amount of stETH & wstETH inflow from staking, buying on exchanges and transferring from other wallets during the period of analysis ## 03 Behavioural patterns of stETH users ### Getting stETH: How did they get it? There are 3 main sources of stETH exploited by Lido users: - Staking - Buying on DEX - Receiving from EOA and CEX We compared sources of stETH used by bigger wallets with >=100 stETH and those with <100 stETH inflow. ### Sources of stETH used by wallets ![](https://lh3.googleusercontent.com/hsSrEfNWE6AIQbhYdqH17SdThcto6nkyDmoPkG7Pb_4QWO_Sswrw_wfo5UiHGby8web_0mm-1n2cS_fg7hwLEO--aAM-o6bRJTGR5NzQgL-ltflQQktuxVRyEX7JjQ9tSzC_-9iCDMRIhGT164uhErk) Big wallets (from Whale to Fish) are more eager to use different sources of stETH than small ones: - in 54 cases from 100 they use direct staking - in 49 from 100 - buying on DEX - in 38 cases from 100 - receiving stETH from EOA and CEX Some of them get stETH from all three sources. In other words, big wallets tend to diversify stETH sources. In contrast, small wallets (from Shrimp to Plankton) prefer direct staking to the other sources: 83% of them are direct stakers. ### Managing stAssets The next step was to identify wallets strategies that they apply while managing their stETH. We identified 6 strategies, namely: 1. Selling stETH on DEX 2. Liquidity mining (providing stETH/wstETH liquidity to DEX pool) 3. Leverage staking (using stETH as collateral for ETH loans in AAVE pool) 4. Using stETH/wstETH as collateral for non-ETH loans in AAVE & Maker pools 5. Depositing stETH to Anchor (from Anchor launch on Apr. 23, 2021 to Aug. 16, 2022) 6. Passive holding (exclude other strategies except holding, selling on exchanges and sending tokens to other wallets) Please note that a wallet may use different strategies in case it’s not a passive holder. The table shows the popularity of stETH wallet strategies depending on the wallet size. ### Strategies used by stETH wallets ![](https://blog.lido.fi/content/images/2022/08/--------------2022-08-19---10.18.10.png) In general, big wallets are more active on the market and tend to implement a wider range of strategies than the small ones: - Liquidity mining used by more than 25% of big wallets - Leverage staking was hardly seen in small wallets practice (less than 1.5%), but used by >18% of Whales - Using stETH as collateral for non-ETH loans (usually loans in stable coins) is most popular among Whales and Dolphins (>18%) Anchor column shows that 6.4% of stETH users might have been affected by the Terra collapse. Passive holding strategy is the most popular one and adopted by more than 71% of Shrimp, 81% of Krill and 65% of Plankton wallets. But only 43% of Whales prefer passive holding. ### FYI: - To be counted, a strategy should be used at least once in a wallet lifetime - Total share (the last row in the table) is calculated as the total number of wallets that have used a particular strategy divided by the total number of stETH wallets ## 04 Focus on: loyalty of stETH users To find out how loyal are stETH users to Lido, we analysed all wallets with a balance >= 1 stETH at the moment of research (August 16, 2022) (including all the stETH derivative forms). Plankton wallets (<1 stETH) are excluded from loyalty analysis to not mix up wallets by size (by inflow) and wallets by their current balance. To analyse the loyalty of the current stETH users we calculated the number of days they stayed with Lido: *Period of stETH holding = today - day of the first inbound stETH transaction (days)* ### Loyalty of stETH users ![](https://blog.lido.fi/content/images/2022/08/--------------2022-08-19---10.27.55.png) The pie chart shows how long stETH wallets have been holding stETH: - 82.1% wallets (blue, green and yellow sectors) have been with stETH on the balance for more than 3 months - 58.8% (blue and green sectors) - for more than 6 months - 14.7% (green sector) - for more than 1 year ### Average periods of holding stETH on the wallet balance, days ![](https://lh4.googleusercontent.com/Cq_o7U1fBG8cfET_x-AOjmF_nfHu1vUUt6aZiJGx1gW69sZuJLG6dn3_xOVKcYwiD5mo3K1a-n2RdgdUBDm7BaMCj4iunWHihtj1J_1KuzX0Dq5Df_H2fT3pOeQjErR9U48SMuarTrLlmJGAnm-iDTA) The bar chart shows how long the current stETH users have been staying with Lido. The average Whale has stayed with Lido less than other wallets - 210 days at the moment of research presumably due to 2 factors: - Whales are more mobile and frequently change their preferences and wallet addresses - Large investors and especially institutional players are prone to hesitation and waiting for the market to develop Wallets of all categories have been with Lido in a range of 210 to 240 days that reveals similarity in stETH user behaviour patterns. On average the stETH user has stayed with Lido for about 225 days. ### Retention analysis To understand better the life cycle of stETH wallets we used retention analysis technique that was adapted to the blockchain: - The first inbound transaction with stETH was considered as a starting point to track the retention of the wallet - The last moment when the wallet balance fell below 1 stETH was recorded as abandoning of Lido products (at least for now). The rest were considered as retained stETH wallets. Plankton wallets were excluded from retention analysis. Retention rate reveals the percentage of retained stETH users during the analysed period. It was calculated for each month cohort and for the whole period of research. Current retention rate is about 55% for the selection of 46,201 stETH wallets. Retention matrix reveals that: - 23% wallets have been staying with Lido from the very beginning (from December 2020 cohort) - \>33% wallets retained from the first half of 2021 - \>60% wallets retained from those who joined Lido since July 2021 till now Just to compare: 1-month [retention rate for crypto apps](https://www.adjust.com/blog/crypto-mobile-2022-series-part-5-stickiness-retention/?ref=blog.lido.fi) is hardly over 20%. An eight-week [retention rate for the finance industry](https://www.omniconvert.com/help/kba/what-is-the-average-retention-rate/?ref=blog.lido.fi#:~:text=Average%20Retention%20Rate%20calculates%20the,purchasing%20after%20the%20first%20one.) is considered high if it's over 25%. The Terra crisis had influence on the behaviour of stETH holders: since May 2022 stETH users leave faster than before the crisis, e.g., 3-month retention rate was in the blue sector (>=76%) during one year before ‘Terragedon’, and since May 2022 even 2-month retention is in the green sector. ### **Retention matrix (%)** ![](https://blog.lido.fi/content/images/2022/08/--------------2022-08-19---10.33.51-1.png) Retention rates are marked by colour: - < 25% - red - 26-50% - orange - 51-75% - green - 76-100% - blue ### FYI: - Cohort retention rate = ratio of the number of wallets with >=1 stETH on the balance at the moment of research that joined in a certain period of time to the total number of wallets that joined during this period - Current retention rate = ratio of the number of wallets (with >=1 stETH on the balance) at the moment of research to the total number of tracked wallets ## 05 Conclusion: What’s next? *Course for further diversification.* Diversification and the big share of small wallets (almost 95%) bring a balance to the Lido ecosystem. We desire to be attractive to wallets of all sizes and will adhere to this philosophy in the future. *Direct staking is not the only source of stETH.* We saw that direct staking is the most popular way to get stETH, especially among small wallets (83% of them stake directly). We want our users to be better informed about other sources of stETH, especially of buying stETH on DEX with a discount that could bring our users higher returns. *Course for active stETH users.* Among all strategies used by stETH holders, passive holding is less profitable, but still the most popular one (used by 71% of stETH wallets). Lido is yearning for more active stETH holders that receive higher APY using stETH widely on the DeFi market. So we intend to make active strategies e.g., liquidity mining or using stETH as collateral, more attractive/profitable and easy to use. *Longing for your loyalty*. Lido aims to increase the loyalty of stETH holders because it brings more sustainability to the Lido ecosystem and higher rewards for its users. Current stETH users stay with Lido for more than 7 months and we want them to stay more. Lido loyalty gravitates to stETH users who actively manage their stAssets in the long run. *Not By Ether Alone.*And finally we should add that this research is focused on Ethereum users only, but we plan to expand it to all chains of Lido presence including Solana, Polygon, Kusama and Polkadot and Layer 2 solutions. ## Authors' contributions: Sam Morozov / [@sammy\_moroz](https://twitter.com/sammy%5Fmoroz?ref=blog.lido.fi): original draft, code writing, data fetching, data analysis, visualisation, validation, review & editing. Irina Katunina / [@ikatunya](https://twitter.com/ikatunya?ref=blog.lido.fi): conceptualization and methodological framework, supervision, project administration, review & editing. Yulia Fomina : final draft, review & editing. ### Lido And The Merge URL: https://blog.lido.fi/lido-and-the-merge/ Last updated: 2023-09-12T04:48:13.000Z ## Too Long, Didn’t Stake: If you’re already comfortable with your knowledge about the Merge (and what it does and does not do), here is a summary of how the Merge will affect Lido. **1\. **stETH will continue to exist post-merge** stETH will continue to exist and serve the same purpose it does now: act as an unlocked, liquid, and composable representation of the stake and staking rewards of tens of thousands of users. There will still be value in stETH as a deeply integrated DeFi Lego across the ecosystem allowing for customizable strategies. It will work the same way as it does now, and will also accrue additional rewards that will arise from the move from Proof of Work to Proof of Stake (more on that below). **2\. **The Merge will not allow users to unstake ETH** Withdrawals will only be possible in the hardfork following the Merge. Until then, users can swap their stETH for ETH or other tokens via secondary markets such as Decentralized Exchanges like Curve or Uniswap. **3\. **Lido is Merge-ready and will receive additional rewards for validators, which will have an upward effect on stETH APR** Lido completed an upgrade specifically designed for the Merge, and Lido node operators participate in merge testnets following the requirements and guidance for node configuration. As of now, Lido validators have reported that their nodes have been correctly configured. In PoS Ethereum, validators will take on the role of (Execution Layer) block proposers, and thus receive rewards via priority fees and potential Maximal Extractable Value (MEV) rewards. These rewards (less protocol fees) will be available directly on the Execution Layer and will be staked by Lido, which will increase the rewards that stETH users will receive. Lido has already implemented this mechanism on Ethereum mainnet, and additional rewards will start accruing immediately once priority fees start coming in post-Merge. **4\. **Lido is working with its community and Node Operators to determine what to do with MEV and rewards** Lido is engaged in an open and transparent process to come up with a policy to: 1. Determine how and when MEV may be extracted and rewards received 2. Share MEV rewards with stakers 3. Ensure that Node Operators are in compliance with the DAO-approved approach Like priority fees, MEV rewards will also increase the rewards that stETH users receive. ## What the Merge is (and what it isn't) ### What exactly is Merging? Ethereum is essentially composed of two layers: a consensus layer and an execution layer. For most of Ethereum's history, this hasn't been readily apparent to the average user. Even from a technical perspective, they have been so tightly coupled that they were considered to be operating as one. The original version of Ethereum is generally referred to as Proof of Work (PoW) Ethereum. The Consensus Layer is the networking mechanism through which nodes achieve agreement as to which chain is the canonical one, and the Execution Layer is the mechanism through which nodes execute EVM operations, propagate transactions, and manage state and historical data. Following the launch of the Ethereum Beacon Chain (Ethereum’s Proof of Stake Consensus Layer) in December 2020, what we consider as Ethereum has been composed of two independent blockchains: the canonical Proof of Work (PoW) Ethereum chain, and a Proof of Stake (PoS) network designed to eventually act as Ethereum’s sole Consensus Layer. With the Merge, PoW Ethereum will essentially “dock” into PoS Ethereum, and the PoW Consensus Layer mechanism will be shed in favor of the PoS one. It's important to note here that there is no "second Ethereum". "Ethereum 2.0" or "Eth2" were used in the past to refer to a series of improvements to the Ethereum protocol, one of which was the introduction of PoS. Although the Beacon Chain is technically an independent blockchain, it is not a new Ethereum, it's just a new consensus mechanism that will house the Execution Layer, which is where all the content of Ethereum rests. [![](https://blog.lido.fi/content/images/2022/08/The-Merge.jpg)](https://opensea.io/assets/ethereum/0x495f947276749ce646f68ac8c248420045cb7b5e/50994790081962997399515087212038398341947664619648971560762973606427116961796?ref=blog.lido.fi) The Merge will occur following the [Bellatrix and Paris hardforks](https://blog.ethereum.org/2022/08/12/finalized-no-36/?ref=blog.lido.fi) (for the Consensus and Execution layers respectively). For The Merge to occur, the Beacon Chain must first be upgraded to "host" the transactional payloads of the Execution Layer. This upgrade is called "Bellatrix". Once this happens, the current PoW network will be ready to move its consensus to Proof of Stake. This transition is triggered upon hitting a specific PoW Total Difficulty. Once this happens, the current PoW chain stops listening to PoW as its consensus mechanism and will instead follow the Beacon Chain. It is important to remember that the Merge isn't the end of Ethereum's evolution. The Merge is an integral piece - but just a piece -- of [Ethereum's overall evolutionary roadmap](https://www.youtube.com/watch?v=kGjFTzRTH3Q&ref=blog.lido.fi). ### What will happen as a result of the Merge? As explained above, the purpose of the Merge is to deprecate the PoW consensus mechanism in favor of PoS, and ensure that the original Execution Layer and the new Consensus Layer fit together so that Ethereum keeps moving. The most important effect of this transition is that mining will no longer have a place in Ethereum, as blocks in Proof of Stake are produced by validators, which are incentivized to perform well due to incentives (known as staking rewards) and disincentivized from under-performing or harming the network through penalties (for inactivity) and slashing (for malicious activity). Since the PoS Ethereum Beacon Chain has already been running since December of 2020, there are already validators who have been receiving staking rewards, and they will continue to do so following the Merge. Note that the rewards that stakers have been receiving for performing validator duties accrue within the Beacon Chain (the Consensus Layer) (this is important, and we'll explain why below). The Merge will also slightly affect the requirements for running a proper validator in Ethereum; users running validators will have to [ensure that they are running an Execution Layer node](https://blog.ethereum.org/2022/06/30/sepolia-merge-announcement/?ref=blog.lido.fi) (see FAQ) and will not be able to rely on third party node providers like Infura, Alchemy, or Pocket Network post-merge. Thus, if all goes well and the Merge is successful, it is expected that the number of validators and stakers in Ethereum will grow for two reasons: - The technical risk associated with the Merge is non-negligible, and thus some would-be stakers are hesitant to engage in validating as they are worried that they may not be able to retrieve their stake (necessary funds deposited to a validator so that it can be considered active). Upon successful Merge this risk is drastically reduced (but not zeroed out, more on that below); - Block proposers (i.e. validators proposing a specific block) will receive additional rewards that were previously going to miners: priority fees and MEV rewards. These rewards will increase the return on investment for those running validators. However, there is an important clarification that needs to be made: The Merge will not enable withdrawals from the Execution Layer of the rewards that have been accruing to stakers on the Beacon Chain, or of their initial stakes (and thus will not allow for them to be used in DeFi, re-staked, sold, or withdrawn from Ethereum via exchanges or off-ramps). That being said, the rewards that accrue to block proposers in the Execution Layer (priority fees and potential MEV rewards) will be immediately available to validators, since they are paid directly in the Execution Layer. Given that block space is scarce, users compete against each other to get their transactions included in blocks, and they do that by paying a total transaction fee, which is broken up into a base fee and a priority fee. Priority fees – often referred to and thought of as a “tip” – are basically the gas that is left over in a transaction after the [base fee](https://ethereum.org/en/developers/docs/gas/?ref=blog.lido.fi#base-fee) (the minimum cost to transact on the network at a given time) has been [burnt](https://ethereum.org/en/developers/docs/gas/?ref=blog.lido.fi#eip-1559), and this remainder is used to incentive miners (in PoW) and validators (in PoS) to process a user’s transaction(s). MEV rewards for validators can similarly be thought of as the portion of [MEV extracted](https://ethereum.org/en/developers/docs/mev/?ref=blog.lido.fi#mev-extraction) which searchers or block builders are willing to pay to miners or validators in order to incentivize them to include the relevant MEV opportunities. Withdrawal functionality will only be introduced to Ethereum later, in the first hardfork following the Merge, which is estimated to follow 6-9 months later. Among other important things, the hardfork will introduce “withdrawal operations”: a mechanism for stakers to fully exit their validators and withdraw their stake from the Beacon Chain back to the Execution Layer. ### When will the Merge happen? The Merge has already been tested on numerous special-purpose testnets (e.g. Kintsugi, Kiln, etc.), previous Ethereum testnets which will be deprecated in the future (Ropsten), as well as others that may remain into the future (Sepolia). Goerli underwent a successful merge, etc. [Merge for mainnet Ethereum](https://blog.ethereum.org/2022/08/12/finalized-no-36/?ref=blog.lido.fi) is targeted for September 15, 2022. Lido has been working diligently with its Node Operators, its users, Ethereum developers, and third parties such as [Flashbots](https://github.com/flashbots/?ref=blog.lido.fi) who are the driving force behind advances in MEV on Ethereum, to prepare for the Merge and what is to come. ### How does the Merge affect Lido? At this point, a reader unfamiliar with what Lido and other liquid staking solutions offer may recognize that there is room for a type of asset whereby users who are willing to take the financial risk of staking, but not the technical or operational risk and associated costs, and share staking rewards between operators who can provide this service and the protocol that enables this service to take place. In late 2020, this is exactly what Lido [set out to do](https://blog.lido.fi/introducing-lido/): Lido created stETH, one of the first liquid staking tokens on Ethereum. stETH is a way for users to deposit any amount of ETH (vs the minimum of 32 ETH needed to participate as a solo staker) to contribute towards securing the Ethereum PoS network, and share in the rewards that accrue to validators. Most importantly, stETH enables a mechanism for the staking rewards that have accrued – as well as the original principal – on the Beacon Chain to be made available (at a [slight discount](https://hackmd.io/@Izzy-/EthereumStakingCodex?ref=blog.lido.fi#Liquid-staking-token-markets-exchange-rates-and-arbitrage)) on the Execution Layer via a token that is deeply liquid, and which has the potential to be a key building block within DeFi. Users of Lido sometimes ask, "Once the Merge has occurred, what happens to stETH? Does it stop existing or having value?" The simple answer is: ***Νothing happens to stETH***. stETH will continue to exist and serve the same purpose it does now: act as representation of the stake and staking rewards of tens of thousands of users, unlocked, liquid, and composable. Additionally, as we discussed above, the move to PoS will increase rewards to validators in the form of Priority Fees and possible MEV rewards, which will accrue to stETH holders similarly to how staking rewards accrue today. Let's examine the potential changes one at a time. ### Withdrawals and Redeemability The Merge will not enable users to "unstake'' their ETH, since withdrawals will not yet be enabled. Once withdrawals are enabled in the next hardfork, one of the original stated benefits of stETH will diminish (i.e. staked Ether will go from non-redeemable due to technical reasons to redeemable). That said, stakers may experience (potentially large) delays when redeeming ETH from the Beacon Chain. The same way that validators entering the Beacon Chain are placed in a queue, validators exiting the chain (a necessary condition for the full value of a validator to be redeemed) are also queued. This exit queue is in place to help ensure that malicious participants could not quickly take over or exit substantial parts of the total validator set. In a hypothetical (and realistic) scenario where tens of thousands of validators are being exited at the same time, the queue can rise to weeks if not months in duration. Partial withdrawals (the ability to "skim" any ETH on a validator that is above the 32 ETH minimum required for a validator to be active) will certainly help abate the number of validators that need to be exited at any one point in time, but it's possible that some stakers -- especially early ones -- may want to fully exit their validators for a variety of reasons (e.g. to cycle the Ether, to change withdrawal credentials, etc.). Thus, in this respect, stETH (via its liquidity on secondary markets) will continue to serve as the quickest way to enter or exit a position in staked Ether, although it is possible that doing so may incur a [slight premium](https://twitter.com/hasufl/status/1524717773959700481?ref=blog.lido.fi). For those not in a rush, the ability to properly unstake stETH will allow users who are willing to wait for the withdrawal period to benefit from arbitraging the price of stETH between the primary and secondary markets, so being patient can literally pay off! ### Returns to stakers The Merge will also, at least in the short to medium term, increase the rewards that stETH stakers are receiving for their stake. This will happen due to three mechanisms: Priority Fees, MEV rewards, and eventually – once withdrawals are enabled – compounding of staking rewards. That being said, an important caveat is that [staking rewards to all stakers reduce as the number of validators on Ethereum grows](https://www.attestant.io/posts/exploring-execution-block-rewards/?ref=blog.lido.fi). As a result, the issuance-based rewards may decline for each validator as the addition of post-Merge priority fees and MEV rewards incentivize more validators to join the network. Stakers should expect total rewards to be volatile until a new equilibrium is found. Based on estimates, overall stETH APR will likely increase from current 3.9% to a range of 5 - 8.2%, depending on how much activity is happening on the network. | Projected near-term post-Merge stETH APR | | | | ---------------------------------------- | ----------------------- | -------------------------------------------------------------------- | | Network at 1/3 capacity | Network at 1/2 capacity | Network at capacity (\~21K spent in gas monthly and 0.185 MEV/block) | | 5.67% | 6.3% | 8.2% | ### Priority Fees As mentioned earlier, in PoS Ethereum validators will receive rewards in the form of priority fees. Priority Fees are the "tip" that is left over after the required gas for a transaction as per the [EIP-1559 mechanism](https://ethereum.org/en/developers/docs/gas/?ref=blog.lido.fi#eip-1559) has been burnt. Previously, these priority fees were going to miners, and post-Merge they will be going to validators. These priority fees can be quite large, and increase in value when the network is congested. Lido has already rolled out changes to its mainnet contract code, in which Priority Fees will be re-staked in the protocol with the same fee structure as normal staking (90% to stakers, 5% to the protocol, and 5% to Node Operators). [This will have an upward effect on the APR that stETH holders receive](https://www.attestant.io/posts/understanding-post-merge-rewards/?ref=blog.lido.fi). ### MEV Rewards Similar to priority fees, validators will also be able to extract additional value from blocks [due to MEV](https://ethereum.org/en/developers/docs/mev/?ref=blog.lido.fi). Lido is [working on a policy](https://research.lido.fi/t/ethereum-mev-extraction-and-rewards-discussion-policy-groundwork/2461?ref=blog.lido.fi) that will describe what process and infrastructure the protocol and its constituent Node Operators would be able to use to extract MEV and share rewards with stakers. Although the policy is not finalized, as there is still testing to be done to assess the required infrastructure and implementation decisions to be made, it is likely that Lido will source blocks from open and transparent builder markets, receive them in an encrypted manner, and publish them (potentially through infrastructure such as [MEV-boost](https://github.com/flashbots/mev-boost?ref=blog.lido.fi)). Rewards from this process will be similarly shared with stakers, and a consequent upward effect on APR for stETH holders is expected. ### Compounding of staking rewards Following the hardfork that will allow for withdrawal operations, Lido will also likely engage in the compounding of staking rewards. It will probably do this through a combination of cycling (i.e. exiting and then re-depositing the ETH from validators) and partial withdrawals (skimming ETH from validators with balances > 32 ETH), which will further increase rewards for stETH holders. ## Conclusion The Merge is the most important milestone for the Ethereum blockchain since its launch seven years ago. Lido is proud of its role in democratizing access to staking on the Beacon Chain and playing a part in bringing its economic security to the level it has reached today. Everyone in the community is looking forward to Merge as the ‘man on the moon’ moment that it will be for a liquid staking protocol like Lido. ### Unveiling Lido's Node Operator Portal URL: https://blog.lido.fi/unveiling-the-lide-node-operator-portal/ Last updated: 2023-01-30T14:55:58.000Z Today we are releasing the first version of [Lido Node Operator Portal](https://operatorportal.lido.fi/?ref=blog.lido.fi), the purpose of which is to consolidate all information and resources related to being a Lido Node Operator in one place. The core audience of the portal is made up of two groups (with potential overlap): operators who are interested in joining one of Lido's many networks, or operators that have already been onboarded onto one of them. Prospective operators will be able to more easily see how Lido's different operator sets work, which networks currently have open onboarding rounds, what the general (and specific, per protocol, if applicable) requirements for being a Lido Node Operator are, and apply for onboarding rounds. Existing operators (currently this part of the portal is protected), will be able to see details about Lido's internal processes, monitoring mechanisms, communication and governance expectations, and have access to additional resources related to the smooth operation of Lido's protocols. As the potential pool of node operators for Lido grows (through Lido's work on permissionless entry into its operator sets), the aim is to expand the portal to include resources on how smaller operators can get up and running. The node operator portal will also provide general information to the wider staking community. Anyone (node operators, stakers, or just curious Ethereans) can check the portal for resources on how Lido’s operators and validators are performing, which operators are active on which networks, and more information about operator setups such as geographic and infrastructure diversity. This information will be made available both through links to third party resources that Lido works closely with, but also via internally sourced info. This is just a first step, and there is lots more to come. The Portal will be iteratively improved indefinitely, and we look forward to your comments, suggestions, and even participation in terms of creating content, if you so desire. Please reach out to us via our [Discord](https://discord.com/invite/lido?ref=blog.lido.fi), [Forums](https://research.lido.fi/?ref=blog.lido.fi), or [email](mailto:nom@lido.fi\) if you have any ideas. We look forward to your feedback and suggestions. ### Additions to the Lido on Solana Node Operator Set - Wave 2 URL: https://blog.lido.fi/additions-to-the-lido-on-solana-node-operator-set-wave-2/ Last updated: 2023-09-12T05:35:44.000Z # ### **The DAO has approved 5 new Node Operators for the Lido on Solana operator set with mainnet onboarding underway.** As part of Lido’s continued effort to decentralize the Lido on Solana protocol, Lido conducted an open [onboarding application and evaluation round](https://research.lido.fi/t/announcement-lido-on-solana-wave-2-onboarding/2120/?ref=blog.lido.fi) beginning in May 2022 for the inclusion of additional Node Operators into the Lido on Solana operator set. Following the evaluation of 45 applications by the Lido Node Operator Subgovernance Group (LNOSG), a cohort consisting of 5 operators was shortlisted and sent to the DAO for approval, which was finalized and approved [via snapshot on July 12th 2022](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0x75e91a2a1331bb1232951eb832df173281529f370d9d2f54ffa1c8197b326449). Due to continued adverse market conditions, the depressed price of SOL, and slow pace of deposit inflows, the LNOSG proposed that onboarding a smaller than originally planned cohort was more appropriate at this time. More information about the application and evaluation process can be found on [Lido's forum](https://research.lido.fi/t/announcement-lido-on-solana-wave-2-onboarding/2120/3?ref=blog.lido.fi). These five operators have begun the mainnet onboarding process and will be active members of the Lido on Solana operator set in the coming days. ### **Bringing New Operators to the Solana Ecosytem** During the Wave 2 evaluations, the LNOSG determined that a small onboarding round should be performed for operators interested in joining the Solana ecosystem with the help of Lido. This intention demonstrates Lido’s focus around the core principles of the [Lido Operator Set Strategy](https://hackmd.io/K6udDz1nSZOoX8t-vE98qg?ref=blog.lido.fi), specifically working to increase the robustness, reliability, and decentralization of the underlying protocols on which Lido operates. As a result, a smaller onboarding round of operators with no mainnet nodes will be conducted over the coming weeks with the goal of expanding validator diversity (which the DAO can choose to ratify or not). Below you can find a description and statement for each of the operators joining our Solana Operator set (listed in alphabetical order). | | | | ---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | [![](https://blog.lido.fi/content/images/2022/07/D-01Node_1.jpeg)](https://01node.com/?ref=blog.lido.fi) | 01node is a high quality staking and validation service provider. We have the expertise and time tested infrastructure as a highly secure and reliable validator. Our track record shows this reliability, We place a high priority on security and guarantee the best practices for each service we provide. With our physical infrastructure consolidated in tier-3 datacenters, we strive to offer the highest performance and dependability.We are a team of highly skilled and dedicated professionals with decades of experience in the fields of software development, IT infrastructure, cryptography, and financial services. We are thrilled to be a part of the Lido node operator community and look forward to strengthening the Lido ecosystem. | | [![](https://blog.lido.fi/content/images/2022/07/Allnodes.svg)](https://www.allnodes.com/?ref=blog.lido.fi) | Allnodes is the leading Web 3.0 infrastructure and service provider. With its top-tier institutional infrastructure Allnodes supports over 50 cutting-edge blockchain networks that provide a user-friendly, secure, and scalable node management software and infrastructure that drives the blockchain economy. Because of our technical depth, we are able to ensure uptime and round-the-clock coverage for the most demanding blockchain-related use cases across the major and emerging protocols.We are firm believers in Solana's technology since it can reshape the business world by allowing consumers to transact directly with merchants, eliminating banks and other intermediaries. Furthermore, Lido provides yet another efficiency level for the network by bringing decentralization into a prominent position and facilitating participation in the broader web3 economy. We at Allnodes want to be a part of this movement and contribute to this cause. | | [![](https://blog.lido.fi/content/images/2022/07/Kiln_Logo-Transparent-Dark.png)](https://www.kiln.fi/?ref=blog.lido.fi) | Kiln is the leading enterprise-grade staking platform, enabling institutional customers to stake assets, and to whitelabel staking functionality into their offering. Our platform is API-first and enables fully automated validator, rewards, and commission management.The Kiln team is very excited to join the Solana Node Operator Set, contributing further to the Lido ecosystem and vision in addition to our participation in Ethereum staking since the first wave. | | [![](https://blog.lido.fi/content/images/2022/07/stakewith.us_colour_transparent.png)](https://www.stakewith.us/?ref=blog.lido.fi) | Stakewithus is a secure staking infrastructure provider for leading Proof-of-Stake protocols. The company has been in operation since early 2019 and is the only staking provider in the world to be backed by a government fund. The team comprises of engineers and specialist who are highly passionate about contributing to Web3\. We believe in a collaborative multichain future.Solana has emerged as one of the platform winners with increasingly strong developer mindshare and a focus on usability. We are excited to join the Lido Solana node operator set to support the ecosystem. | | [![](https://blog.lido.fi/content/images/2022/07/Stakin.png)](https://stakin.com/?ref=blog.lido.fi) | Stakin is a non-custodial infrastructure provider for Proof-of-Stake blockchains. Stakin serves institutional crypto players, foundations, custodians, exchanges as well as a large community of individual stakers. The company provides services on 30+ blockchain networks including Solana, Ethereum, Cosmos, Polygon, Polkadot, Near and more.We’re thrilled to join as a Lido operator for Solana, a blockchain we’ve been running infrastructure on since its early testnets in 2020\. To contribute to decentralization, the dedicated validator will be running on a bare-metal server in a low-concentration data center. We look forward to providing a reliable and secure infrastructure for Lido on Solana and growing the Solana liquid staking ecosystem. | ### **Future Onboardings** We anticipate further onboarding rounds in the near term (within Q3) on Ethereum (shortly following the merge), Polygon (shortly following our upgrade to v2), and Solana (likewise following [the upcoming upgrade](https://economy.p2p.org/lido-on-solana-validator-set-vision/?ref=blog.lido.fi)). Stay tuned to our forums and communication channels for more information! ### Lido's stETH Comes To L2 URL: https://blog.lido.fi/lidos-steth-comes-to-layer-2/ Last updated: 2023-09-12T04:47:28.000Z ### In the spirit of Ethereum scalability, Lido is bringing stETH to DeFi on Layer 2 ### Summary Ethereum is scaling, and Lido is following suit. We’re beyond pleased to unveil our expansion plans for Lido on L2, starting with the expansion of stETH across the growing L2 DeFi ecosystem. For Ethereum stakers, this means staking with lower fees and access to a new suite of DeFi applications to amplify rewards. Lido on L2 is not limited to a particular network or solution. Lido is committed to making Lido’s staked-asset tokens widely available throughout Ethereum Layer 2 as it evolves. To that end, Lido has already integrated with [Argent](https://argent.xyz/?ref=blog.lido.fi) to make wstETH available on zkSync users and with [Aztec](https://aztec.network/?ref=blog.lido.fi). Now at last we are able to announce that we are working on the next collection of integrations and partnerships that will be unveiled in the coming weeks. Stay tuned. Lido went live in December 2020, a few weeks after the Ethereum 2.0 Beacon Chain launched. Since then, our goal has been to simplify the Ethereum staking experience by mitigating a number of the challenges associated with the staking experience and democratizing staking for the average ETH holder. We believe that our expansion to L2 is the next step on this journey to further improve Ethereum staking accessibility. We look forward to further improving access to Ethereum staking. ### The Need For Layer 2 Layer 2 (L2) is an umbrella term to describe a specific set of Ethereum scaling solutions. Layer 2 networks serve as an extension to Ethereum to provide it with additional execution capacity. While Layer 2s are separate blockchains, they inherit the security guarantees of Ethereum by maintaining final settlement on Ethereum. Ethereum has reached the network's current capacity with [1+ million transactions per day](https://etherscan.io/chart/tx?ref=blog.lido.fi) and high demand for each of these transactions. The success of Ethereum and the demand to use it has caused gas prices to rise substantially. Therefore the [need for scaling solutions](https://ethereum.org/developers/docs/scaling/?ref=blog.lido.fi) has increased in demand as well. ### Lido On L2 There are several types of L2s. We believe that in the future a large portion (if not a majority) of economic activity and transaction volume will migrate to both general use and purpose-specific Layer 2 networks. Each of these networks will benefit from or need staking solutions to support their users’ economic activities and ensure that all users of Ethereum ecosystem networks have the ability to participate in securing Ethereum. We will begin by supporting wstETH bridging and staking on Layer 2 networks, with plans to to allow staking of ETH held by users on L2 networks directly from that L2 without the need to bridge their assets back to Ethereum Mainnet, all while taking advantage of reduced network and protocol fees afforded by the L2\. wstETH is the wrapped, non-rebasing version of Lido’s stETH. For our initial deployment to L2, we have made the decision to support only wstETH. This is due to a number of reasons, including simplified bridge contracts and ease of integration, both with bridges and general DeFi space. See our explainer on wstETH [here](https://help.lido.fi/en/articles/5231836-what-is-wrapped-steth-wsteth?ref=blog.lido.fi) for more information on that token asset. If you’re currently holding unwrapped stETH you can wrap your stETH in a few clicks here: [stake.lido.fi/wrap](https://stake.lido.fi/wrap?ref=blog.lido.fi). ### Moving Forwards As stated, Lido is network-agnostic, and plans to support stETH on all sufficiently proven Layer 2 networks with demonstrated economic activity, starting out with Arbitrum and Optimism. More information about deployment and timelines will be shared over the coming weeks. Tune in to the [Lido Twitter](https://www.twitter.com/lidofinance?ref=blog.lido.fi) every Tuesday for more 🏝️ ### Moving To Two-Phase Voting URL: https://blog.lido.fi/moving-to-two-phase-voting/ Last updated: 2025-03-26T21:07:30.000Z There are several risks for governance in the world of DeFi protocols. Protocol capture and the ongoing need for governance improvements remain significant challenges for DAOs like Lido. Among other measures to mitigate threats tracked on the [Lido on Ethereum Scorecard](https://scorecard.lido.fi/?ref=blog.lido.fi), the concept of a Timelock was mentioned as a significant safeguard: ***Currently, there is no timelock between DAO vote finalization and execution.*** Now that the DAO has voted to proceed with this, it’s time to do it! ## About The Lido DAO Voting Process Most decisions made by the Lido DAO go through an on-chain voting phase (you can read more about the Lido DAO governance process here: [https://lido.fi/governance](https://lido.fi/governance?ref=blog.lido.fi)). There are two requirements for a vote to pass: - Minimum approval (a.k.a "quorum"): more than 5% of the *total token supply* must vote 'yes'. - Support: more than 50% of the *tokens used to vote* must vote 'yes'. Consider the following hypothetical situation, which is of concern: - Before voting begins, an attacker has (or possibly buys) more than 5% of the total LDO supply. At the time of latest update (26.03.25) 1 LDO = **$1.07**, therefore 5% of the total supply = $53.5M. - An attacker submits a malicious proposal that clearly goes against Lido DAO's interests. No one votes for it (for obvious reasons), and everyone observing expects it to fail since minimal support has not been reached. - Just before the vote ends, there are minimal (possibly zero) "For" votes and some number of "Against" votes. - Just before the vote ends, the attacker deploys their LDO tokens, leaving the community no time to react. The voting period closes with both execution conditions now satisfied. - In the next block, the attacker enacts their sabotage vote, with the implicit consequences. A solution has been identified that is both elegant and striking in its simplicity. To the best of current knowledge, this approach is unprecedented and has not been implemented elsewhere. ## How Does It Work? On-chain voting in the Lido DAO lasts 5 days (120 hours). The essence of the solution is that these 120 hours are divided into two parts: 1. **The main phase**, lasting 72h, is conventional voting. Anyone with LDO can freely vote either 'for' or 'against'. 2. **The objection phase**, lasting 48h, is when LDO holders can *only* vote 'against' change their vote from 'for' to 'against'. This schema prevents the specific scenario of “last block vote hijack”. Even if the votes sent in the last block before the end of the **main phase** changes the result of the vote to 'for', Lido DAO members have the 48-hour **objection phase** to vote against. The on-chain voting duration was updated in March 2025 to improve voter participation and better align with current governance needs. ## About Balance Votes usually choose between a 'do something' and a 'do nothing'. In the classical implementation without the objection phase, those who support changes hold a more advantageous position. In the final block, with complete information available about the voting outcome, they can act in a way that ensures the vote aligns with their desired outcome. Meanwhile, those who do not support the proposal often don't vote at all when a proposal lacks backing and instead simply let the voting period run its course. Now, those who oppose the proposal also have access to open information and can vote against' rather than abstain 'against'. Some concerns remain when using a two-step solution, but neither is as dangerous as the 'last block vote hijack' scenario that affects the current governance process. These risks are: 1. The 'last-minute' vote problem in this scheme still remains since anyone with enough LDO can now object and defeat any governance motion at the very last moment. However, the risk of suddenly passing sabotage proposals poses a far greater threat to the Lido DAO than having routine governance motions blocked at the last minute. 2. A variation on the above could be where a malicious voter initially votes 'for', misleading other users about their intention, and then switch their vote to 'against' at the last moment to block the proposal. A two-phase voting schema allows us to have **timelock + veto-like** behavior for votes. This way, in case something bad happens, the community will have 48 hours during the timelock to react. ## Moving Forwards This is an important step for Lido DAO to harden its governance process and mitigate against protocol capture or damage. It is an important safety measure that is part of a broader effort that also includes a novel [“dual governance” proposal](https://research.lido.fi/t/ldo-steth-dual-governance/2382?ref=blog.lido.fi), currently live on the Research forum. The community is welcome to share views and feedback on this topic. ### Additions to Ethereum Node Operator Set - Wave 4 URL: https://blog.lido.fi/additions-to-ethereum-node-operator-set-wave-4/ Last updated: 2023-09-12T05:35:51.000Z ### **The Lido DAO has approved eight new Node Operators for Lido's Ethereum set with mainnet onboarding currently underway.** As part of the [roadmap to decentralization on Ethereum](https://blog.lido.fi/the-next-chapter-for-lido/), Lido conducted an open onboarding application and evaluation round in April and May of 2022 for the inclusion of additional Node Operators into its Ethereum operator set. Following the evaluation of 42 applications by the **Lido Node Operator Subgovernance Group (LNOSG)**, a cohort consisting of eight operators was shortlisted and sent to the DAO for approval, which was finalized and approved [via snapshot on June 5th 2022](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xf4beabac4561b2a927949868099c8843a2eed0df85b8ee0afd5c7b04611ca540). This brings the total number of independent NOs with Lido to 29\. Despite the original intention to onboard a larger cohort, recent market conditions and the slower pace of deposit inflows to Lido led the LNOSG to determine that proceeding conservatively was prudent at this time. More information about the application and evaluation process can be found on [Lido's research forum](https://research.lido.fi/t/announcement-onboarding-for-ethereum-wave-4/2024/4?ref=blog.lido.fi). The Node Operator Management team has begun optimistically coordinating with these eight operators to begin the process of participating on the Lido testnet. ### Onboarding Ethereum Client Teams This is the first time that Lido has onboarded Ethereum client teams (both consensus layer and execution layer) to its operator set. Lido has always been at the forefront of finding ways to support [Ethereum core protocol contributors](https://research.lido.fi/t/proposal-to-fund-the-protocol-guild-pilot-via-a-lido-grant/2016?ref=blog.lido.fi). Onboarding client teams as operators is something we have always wanted to do as a way for these teams to have a revenue stream that is directly related to the hard work that they do for creating the public goods that Ethereum runs on. We waited because we wanted to be sure that client teams were sufficiently progressed with all of their hard work preparing for the Merge, and also to ensure that they had sufficient experience running validators at scale following the Ethereum Foundation’s [client incentive program](https://blog.ethereum.org/2021/12/13/client-incentive-program/?ref=blog.lido.fi). We believe that the inclusion of client teams will not only serve to increase the effectiveness and diversity of our operator set, but also strengthen the DAO as the client teams lend their expertise and voices to matters of governance. ### Adding Smaller Operators Following through with our stated goal in our [Operator Set Strategy](https://research.lido.fi/t/lido-operator-set-strategy/2139?ref=blog.lido.fi) to empower smaller operators, we also focused on onboarding organizations which have only recently started to operate at scale, but have a long history of steadfast ecosystem participation and educational efforts, who will undoubtedly bring value to Lido both as operators and as educators and community builders. ### Wave 4 Cohort Members Below you can find a description and statement from each of the operators joining our Ethereum set (listed in alphabetical order). | | | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | [![Attestant-logo](https://blog.lido.fi/content/images/2022/06/Attestant-logo.svg)](https://www.attestant.io/?ref=blog.lido.fi) | | Attestant is a company dedicated to the business of staking. It provides a non-custodial Ethereum staking service, giving customers the ability to stake their Ether using Attestant’s institutional-grade infrastructure, which provides the highest level of resilience. This is achieved by an infrastructure containing bare metal servers running in multiple geographical regions with the use of different consensus clients.We believe Ethereum is the future of decentralized finance, and for it to succeed as a serious competitor to fiat-based economies it will need secure and reliable partners that provide a range of services to support the ecosystem. To that end we are very excited to join the Lido Ethereum node operator set. | | | | | | [![ChainSafe_Logo_text_bottom_CMYK](https://blog.lido.fi/content/images/2022/06/ChainSafe_Logo_text_bottom_CMYK.svg)](https://chainsafe.io/?ref=blog.lido.fi) | | ChainSafe is a leading blockchain R&D firm specializing in infrastructure solutions for the decentralized web. Alongside client implementations for Ethereum, Polkadot, Mina, and Filecoin, we’re building a portfolio of web3 products—Files, Storage, the Gaming SDK, and ChainBridge. As part of our mission to build better tooling for developers, ChainSafe embodies an open source and community-oriented ethos.The Lodestar team is excited to join Lido's Node Operator Wave 4 cohort. Lido is a significant player in the Ethereum ecosystem, and we look forward to working together on common goals, such as supporting client diversity and further decentralizing and securing the existing node operator pool. | | | | | | | | | | [![cryptomanufaktur_color_transparent_background](https://blog.lido.fi/content/images/2022/06/cryptomanufaktur_color_transparent_background.svg)](https://cryptomanufaktur.io/?ref=blog.lido.fi) | | CryptoManufaktur is a node operator for Chainlink as well as a node operator for liquid staking providers such as Lido, Stakewise and RocketPool. We are active in the Ethereum community and care deeply about decentralization. | | | | | | [![KG_transparent](https://blog.lido.fi/content/images/2022/06/KG_transparent.svg)](https://www.kukis-global.com/?ref=blog.lido.fi) | | Kukis Global is a Web3.0 infrastructure and service provider. We’ve offered secure and reliable non-custodial validator services since 2018 and provide accurate data for Chainlink and The Graph. We are using a dedicated geographically distributed infrastructure to ensure we can offer the best services.We are very excited to join the Lido node operator set, and we are looking forward to contributing more to the Lido ecosystem. | | | | | | | | | | [![Nethermind_logo_CMYK](https://blog.lido.fi/content/images/2022/06/Nethermind_logo_CMYK.svg)](https://nethermind.io/?ref=blog.lido.fi) | | Nethermind is a team of world-class builders and researchers. Our work touches many parts of the industry - from our Nethermind node to fundamental cryptography research and application-layer protocol development. We have years of experience building reliable infrastructure, with the likes of Gnosis Chain JSON RPC running solely on Nethermind nodes.At Nethermind, we believe the ecosystem's health comes above all else, and we know that Lido shares in this belief. We are incredibly excited to partner with Lido to contribute to the security and robustness of the ecosystem. | | | | | | [![Prysm](https://blog.lido.fi/content/images/2022/06/Prysm.svg)](https://prysmaticlabs.com/?ref=blog.lido.fi) | | Prysmatic Labs is an Ethereum core development team that maintains the popular Prysm implementation for Ethereum proof-of-stake. Our team has been at the forefront of staking R&D and has instrumented some of the first public testnets for running Ethereum validators. Today, we are domain experts in running our software at scale and continuously improving the quality of our product for individuals and institutions alike.Our team is thrilled to join as a Lido operator because we believe core developers working on the staking protocol itself should have a seat at the table when it comes to also running validators at scale. We believe incentives should align between developers and the success of Ethereum staking as a whole. We will bring professionalism and deep knowledge of the protocol to the Lido community. | | | | | | [![R-Logo](https://blog.lido.fi/content/images/2022/06/R-Logo.png)](https://rocklogic.at/?ref=blog.lido.fi) | | RockLogic GmbH is based in Austria with a focus on the Ethereum ecosystem since 2019 which led to the open source Ethereum node setup Stereum. RockLogic commits to the development of software in the Ethereum space and uses decade long experience running server infrastructure for customers of various industries to benefit not only Lido, but also the Ethereum ecosystem. | | | | | | [![sprime](https://blog.lido.fi/content/images/2022/06/sprime.png)](https://sigmaprime.io/?ref=blog.lido.fi) | | Sigma Prime provides top-tier security services to the Ethereum space and maintains Lighthouse, an Ethereum staking client that has been in production since genesis. Through Lighthouse we have gained a world-class understanding of the Ethereum specification, how it is implemented and how to maintain large fleets of validators.We are excited to join Lido to help ensure a diverse and knowledgeable set of node operators that is committed to Ethereum's values of decentralization and egalitarianism. We are thankful for the opportunity to fund open-source development through Lido and look forward to learning how we can improve Lighthouse through our activities here. | ### Next Steps Once the [Aragon vote](https://vote.lido.fi/vote/132?ref=blog.lido.fi)(s) for the registration of our new operators has passed, the operators will be a part of the mainnet set. ### Lido Subgraph Deployed on The Graph URL: https://blog.lido.fi/lido-subgraph-deployed-on-the-graph/ Last updated: 2026-03-06T12:44:19.000Z We are happy to announce that our Subgraph is now deployed, indexed and ready to serve requests on the decentralized [The Graph](https://thegraph.com/explorer/subgraph?id=HXfMc1jPHfFQoccWd7VMv66km75FoxVHDMvsJj5vG5vf&ref=blog.lido.fi) network. ### Subgraph [Subgraph](https://thegraph.com/docs/en/developer/define-subgraph-hosted/?ref=blog.lido.fi) is a project which contains instructions how to index contract events. In simple terms, it tells an indexer which events to process, what data should be stored and how to store it. It’s deployed to an indexer node, to which you make GraphQL queries like this to get the data: ``` { lidoTransfers(first: 100, where: { to: "0x123" }) { to value block } } ``` As data served is pre-indexed, Subgraphs have major advantages compared to fetching events from an ETH node: - Faster responses. - Improved data formatting. - You only query parts of data you actually need. - No need to deal with ABIs and contract addresses. - No required dependencies, but a GraphQL-ready http fetching library is recommended for convenience. Our Subgraph is open source on [GitHub](https://github.com/lidofinance/lido-subgraph?ref=blog.lido.fi) and has many [example code snippets](https://github.com/lidofinance/lido-subgraph/tree/master/snippets-nodejs?ref=blog.lido.fi), mostly in Node.js. It has some advanced indexing logic, which allows us to keep track of values like ***totalPooledEther*** and ***totalShares*** with precision of event index inside a transaction. This allows us to keep track of data missing from contract events (eg share amounts of transfers) and to calculate things like daily staking rewards with perfect Wei accuracy. Currently, we index the following contracts: - Lido - Oracle - Node Operators Registry - Voting - EasyTrack - Deposit Security Module ![](https://i.imgur.com/IHd8fCg.png) ### The Graph Decentralized Network Initially, our Subgraph was being hosted on The Graph [Hosted Service](https://thegraph.com/hosted-service/?ref=blog.lido.fi). However, decentralized network is a clear major upgrade in terms of stability and request processing quality, so for us it was only a matter of time until we migrate: - Query fees are paid for requests, which allows sustainable economics. - Anyone can stake GRT to become an indexer. - There are many indexers indexing our Subgraph (13 currently), which are automatically selected for serving requests. - Indexers are rewarded, so they are motivated to maintain indexing quality and keep indexing in the long term. - There is no limit in the amount of ***skip*** variable in requests, so all available entities can be fetched. ### How to Migrate Queries Hosted Service version will still work for the time being, but we strongly advise you to migrate to the new version at your own pace. You’ll need to get an API key and start paying for queries with GRT, but it’s quite straightforward: 1. Get GRT tokens. 2. Migrate GRT to Polygon (where billing is done) using the [Subgraph Studio](https://thegraph.com/studio/?ref=blog.lido.fi). 3. Get an API token on the [API keys page](https://thegraph.com/studio/apikeys/?ref=blog.lido.fi). Then, change the endpoint you are making requests t0 to the following: ``` https://gateway.thegraph.com/api/KEY_HERE/subgraphs/id/HXfMc1jPHfFQoccWd7VMv66km75FoxVHDMvsJj5vG5vf ``` That’s it! Periodically, make sure your GRT balance is sufficient. Fees are deducted weekly. ### Usage Examples - [Reward History](https://stake.lido.fi/rewards?ref=blog.lido.fi): Daily staking rewards are calculated and displayed with transaction history. - [Staking Widget](https://stake.lido.fi/?ref=blog.lido.fi): Our ETH staking widget displays statistics like the amount of stETH holders from our Subgraph. - [EasyTracks](https://easytrack.lido.fi/?ref=blog.lido.fi): Archive motions are loaded from the Subgraph. - [TokenTerminal](https://tokenterminal.com/terminal/projects/lido-finance?ref=blog.lido.fi): Daily statistics are loaded from our Subgraph to display protocol revenue and important metrics. ### Lido stAssets Collateral Risk Monitoring URL: https://blog.lido.fi/lido-stassets-collateral-risk-monitoring/ Last updated: 2026-08-22T11:34:07.000Z Lido, being the leading liquid staking protocol and the second largest [DeFi protocol by TVL](https://defillama.com/?ref=blog.lido.fi), has been integrated across a number of DeFi protocols. [Lido integrations](https://lido.fi/?ref=blog.lido.fi) aim to let its depositors use their **Lido staked assets (stAssets)** to earn rewards and also use them in DeFi. In other words, you may use your stAssets (tokens which already earn daily staking rewards) as collateral for lending, leveraged staking, rewards farming, hedged farming and more. We all know that there is no reward without risk; at the same time Lido works to maintain healthy integrations. This article provides you with a short overview of how the risks of stAssets-collateral are managed by Lido: from risk classification to risk monitoring, liquidity sufficiency analysis and alerting. Lido team does a lot to ensure the health of collateral and to keep risks under control: - Lido monitors the collateral risks for a number of pools. The risk of collateral may change over time, so it is monitored automatically on DeepNote and Dune (links are provided in the chart below). The information is updated every hour on DeepNote and by request even more often on Dune. - For pools with multi-collaterals and multi-loans we divide stAssets into bins to analyse the risks separately for different types of collateral and loan. - In the event of a liquidation, collateral will be sold to cover the debt. To ensure that there is always enough liquidity on the market we perform liquidity sufficiency analysis using aggregated indicators. - If the number of collaterals in the risky zone grows significantly, we alert our users via LidoFinance Twitter, and the Lido team - by means of Collaterals Alerts Bots. All these steps are open and transparent to help our actual and potential partners to make informed and balanced decisions. Let’s start from the quick note of where you may deposit your stAssets and use them as collateral, and then proceed to the risk management algorithm. ## Lido Integrations to use stAssets as collateral For now the Lido ecosystem allows its users to put their stAssets (stETH, wstETH, steCRV, bETH, bLuna, stSOL) as collateral in the following protocols integrated with Lido: **AAVE** and **Maker DAO** \- on Ethereum; **Anchor** \- on Terra; **Solend**, **Larix**, **Port Finance**, **Francium** \- on Solana. The list below summarises tracked Lido integrations to use stAssets as collateral. ### List of Lido Integrations: ### Ethereum - **Protocol:** [**AAVE**](https://app.aave.com/reserve-overview/?underlyingAsset=0xae7ab96520de3a18e5e111b5eaab095312d7fe84&marketName=proto%5Fmainnet&ref=blog.lido.fi) **Collateral token**: stETH / multi-collateral **Loan token**: ETH / the other tokens / multi-loans **TVL (collateral value), May 2022**: > $2.9B **Liquidation**: LTV = 73%, the liquidation threshold = 75% **Dashboard**: [AAVE stETH on Dune](https://dune.com/LidoAnalytical/Integration-Lido-Aave?ref=blog.lido.fi), [AAVE stETH on DeepNote](https://deepnote.com/@Lido-analytical-team/Aave-risk-monitoring-a71a6ecd-7808-4324-8ab9-9312230c4eb8?ref=blog.lido.fi) - **Protocol:** [**Maker DAO**](https://vote.makerdao.com/executive/template-executive-vote-parameter-changes-wsteth-a-onboarding-october-22-2021?network=mainnet&ref=blog.lido.fi) **Collateral token**: wstETH **Loan token**: DAI **TVL (collateral value), May 2022**: > $410M **Liquidation**: Liquidation ratio = 160% **Dashboard**: [Maker wstETH on Dune](https://dune.com/LidoAnalytical/Lido-MakerDAO-Integration?ref=blog.lido.fi), [Maker wstETH on DeepNote](https://deepnote.com/@Lido-analytical-team/Collaterals-risk-monitor-07af4ca5-ad04-49b8-b747-d05ec9f4ad31?ref=blog.lido.fi) - **Protocol:** [**Maker DAO**](https://vote.makerdao.com/executive/template-executive-vote-curve-steth-eth-onboarding-rate-limited-flapper-immunefi-bug-bounty-payouts-march-11-2022?network=mainnet&ref=blog.lido.fi#proposal-detail) **Collateral token**: steCRV **Loan token**: DAI **TVL (collateral value), May 2022**: > $3.6M **Liquidation**: Liquidation ratio = 155% **Dashboard**: [Maker steCRV on Dune](https://dune.com/LidoAnalytical/Integration-Lido-MakerDAO-%28steCRV%29?ref=blog.lido.fi), [Maker steCRV on DeepNote](https://deepnote.com/@Lido-analytical-team/Collaterals-risk-monitor-07af4ca5-ad04-49b8-b747-d05ec9f4ad31?ref=blog.lido.fi) ### Terra - **Protocol:** [**Anchor**](https://app.anchorprotocol.com/?ref=blog.lido.fi) **Collateral token**: bETH / multi-collateral **Loan token**: UST **TVL (collateral value), May 2022**: > $1.34B **Liquidation**: LTV = 75% **Dashboard**: [Anchor bETH on DeepNote](https://deepnote.com/@Lido-analytical-team/Anchor-collaterals-risk-structure-analysis-ac98497c-3c24-4f47-ad5c-d5283dc4157b?ref=blog.lido.fi) - **Protocol:** [**Anchor**](https://docs.anchorprotocol.com/protocol/bonded-assets-bassets/bonded-luna-bluna?ref=blog.lido.fi) **Collateral token**: bLuna / multi-collateral **Loan token**: UST **TVL (collateral value), May 2022**: > $881M **Liquidation**: LTV = 80% **Dashboard**: [Anchor bLuna on DeepNote](https://deepnote.com/@Lido-analytical-team/Anchor-collaterals-risk-structure-analysis-ac98497c-3c24-4f47-ad5c-d5283dc4157b?ref=blog.lido.fi) **FYI:** - **LTV (loan-to-value)** is a ratio of the liability to the collateral value that limits the loan a user can get within given collateral. For example, AAVE stETH Vault max LTV equals 73%, it means that the user may get a loan within 73% of collateral value. In practice AAVE stETH Vault also exploits **the liquidation threshold** of 75%, i.e. liquidation starts when the liability equals 75% of the collateral. - Some platforms use the indicator inverted to LTV - **Liquidation ratio**. Liquidation ratio is a ratio of collateral value to liability (collateral-to-loan) when the loan position gets into the liquidation queue. For example, Maker DAO set up a 160% liquidation ratio for wstETH collateral, and 155% - for steCRV collateral. ## Risk Rating Risk management requires a classification of risks. To classify collateral stAssets according to their risk level we exploit a risk ratio model. **FYI:** - **The risk ratio** characterises a position's riskiness (nominated in %). - RiskRatio = Loan / (Collateral value \* maxLTV). - The loan position with a risk ratio of 100% and more gets in the liquidation. In general, loan positions with a risk ratio of 80% and below may be considered as safe from under-collateralization. - If we invert the formula of risk ratio we will receive the **collateral-to-loan ratio:** *Collateral value / Loan = 1 / (RiskRatio \* maxLTV) = k\*x* where *k* is a varying coefficient (1/RiskRatio) and *x* is a constant that equals 1 / maxLTV. We use two types of **risk rating scale: standard and reduced.** **Standard risk rating scale** is applied if the collateral and loan are nominated in the different tokens. For now it is applied to the Anchor pool (bLuna collateral and UST loan, bETH collateral and UST loan), AAVE pool (in case of stETH collateral and non-ETH loan), Maker DAO (wstETH collateral and DAI loan, steCRV collateral and DAI loan). We departed from the collateral-to-loan ratio of 2.50x, 1.75x, 1.50x, 1.25x, 1.10x, 1.00x (where x = 1/maxLTV) and divided the loans into 7 groups. 1.00x (or less) collateral-to-loan ratio means risk ≥100% and leads to liquidation of collateral to redeem the debt. The distances between the coefficients were chosen in such a way that each lower risk is harder to hit. We consider groups ‘A’ and ‘B+’ as ‘safe zone', ‘B’ and ‘B-’ as ‘middle-risk zone’, while groups 'C', 'D', and 'liquidation' (C+D+liquidation) as 'dangerous zone'. Below you may see our standard risk rating scale. **For example**, it is used for [Bin2 AAVE Vault](https://deepnote.com/@Lido-analytical-team/Aave-risk-monitoring-a71a6ecd-7808-4324-8ab9-9312230c4eb8?ref=blog.lido.fi). **FYI:** AAVE Vault allows its users to supply stETH as collateral (while still retaining Ethereum staking rewards) and take a loan. Multi-collaterals and multi-loans are also taking place. To monitor the collateral risks we divided AAVE Vault into three Bins: - **Bin1**: AAVE users with ≥80% collaterals in stETH and ≥80% debt in ETH. - **Bin2**: AAVE users with stETH collateral and ≥80% debt in not-ETH. - **Bin3**: All the others AAVE users with stETH collateral. Our standard risk scale is applicable for Bin2 and Bin3 where collateral and loan are nominated in the different tokens, but not for Bin1\. ### Lido standard risk rating scale used for AAVE Vault Bin2 (stETH/non-ETH) ![](https://blog.lido.fi/content/images/2022/05/Screenshot-2022-05-10-at-12.12.20.png) **Reduced risk rating scale** is used when collateral and loan tokens are related to each other (e.g. ETH and stETH), the standard risk rating scale is not applicable because of the reduced price volatility in a pair of tokens. **For example**, the reduced risk rating scale was developed for [Bin1 of AAVE Vault](https://deepnote.com/@Lido-analytical-team/Aave-risk-monitoring-a71a6ecd-7808-4324-8ab9-9312230c4eb8?ref=blog.lido.fi) where stETH is the main token of collateral, and ETH - token of loan. stETH is related to ETH that significantly reduces the risk of the price change. On the basis of the historical data on daily stETH-ETH price drops and daily stETH-ETH price volatility and taking into account a structure of the bin we developed the risk scale for Bin1\. ### Reduced risk rating scale for AAVE Vault Bin1 (stETH/ETH) ![](https://blog.lido.fi/content/images/2022/05/Screenshot-2022-05-10-at-12.12.28.png) While LTV is a metric set by the protocol, the collateral and liability values are the actual numbers that change over the time due to changes in the positions and the assets’ prices. These changes consequently lead to the update of the actual collateral to liability ratio, and may change the risk rating of collateral. That’s why collateral monitoring is needed in real time. ## Risk Monitoring For now Lido has automated stAssets-collateral risk monitoring on AAVE, Anchor and Maker DAO based on the hourly updated positions and token prices. Lido users may have free access to the monitoring placed on deepnote.com and dune.xyz that allows them to check the health of the lending pool. [Integration Monitor Dashboard](https://dune.com/LidoAnalytical/Integration-monitor-dashboard?ref=blog.lido.fi) **on Dune** provides you with actual and historical data on stAssets amount locked in the pools, $TVL and charts of stAssets dynamics. Aggregated [collateral risk monitor](https://deepnote.com/@Lido-analytical-team/Collaterals-risk-monitor-B69Mpa0ESbi3R9BeyfStMQ?ref=blog.lido.fi) **on DeepNote** presents the aggregated metrics (like aggregated total collateral value, aggregated risky collateral value, pool liquidity) for the pools using ETH as collateral (AAVE, Maker DAO, Anchor) and also provides risk monitoring for each pool (current risk rating and dynamics of total collateral and risky collateral). More detailed information may be found on Dune for [Maker DAO WSTETH-A](https://dune.xyz/LidoAnalytical/Lido-MakerDAO-Integration?ref=blog.lido.fi), [Maker DAO steCRV](https://dune.com/LidoAnalytical/Integration-Lido-MakerDAO-%28steCRV%29?ref=blog.lido.fi) dashboards including $TVL, liquidation ratio, total amount of collateral and total debt, collateral and debt dynamics, collateral risk structure, liquidation tracker etc. [AAVE stETH Vault](https://dune.xyz/LidoAnalytical/Integration-Lido-Aave?ref=blog.lido.fi) on Dune presents $TVL, LTV, Liquidation threshold, total amount of collateral, collateral dynamics, liquidation tracker. Detailed analysis for [Anchor bETH](https://deepnote.com/@Lido-analytical-team/Anchor-collaterals-risk-structure-analysis-rJhJfDwkT0etXNUoPcQVew?ref=blog.lido.fi) (for bETH and bLuna), [AAVE stETH](https://deepnote.com/@Lido-analytical-team/Aave-risk-monitoring-pxpuzXgIQySKuZMSIwxOuA?ref=blog.lido.fi) (for all three bins) pools on DeepNote includes risk rating, collateral dynamics of total collateral and risky collateral, liquidation tracker. Let’s consider **the typical risk monitoring of stAsset-collateral** that you may find on DeepNote using the example of Bin2 [AAVE stETH Vault](https://deepnote.com/@Lido-analytical-team/Aave-risk-monitoring-a71a6ecd-7808-4324-8ab9-9312230c4eb8?ref=blog.lido.fi) (AAVE users with stETH collateral and ≥80% debt in not-ETH, standard risk rating scale). **1\. Current collateral risk structure.** The calculation of the risk rating is based on the current prices of collateral and loan tokens, and collateral to loan ratio. In the table you may see the distribution of collateral on the risk rating scale. Each table also shows total amount of stAssets-collateral locked in a pool, $TVL, number of collateral deposits, percentage of collateral in the safe and dangerous zones. In the example below you may see that 2% of stETH-collateral amount is in danger. ![](https://lh6.googleusercontent.com/Gp8KFco33SZuxGn9D2qomRuzWeRS3d1fya9oGrtrMXlQnMmHSDgzG8kukNRX8Xh2mKFT_YmCBJkslEOAiEYUx2oheWjtcyXnerOC742VJVqqiOyNBnC5r8A6ufXJDCaX0H5Atp_WtgkzzdjyIg) **2\. Collateral dynamics.** If the table above reflects the current state of collateral, the chart shows its dynamics including total collateral amount and risky collateral amount (C+D+liquidation). For example, in a [chart below](https://deepnote.com/@Lido-analytical-team/Collaterals-risk-monitor-07af4ca5-ad04-49b8-b747-d05ec9f4ad31?ref=blog.lido.fi) you may see that the total amount of stETH collateral grew significantly during the last month. The amount of the risky collateral also grew, but not faster than total collateral that tells us about the good health of collateral. ![](https://lh3.googleusercontent.com/ofMMSGjxruBWxn-ppMIo3EEcBMTPScGv20-968DOEB3aJ2dcu39otLBCEmeP7BR9sVpvdsBrKjgfbkWYbNyFgebmxVd6Z7n2jMNUNXd9sw0SnlZDlUeMFxndzEi2sGcgO7XfxqtCAyNy9j7z6A) **3\. Liquidity sufficiency analysis.** If a significant amount of collateral falls in the risky zone, we need to be assured that there is enough liquidity on the market to cover liquidations. For the aim of liquidity sufficiency analysis we use two metrics: - Ratio of total collateral to pool liquidity, %; - Ratio of risky collateral (C+D+liquidation) to pool liquidity, %. Pool liquidity is an aggregated indicator of liquidity available on the market. **FYI:** - To calculate pool liquidity for ETH-related collaterals we sum up the value of native tokens and stablecoins deposited in the [Curve ETH/stETH](https://curve.fi/steth?ref=blog.lido.fi), [Sushi DAI/wstETH](https://app.sushi.com/add/0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0/0x6B175474E89094C44Da98b954EedeAC495271d0F?ref=blog.lido.fi), [Balancer WETH/wstETH](https://app.balancer.fi/?ref=blog.lido.fi#/) and [TerraSwap UST/bETH](https://app.terraswap.io/?ref=blog.lido.fi) liquidity pools (pools where native tokens or stablecoins are paired with stAssets tokens). - For bLuna collaterals, pool liquidity is calculated as a value of Luna locked in [TerraSwap Luna/bLuna](https://app.terraswap.io/?ref=blog.lido.fi) and [Astroport bLuna/Luna](https://app.astroport.fi/pools?ref=blog.lido.fi) liquidity pools. The results of liquidity sufficiency analysis are presented in charts. Orange line shows a ratio of total collateral to pool liquidity, and dark violet line - a ratio of risky collateral to pool liquidity. For example, in [the stETH Anchor chart](https://deepnote.com/@Lido-analytical-team/Aave-risk-monitoring-a71a6ecd-7808-4324-8ab9-9312230c4eb8?ref=blog.lido.fi) below we may see that the ratio of risky collateral to pool liquidity (dark violet line) fluctuated between 2% and 9% during the last month. ![](https://lh3.googleusercontent.com/3MCMj_ycUCyC_DpVZRDIgjrzB659q6bX4EC5Y_gPgGw9WeZ7zONeCnxpHCW4W2V8JVbocT4RklVmxddx4tVtsK3am7xhA7S2jeQBZsvIaOUrMkjYhoCb9QpNLYwwQx6O4f2Vss3XRwXoQNSSYw) **4\. The liquidations tracker.** To check the number of liquidations and liquidated stAsset collateral amount you may use the liquidation tracker (we have it for [AAVE on Dune](https://dune.com/LidoAnalytical/Integration-Lido-Aave?ref=blog.lido.fi)). ![](https://lh6.googleusercontent.com/rD9RUd3HErkoSZxrfgr1Q7ctxjd8S9yitXQ0zn88FIFirG8fA5Ou4VwV29N8KhBqFUC8hZYG636t04te_4h1lT-Sk-BUgsknUm6h5c-WxZmuuE8jHmRSov_WHr7mA5pOJmMUecAk3tT_g2uTFw) ## Aggregated liquidity sufficiency analysis For aggregated liquidity sufficiency analysis we sum up the total collateral value and risky collateral value locked in the pools and calculate the ratio of total collateral to pool liquidity and ratio of risky collateral to pool liquidity. [The chart below](https://deepnote.com/@Lido-analytical-team/Collaterals-risk-monitor-07af4ca5-ad04-49b8-b747-d05ec9f4ad31?ref=blog.lido.fi) presents the aggregated liquidity sufficiency analysis for ETH-related collateral locked in AAVE, Anchor, and Maker pools. The ratio of risky collateral to pool liquidity exceeded 60% recently that requires more attention to manage the risks. ![](https://lh5.googleusercontent.com/Po92Y4mp1q10pWlYauS6YovQ6BId9GbVGj5ssYhfwG5x_UG7g56_DOWcX4u_FF7i7hHUBa7wKAZqR7mfTxbJB5i8u8lfDaMJ_6rDavjRuqQAbNjnkLB4uVLt8kY2Ot4T0wzGHq9Sr9gru0qESA) ## Alerting The monitoring provides data for alerting the Lido team and Lido users that allows them to de-risk in time. Lido already exploits several tools for alerting: - Collaterals Alerts Bot on AAVE and Anchor automatically warn Lido team about risky collateral, when the number of collateral stAssets in the dangerous zone grows. ![](https://lh5.googleusercontent.com/ohbrDNkOXc7h63NX1p6bP5d7wQKNp5GuRAHNcs-JLK9_dCq4_KapGgj0ZaK3ANBEhkPc_BQrWi8p1vuliQ6edVSQD3alhuNsoX1AbycKnrk3Dcsaps0OE0HSxuNW1SPmm5YV90cBWbhSc8JZ1Q) - Lido provides users with information about significant changes in collateral risk via [Twitter account](https://twitter.com/LidoFinance/status/1512425247479406596?ref=blog.lido.fi). ![](https://lh3.googleusercontent.com/DGs-ecbih45XpTRehsbJWrSiXZb21X5YAEapJ8mc94O3EcBlfmyp6oKHnJRrOUfGn9xwWEScfBH63F9XPYO386Ke41v7-cLjz7MVYL4VacrDwp_a2BliOl5UFWd-Z-7prr1KugIocuGYMGiCMg) We also plan to expand monitoring and alerting by: - Adding Collaterals Alerts Bot on Maker; - Implementing automated monitoring on Solana; ## Conclusion To wrap it up, stAssets-collateral risk management is vital for the healthy integration of Lido with the other protocols. On the one hand the integration provides more opportunities for stAssets holders - you may deposit stAssets and get more rewards beyond staking rewards, or use your collateral for lending to get more liquidity for leveraged staking, etc. On the other hand - using stAssets as collateral brings a risk of a loan position liquidation that leads to a liquidation penalty and destroys your strategy, but moreover rocks the boat of the pool. To navigate the risks Lido team provides stAssets-collateral risk monitoring. Automatic monitoring, liquidity sufficiency analysis and alerting are the main components of the stAssets-collateral risk management. We monitor collateral risks from different perspectives (using indicators for a pool, dividing a pool on the bins by different tokens, and even implementing aggregated indicators to analyse the liquidity sufficiency for a bunch of integrations) to see the whole picture. To conclude, Lido moves heaven and earth to surface and show the collateral risks and allow you to make informed decisions. Stake with Lido, be prudent when you lever up on Lido integrations and stay safe! ### Authors' contributions: - **Irina Katunina** / [**@ikatunya**](https://twitter.com/ikatunya?ref=blog.lido.fi): original idea, conceptualization and methodological framework, supervision, project administration, review & editing. - [**@ppclunghe**](https://twitter.com/ppclunghe?ref=blog.lido.fi)**:** code writing, data analysis, visualisation, validation, review & editing. - **Grigorii Shestakov**: data fetching, data analysis, visualisation, validation. - **Yulia Fomina**: original draft writing and editing. ### Lido Decentralisation Scorecard & Operator Set Strategy URL: https://blog.lido.fi/lido-on-ethereum-scorecard-and-operator-set-strategy/ Last updated: 2023-09-12T04:45:47.000Z In our recent post, [The Next Chapter for Lido](https://blog.lido.fi/the-next-chapter-for-lido/), and in a presentation at Devconnect, we outlined the actions we would take on our journey towards decentralizing Lido. Today we are releasing the first version of our [Lido on Ethereum Scorecard](https://scorecard.lido.fi/?ref=blog.lido.fi). In this scorecard, we outline a set of attributes that we think are important for the decentralization of the protocol, and how Lido is faring against these targets. This scorecard is also linked to on our [Ethereum landing page](https://www.lido.fi/ethereum?ref=blog.lido.fi). As our scorecard matures, we will be providing more detail and information on how we are making progress towards these objectives. We encourage the community to participate not only in refining these attributes, but also helping us make the assessment process open and transparent. In addition, we are also releasing for public comment the first draft of our [Operator Set Strategy](https://research.lido.fi/t/lido-operator-set-strategy/2139?ref=blog.lido.fi). As explained in our previous blog post and in [our presentation](https://www.youtube.com/watch?v=GJwS7VF40wk&t=8984s&ref=blog.lido.fi) at Devconnect Amsterdam's Staking Gathering, an integral part of our decentralization strategy is ensuring that we cultivate operator and validator sets that are healthy for the networks in which we participate. Starting with Ethereum, we plan to formulate a specific strategy document for every protocol that Lido is active on, and look forward to your feedback in bringing this all together. We invite our stakers, community members, and the wider staking ecosystem to contribute to the improvement of the above documents on our [forums](http://research.lido.fi/?ref=blog.lido.fi) and in our [discord](https://discord.com/invite/lido?ref=blog.lido.fi). ### The Next Chapter for Lido URL: https://blog.lido.fi/the-next-chapter-for-lido/ Last updated: 2023-09-12T04:43:32.000Z With the Ethereum [Merge](https://ethereum.org/en/upgrades/merge/?ref=blog.lido.fi) approaching, staking on the Beacon Chain is booming as expected. The blockchain is now secured by over US$35B equivalent (at today’s prices) in staked assets, and 75% of new stakers who joined in the last 30 days [have done so via Lido](https://dune.xyz/LidoAnalytical/Lido-Finance-Extended?ref=blog.lido.fi). ‌‌ While this validates our mission to democratize staking in Ethereum, some people have expressed concern that this level of success can make Lido a centralizing force. We hear you, and your concerns are both important to us and valuable to Ethereum as a whole. ‌‌ **Lido is already [non-custodial and permissionless for stakers](https://blog.lido.fi/the-road-to-trustless-ethereum-staking/) and, pending an upcoming Ethereum upgrade, will give them an escape hatch to unstake their ETH at any time.** ‌‌ This post will address how we currently think about the largest remaining issue - **the management of Lido’s node operator (NO) set**. We cover: - What goes into creating a good validator set. - Why a good validator set is a public good that needs active attention and funding. - How we plan on allowing permissionless validation in Lido and reducing the power of governance to an absolute minimum. ‌‌ # How to build a good liquid staking pool Any liquid staking pool faces two hard problems: - Providing a useful and deeply liquid staking token to its users (in our case stETH). - Providing a good validator set, both to users (to maximize their APR) and to the underlying blockchain (to minimize the risk of misbehavior or poor performance). ‌‌ Given the network effects at play, it is likely that the market for liquid staking will trend towards a ‘winner-takes-most’ outcome. As a result, it is important to the underlying blockchain ecosystem that the winning liquid staking provider is values-aligned and has a robust validator set. ‌‌ **The core reason we started Lido was to prevent a centralized exchange or group of exchanges from winning the staking market.** ‌‌ # What makes a good validator set? A good validator set allows users to use dapps on Ethereum L1 and L2s with the lowest risk of downtime or censorship, and the highest expected throughput. For that to happen, **the validator set needs to deliver censorship resistance and performance, both in fair weather and throughout all forms of adverse conditions.** ‌‌ In short, *the* *chain must flow* and be a credibly neutral home for applications and their users. It's easy to evaluate performance in fair weather, but dealing with tail risks and their correlation is complicated. ‌‌‌‌ # A good validator set is opinionated Lido currently selects its validator set on Ethereum by curating a periodically expanded list of peer-reviewed node operators. ‌‌ Our model for curating the list is to **minimize the following risks as much as possible**: - operator compromise. - network connectivity issues. - operator misconfiguration. - regulatory capture. - client bug. ‌‌ While we can't fully get rid of these risks, we aim to decorrelate them by creating a robust and diverse validator set with the following properties: - no operators with >1% of the total stake. - an emphasis on improving client diversity in Ethereum. - legally and physically unrelated. - operators run their own nodes (no white-label or paid APIs in the infra). - operations are distributed geographically and jurisdictionally. - distributed variation of on-premise infra and different cloud providers. - good performance. - best practices in security and key management. - operators earn well enough to build a profitable, dependable business on staking. - long-term alignment with the success of Ethereum and decentralized economies. ‌‌‌‌‌‌‌‌ # A good validator set is a public good A validator set with these properties is a public good. Why? Most stakers select their liquid staking provider based on two things: the liquidity of the staking token, and their staking APR. ‌‌ They can’t all be expected to care about the complex requirements of what makes a good validator set. This leads to a tragedy of the commons where users are incentivized to stake with the largest or most profitable provider, while the negative externalities of their choice accrue to Ethereum itself. Therefore, **unopinionated staking always leads to centralization over time.** ‌‌ An opinionated validator set is more expensive to operate and requires both funding and attention. In essence, **a good validator set requires a long-term sustainable business model.** This is a strong argument against imposing artificial constraints on any one staking provider. ‌‌ There are two reasons why imposing hard limits on liquid staking products will not lead to a good outcome: - An artificial ceiling on adoption (and hence liquidity) will shift competition to a single parameter: APR. But competition on APR is a race to the bottom that will compress any ability for the liquid staking provider to fund the provision of the public good - the robust validator set. - Only a liquid staking protocol that has reached a significant scale can generate the fees necessary to maintain a good validator market, [support the ecosystem](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xe2165bbde749b0f0bb7d8c78447eb64e5ff4e700b7905023fdd0eec820ebe5b4), and ultimately protect the blockchain itself from centralizing forces. ‌‌ Stakers will always have alternatives and a diversity of views, and will therefore not allow the winning protocol to over-capture. There is only so much premium a protocol can ask for to provide the most liquid and integrated solution. ‌‌‌‌ # Towards permissionless validation in LidoPreviously, we have established that Lido has to ensure that **the validator set is good and stays good**. At the moment, we use the simple approach of selecting operators from those that apply directly for participation in Lido. ‌‌ However, there are problems with this approach: - Not many professional node operators run their own infra and are not a one-person shop; we will run out of a candidate pool soon. - There is little incentive for an operator to improve once they are in the set. - There is no way to start small and build up for new operators inside Lido right now. - Most importantly, curation by peer-review-only will lead to a full-blown cartel in the long-term; a dystopian outcome for Ethereum that we absolutely must prevent. ‌‌ As a result, our current approach is merely a stopgap. It allows Lido to have a good operator set now, but will be replaced with a system where anyone can be a node operator, all NOs are incentivized to do their best, and the risk from governance is absolutely minimized. ‌‌ To get there, we will make two fundamental improvements to Lido. ‌‌ The first improvement is the **gradual adoption of Distributed Validator Technology (DVT)** in Lido. DVT groups validators into independent committees that propose and attest to blocks together, greatly reducing the risk of an individual validator underperforming or misbehaving. ‌‌ Once implemented, this would **allow us to onboard untrusted NOs by pairing them with a majority of trusted NOs.** This way, untrusted NOs would directly contribute to the decentralization of the group without being a risk for Lido stakers or Ethereum. The implementation of DVT is the largest focus on our immediate roadmap and we are [actively supporting its research and development](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/QmTM4MUMyLLFpP1GWY92muTML6LcEwrnUA56uuVWzWjD4q). ‌‌ The second improvement is to **create a Node Operator Score (NOS) compiled from different metrics and allocate stake based on that**. This continuous score would replace the existing binary notion of trusted/untrusted NOs and have several advantages: - Performance and other metrics directly affect an NO's stake allocation, giving them an incentive to maintain strong performance to increase their stake. - Anyone can join Lido as a NO and build up stake over time by improving their NOS. This can be done by putting one’s own skin in the game (e.g. by bonding collateral), joining committees with other NOs, showing good performance over time, and more. ‌‌ To limit risk for our stakers and Ethereum, we expect our first steps on the scoring system to start once Distributed Validation Technology is integrated into Lido. ‌‌ Designing this system is a monumental achievement to deliver. It is even more difficult while unstaking from a sub-par node operator is not yet technically possible. ‌‌‌‌ # Towards resilient Lido governance In the meantime, there are **several layers of defense against Lido governance capture**, with more being introduced soon.This work will happen in parallel to our work on permissionless staking and the first step has already been taken with the publication of a [report we recently initiated](https://medium.com/block-science/dao-vulnerabilities-a-map-of-lido-governance-risks-opportunities-92bc6384ff68?ref=blog.lido.fi) into potential governance risks affecting the DAO. ‌‌ **The main risk Lido poses for Ethereum is selecting a bad validator set.** This can happen in two ways - suddenly, or gradually. ‌‌ To understand why a sudden coup in Lido is impossible, one has to understand the constraints imposed by the Beacon Chain. Lido cannot yet un-select an operator after delegating to it. That means that any stake Lido has delegated thus far will not be able to change until withdrawals become available. ‌‌ As a result, Lido has no significant leverage to coerce operators that are already participating to do something they don't want to do: we can't even unstake them. Even when Lido is able to rotate operators ([explained in greater detail in our last decentralization update](https://blog.lido.fi/the-road-to-trustless-ethereum-staking/)), the mechanics of the staking queue ensure that it will take months to do so. ‌‌ The second and bigger risk is for Lido to gradually worsen the validator set, especially once forced exits and withdrawals are possible. If this happens, it will likely be the result of governance capture. To prevent that, we want to rely on three measures of defense: - Introducing new mechanics that prevent untelegraphed changes to Lido, such as time-locks and giving veto rights to a quorum of stETH holders. - Since Lido is non-custodial and permissionless for stETH holders, they can always voluntarily unstake and move to a competitor. - We make it easy for Ethereum core developers to fork Lido as a last resort. All it takes is to switch a few bits in our governance contract to revoke Lido’s current permissions and transfer them to a community-owned contract. ‌‌‌‌ # Conclusion Lido is just 14 months old but in that short time has already delivered tremendous value to our stakers - giving them the simplest way to participate in securing the Beacon Chain using any amount of capital. ‌‌ Meanwhile, **Lido also contributes to the decentralization and security of Ethereum itself:** - Instead of large exchanges dominating the staking market, Lido actively shapes a good validator set. We currently have 21 providers who adhere to the highest community standards and have less than 2% of the total staked Ether each (the goal is to reduce this further and we have [recently announced](https://research.lido.fi/t/announcement-onboarding-for-ethereum-wave-4/2024?ref=blog.lido.fi) the latest onboarding wave for new operators). - Instead of large amounts of stake sitting in custodial solutions, stakers control their own ETH. - Instead of complexity and opportunity cost keeping many stakers out, far more capital is securing the Beacon Chain today than otherwise would. - Instead of staking tokens confined to a walled garden, stETH is a fundamental building block powering the future of Defi. ‌‌ While these are great achievements in the short term, we are aware that the current method of managing this validator set is not sustainable and must improve. **Our vision is to build a staking solution that is fully permissionless for the blockchain itself**, and it has been our vision from the start. ‌‌ We previously made promises to the community about this roadmap and are pleased to be updating you on the parallel tracks that we are actively pursuing: 1. We will gradually adopt Distributed Validator Technology in Lido and start researching a scoring system that allows anyone to become a validator in Lido without permission. 2. We will create additional checks and balances on Lido governance, including directly empowering stETH holders to veto any decision that will be made. ‌‌ **We are deeply committed to creating and maintaining the best validator set possible, and being excellent stewards of the Ethereum ecosystem. In the next year, we hope to make meaningful progress toward the mission laid out today. Ethereum deserves nothing less, and we want to thank the entire community for continuously holding us accountable to the values of decentralization.** ‌‌ **Signed: [Core Lido](https://twitter.com/LidoFinance?ref=blog.lido.fi) & [Hasu](https://twitter.com/hasufl?ref=blog.lido.fi)** ### A New Era For Lido on Solana URL: https://blog.lido.fi/new-era-for-lido-on-solana/ Last updated: 2022-04-13T18:06:47.000Z In September 2021 Lido launched [liquid staking for Solana](https://lido.fi/solana?ref=blog.lido.fi) in collaboration with the [Chorus One](https://chorus.one/?ref=blog.lido.fi) team. Since then we have seen tremendous momentum, with 3,000,000+ SOL staked and countless stSOL integrations paving the way for stSOL within the flourishing Solana ecosystem. Lido on Solana was initially developed by the Chorus One team as part of a LEGO - Lido Ecosystem Grants Organisation - initiative to grow the presence of Lido across an array of staking networks. The proposal by Chorus One was approved by the Lido DAO and 6 months later liquid staking on Solana was launched. Despite the significant role of Chorus One as part of the Lido DAO - as node operators, governance members and advisors - the time has come for management of Lido on Solana to transition. Due to organisational changes at Chorus One, a proposal was recently submitted to transfer ownership of the Lido on Solana project to P2P Validator, core members of the Lido DAO and the team responsible for liquid Ethereum staking on Lido. This proposal was submitted for a DAO vote 7 days ago and has passed today, paving the way for a new era of Lido’s liquid staking on Solana. P2P has been involved with Lido and stSOL since launch as validators, as well as through participating in boosting TVL in collaboration with Lido through incentivization initiatives, integrations and much more. We’re incredibly excited for this transition with P2P and we look forward to re-engaging with the flourishing Solana community and to align ourselves further with the values of Solana. ### Introducing P2P Validator [P2P Validator](https://p2p.org/?ref=blog.lido.fi) has been an active participant in the Solana ecosystem since the beginning of Solana, acting as a leading developer and validator across the network with more than $400m in staked assets. In addition to this, P2P has shown tremendous support for the Solana network infrastructure across projects including [Wormhole Bridge,](https://portalbridge.com/?ref=blog.lido.fi#/transfer) [Pyth](https://pyth.network/?ref=blog.lido.fi), and [Neon EVM](https://neon-labs.org/?ref=blog.lido.fi). P2P has pioneered the Proof-of-Stake industry since 2018 and uses its experience and gained expertise to continuously improve the quality of validation. With an overarching focus on decentralisation, P2P has shown exceptional commitment to supported networks as validators, governance participants and more. Their proficiency as validators has been complemented by their research activities, including extensive analysis on [*Downtime*](https://www.stakingrewards.com/journal/solana-validators-performance-research-report-part-1-downtime-analysis/?ref=blog.lido.fi) and [*Skip Rate*](https://www.stakingrewards.com/journal/solana-validators-performance-research-report-part-2-skip-rate-analysis/?ref=blog.lido.fi)*s*, created to add value to Solana’s validators performances. P2P has a dedicated team entirely focused on achieving results to advance the presence of staked assets within Solana, with determination to build a sustainable pool of validators, empower the Solana community and increase staked TVL. The exact terms and timelines of the transition to P2P can be found here: [Lido on Solana - Proposed Transition from Chorus One to P2P](https://research.lido.fi/t/lido-on-solana-proposed-transition-from-chorus-one-to-p2p/1887?ref=blog.lido.fi). ![](https://blog.lido.fi/content/images/2022/04/1500x500.png) ### Our Mission for Solana Our overarching goals for Lido on Solana are two-fold: **1\. **Increase Solana Network Decentralisation & Performance** The ultimate goal of the new era of Lido on Solana is to build a sustainable, high-performance validator set, contributing to the decentralisation, stability and performance of the Solana chain. A number of factors fall within this category, including: - Provide a public dashboard with open validator performance data. - Provide clean onboarding instructions to increase validator set - Expand the number of validators in the cluster and bring new node operators to Solana - Сontinuous improvement of validators parameters based on metrics - Provide a validator education program to improve the skills and level of node operators. - Ensure an adequate profitability on validators in the pool by balancing the number of validators and stakes in the pool. **2\. **Grow The Solana DeFi Community Economics** Staked SOL with Lido has grown to $300+ million, and with it comes an added responsibility to align ourselves with the values and requirements of the Solana community. - Drive DeFi TVL through integrations with value-adding protocols (Aldrin, Apricot, Atrix, Francium, Friktion, Jet, Katana, Larix, Mercurial, Orca, Port, Psy Finance, Raydium, Saber, Solend, Tulip, Zetamarkets). - High rewards and attractive APY’s through Lido’s incentivisation program. - Improving Solana network onboarding through targeting of non-defi users (NFT, GameFi). - Enhanced community support and engagement through shared research, community calls, grant distribution and more. ### Moving Forwards We have a lot of work to do and we look forward to continuing to grow our presence within the Solana ecosystem. Together with P2P, Lido is on a mission to add value to Solana users and developers and we have a number of initiatives lined up which we hope will allow us to do this. Our goal, above all else, remains to preserve the culture, diversity and decentralisation of Solana, and this new era of Lido on Solana paves the way for this. If you have any feedback, ideas or suggestions, jump in our [Discord](https://discord.com/invite/vgdPfhZ?ref=blog.lido.fi) and let us know. ### Modelling The Entry Queue Post-Merge: An Analysis of Impacts on Lido’s “Socialized Model” URL: https://blog.lido.fi/modelling-the-entry-queue-post-merge-an-analysis-of-impacts-on-lidos-socialized-model/ Last updated: 2026-03-06T12:43:56.000Z The Beacon Chain exists separately to the Ethereum Mainnet doling out rewards to the validators that correctly perform their duties. The Merge, the most anticipated event of 2022 in crypto world that will connect the Beacon Chain and the Ethereum Mainnet, is expected to bring a significant increase in staking APR causing an increasing amount of ETH2 deposits and, as a result, the entry queue. Lido, being the leading Ethereum staking pool with more than 3M staked ether, uses a so-called “socialized model” for paying rewards to its users. It implies that rewards earned by Lido’s validators are being divided among existing and new users in proportion to amount staked although queueing validators do not earn any rewards until being activated. Currently, Lido’s staking APR is about 4% and the Merge will raise it up to 8.5%. We conducted this research to figure out to what extent the decrease in staking APR due to the expected entry queue may affect our existing users. Based on historical data and multiple simulations with the network's parameters, we developed standard (the most probable) and “harsh” (the most extreme) scenarios of the Beacon Chain growth. In the standard scenario (3M ether staked in 6 weeks, Lido share 50%), there will be a slight decrease short-term in Lido’s APR but over a one-year perspective the APR loss would not exceed 0.07 percent point (or by 1%). In the “harsh” scenario that seems quite unlikely (5M ether staked in 8 weeks, Lido share 80%), the APR would not go below 0.42 percent point (or by 6.2%). Thus, we do not recommend changing the “socialized model” and if the “harsh” scenario came true, Lido would introduce the upper limit for the protocol growth aimed to protect the existing Lido’s users from the significant APR loss. # **Merge, MEV, APR and all that jazz** Why should one expect an entry queue during the Merge period? There are at least two reasons for that. The first one is about the expected increase in validators’ rewards. At the moment, the Beacon Chain validators receive rewards only for their duties such as proposing and attesting blocks. Currently, the staking APR on the Beacon Chain is about 4.4%. With every new validator, the APR decreases because the amount of rewards is inversely proportional to the number of active validators on the network. The Merge, transforming the Ethereum proof-of-work chain to the proof-of-stake one, will add priority fees and MEV (Maximal Extractable Value) to the validators’ rewards causing an increasing demand for staking and, as a result, an increasing amount of deposits to the Beacon Chain. How much can we expect the APR to rise? Priority fees are expected to bring the other 20-22k ether per month, or 2-2.5% (percent point) to the APR. ![](https://lh3.googleusercontent.com/wnyHiXoOSeTyrpGm6On7NvAA23FUpzgYdqN-VWyGRBPuqxL6O7vOiNvg94iLRJxa4xVU43WbtF_kDT5g6VcU8Z6_T1-n90YbEvqne0kNOebp6uWaNlE5X3NRIHBGBHpe5U-qxbHE) [**Source**](https://dune.xyz/queries/394838?ref=blog.lido.fi) MEV, in turn, being a total value that can be permissionlessly extracted from the re-ordering, inclusion or censoring of transactions within a block[ is expected to nearly double ](https://hackmd.io/@flashbots/mev-in-eth2?ref=blog.lido.fi)current staking APR. Based on average moving 30-days' sum of daily priority fees (22.4k ETH per month) and the[ Flashbots data](https://github.com/flashbots/eth2-research?ref=blog.lido.fi) collected by MEV-Geth node, public mev-blocks API and Flashbots activity dashboards, at the current level of validators (323k) validator rewards will give an APR of 8.97% rather than a pre-Merge APR of 4.4%. ![](https://lh4.googleusercontent.com/n7vC4JA2QL70w5G85r8JaSLe7f-sgOKcMIDohP1DH6gxLcMJgNd4HuUgqk8uwEdAUUkbfcYx3dheSGP-3MwqtGWMgyNzljdxS3uHpa4f0nV8fA3SJbVwXiiAYDFqL13QD2BjFT_r) Obviously, the increased APR will attract new deposits to the Beacon Chain and here the Beacon Chain design, as the second entry queue reason, comes into play. In order to prevent turbulent changes in key network parameters due to entry or exit of a significant number of validators at the same time, the Beacon Chain specs implies a limited number of deposits and new validators per epoch. To be precise, the current limits are set up as 5 validators and 16 deposits per epoch that allows the network to “metabolize” only 1125 new validators, or 36K ETH per day. When this number exceeds the epoch limit, we can observe (even before the Merge) an entry queue with zero rewards for queueing validators. In the future this limit is going to be higher, like 1 validator per each 65k active validators that will speed up the entry queue handling. These two factors - increasing APR and entry/exit limits - question the existing Lido’s “socialized model”. While there is no entry queue or a small one, this model works well. If the Merge brings a long queue (about a month or two), Lido’s “socialized model” may cause possible APR loss for existing users. The alternative - “model with an entry queue” - implies that rewards earned by Lido’s validators are being divided among only existing users in proportion to amount staked and new users will receive the staking rewards after validators activation. We need to find out whether the “socialized model” is still usable and effective for different Merge scenarios or it should be replaced by the other one and what are the conditions that can articulate this. # **Modelling entry queue** ## **Model Design & Key Assumption and Constraints** In order to forecast the Beacon chain parameters one has to model two different periods: from now to the Merge date and post-Merge period. For the first one we used both autoregression and linear models, for the latter - scenario analysis. The other important assumptions are as follows: - The Merge date is taken as 2022-06-01. - For the altair period we used a multiplier which provides more or less the same outcome. - MEV parameters are taken from [Flashbot data](https://github.com/flashbots/eth2-research?ref=blog.lido.fi) mentioned above and they don’t change over the time. - The priority fee per month [is calculated](https://dune.xyz/queries/382535?ref=blog.lido.fi) as average of moving 30d average without one outlier and they also don’t change over the time. - We assume that all validators participate perfectly and get the maximum reward possible, and all rewards are distributed evenly on an infinite timescale. ## **Momentary vs. Long-term APR** We distinguish 2 types of staking APR: momentary and long-term. The difference between them is fundamental to understanding the real income or loss on the network. While the momentary APR reflects the annualized return per validator on the network with a particular number of validators, the long-term APR is the return per validator earned in a one-year perspective and is a function of the validator's activation date. In this case, we have to switch from “No of validators” to “Time” on the *X* axis and see how the long-term staking APR has been evolving over time. ![](https://lh4.googleusercontent.com/Bh8cMqqGXwJcom2bFNjSZCG1FOgKXCA0h2vkj4-Jk0IqUyNapM15BjzDvFxf6XWRgz7EGz0PmMEfJjmlbzLN3U8YuM-gprY6GJJUv5wy1K4l5LrzTpDadqc2In8CRvs_ajDGZJIZ) Let us illustrate the concept with an example. We are used to operating with the momentary APR (green line) while not a single validator has ever earned 20% staking returns over a year. For instance, if you activated your validator at Genesis date (2020-12-01), your *momentary* APR was around 20% (percent points) and it was decreasing steadily, epoch by epoch, with every new validator activated. Thus, your *long-term* APR for a one-year period taken from 2020-12-01 to 2021-12-01 is about 8.4% (percent points) (blue line). ## **Scenarios simulation** For the simulations, we used several parameters that constitute the network and Lido’s place in the market: - The network post merge dynamic: we simulated scenarios with constant number of validators per epoch as well as network linear growth with fixed epoch limit loading. - Entry queue size and duration immediately before and right after the Merge date: we assumed that the demand for staking would increase a few weeks before the Merge date and would last for weeks/months after, thus modelling scenarios of the market agitation. - Lido’s daily share: we considered options from 0.40 to 0.80 of daily amount arriving to the Beacon Chain. We identified and modelled three basic scenarios in order to define the maximum amount of rewards and APR loss for Lido’s existing users in case of the entry queue during the Merge period. ![](https://blog.lido.fi/content/images/2022/04/Screenshot-2022-04-06-at-15.09.10.png) The most probable scenario - “Standard” - will not affect the users. According to the scenario, 3M ETH will be staked during 6 weeks around the Merge that leads to almost 0.07 percent points (1% compared to the model with an entry queue) of the APR loss for the Lido stakers in a one-year perspective. So, let us look through the most extreme one - “Harsh”, that implies the arrival of 5M ether in 8 weeks. However, being compared to the current 10M ETH total deposited in 16 months, it seems very unlikely to get such an increase in ETH deposits. ![](https://lh3.googleusercontent.com/3a3wLfrDWfUeP5MwySxtFkSbEcZW5e5-6_da5LcQaZROAMtv0val_lffTsfrseRraAFyfy3R0SOEvbYuAFA9lTaqaQlL3tl8jCuHNhU0OLFK3yXhXDUlAAYCuK9nN99AP7otMjUq) We found out that this scenario would cause the decrease in the existing Lido’s users long-term APR of no more than 0.42 percent points (by 6.2% compared to the model with an entry queue). It means that even in the “harsh” scenario the maximum rewards deficiency for existing Lido’s users would not exceed 5 ETH per every 1k ETH staked with Lido. ![](https://lh6.googleusercontent.com/gQghwZ3uCdK4ivmf1MkuFCPWqMKK2UjTR41d8V6rfeagqC4h8YqxfNbEsgqJBPsAcLpR476I_k9iwmpyLMTrMOsEZ_qThBLUSuHIniIdYp88zDzXkIqDgONNO9wyfb4YJdQ8D9F6) Obviously, if the expected amount of arriving ETH increased, the queue period reduced, the network growth slowed down and Lido’s daily share were higher, the situation would worsen and cast doubt on adhering to the “socialized model”. We also modelled a “like Genesis” scenario that does not bring any notable APR loss. Combining all these parameters in multiple simulations, we found out that the most impactful one is the ETH amount. The amount of 5M+ ETH shifts the long-term APR loss to 0.5 percent points and further despite the changes in the other parameters. The full analysis is available [here](https://github.com/lidofinance/modelling-entry-queue-post-merge.git?ref=blog.lido.fi). # **Key Takeaways** An expectation of higher post merge staking APR together with simultaneously entering validators limitation will cause the entry queue to drastically increase. Lido’s “socialized model” works well for the most probable scenario and we do not see any reason to change it. We admit that the adherence to the “socialized model” will decrease the long-term APR for Lido’s existing users in the short term, but this deficiency is small. Based on multiple simulations with such parameters as network growth rate, Lido’s share, amount of ETH in the entry queue and duration of the queue period, we found that although there was a short-term decrease in staking APR in the “socialized model” due to the expected entry queue, in a one-year perspective the APR loss would not exceed 0.07 percent point (0.97%) in the standard scenario. Even in the “harsh” scenario that seems quite unlikely, the APR would not go below 0.42 percent point (6.2%). Moreover, we revealed that the only parameter that plays an important role in long-term staking APR loss is the amount of ETH arrived due to the market agitation. Regardless of the other parameters, only the arrival of more than 5M ETH to the network during the Merge period will decrease the Lido’s APR by 0.5 percent points (7.75%) in a one-year perspective only; that seems quite unlikely. In case we underestimated the amount of ETH waiting to be staked, we can reconsider the option to put forward our recommendation to introduce a queued model for Lido deposits. ## Acknowledgements We would like to thank Vasiliy Shapovalov, Eugene Pshenichniy and Sam Kozin for their valuable comments and suggestions. ### Lido on Polygon | Bug Bounty Terms URL: https://blog.lido.fi/lido-on-polygon-bug-bounty-terms/ Last updated: 2026-08-26T15:20:14.000Z In collaboration with [Shard Labs](https://shardlabs.io/?ref=blog.lido.fi) and [Immunefi](https://immunefi.com/?ref=blog.lido.fi), we’re pleased to unveil our comprehensive bug bounty program for [Lido on Polygon](https://polygon.lido.fi/?ref=blog.lido.fi). Earn up to $2 million in bounties - with no KYC requirements - for helping us ensure the security of a cutting-edge liquid staking solution for Polygon. **Get started on** [**immunefi.com/bug-bounty/lido/information**](https://immunefi.com/bug-bounty/lido/information/?ref=blog.lido.fi)**.** ## Lido On Polygon Working in conjunction with Shard Labs, Lido launched liquid staking for Polygon in March 2022\. Built around stMATIC, Lido now lets users earn staking rewards on their MATIC without the need for complex infrastructure or locked/illiquid tokens. With Lido, MATIC ecosystem participants can generate staking rewards and contribute to the security and stability of the Polygon chain through 1-click staking. Lido on Polygon launched with an initial $1m cap on staked assets. This cap was raised to $10M and staked assets have since grown to approximately $7.4m at the time of writing. ## Bug Bounty Scope For a full overview of the scope of the bug bounty, please visit [**immunefi.com/bug-bounty/lido/information**](https://immunefi.com/bug-bounty/lido/information/?ref=blog.lido.fi). Only the impacts listed below are accepted within this bug bounty program: ### Smart Contracts ***1\. Critical*** - Any governance voting result manipulation - Direct theft of any user funds, whether at-rest or in-motion, other than unclaimed yield - Permanent freezing of funds - Miner-extractable value (MEV) - Insolvency - Theft of unclaimed yield ***2\. High*** - Permanent freezing of unclaimed yield - Temporary freezing of funds for a minimum period of 24 hours ***3\. Medium*** - Smart contract unable to operate due to lack of funds - Block stuffing for profit - Griefing (e.g. no profit motive for an attacker, but damage to the users or the protocol) - Theft of gas - Unbounded gas consumption ***4\. Low*** - Smart contract fails to deliver promised returns, but doesn’t lose value ### Websites and Applications ***1\. Critical*** - Ability to execute system commands - Extract Sensitive data/files from the server such as /etc/passwd - Stealing User Cookies - Taking Down the application/website - Signing transactions for other users - Redirection of user deposits and withdrawals - Subdomain takeover resulting in financial loss (applicable for subdomains with addresses published) - Wallet interaction modification resulting in financial loss - Direct theft of user funds - Tampering with transactions submitted to the user’s wallet - Submitting malicious transactions to an already-connected wallet ***2\. High*** - Spoofing content on the target application (Persistent) - Users Confidential information disclosure such as Email - Subdomain Takeover without financial loss (applicable for subdomains with no addresses published) - Privilege escalation to access unauthorized functionalities ***3\. Medium*** - Changing details of other users without direct financial impact (CSRF) - Third-Party API keys leakage that demonstrates loss of funds or modification on the website. - Redirecting users to malicious websites (Open Redirect) ***4\. Low*** - Framing sensitive pages leading to financial loss (ClickJacking) - Any impact involving a publicly released CVE without a working PoC - Broken Link Hijacking Payouts are handled by the Lido on Polygon team directly and are denominated in USD. Payouts can be done in ETH, DAI, RAI or LDO, at the decision of the bug bounty hunter. ## Moving Forwards At Lido, our priority is the security of our staking solutions and ensuring the long-term well being of both our users and the surrounding staking communities. It is for this reason that we’re offering a bug bounty, inviting third-party developers to test out the robustness of our systems. If you have any questions or desire to collaborate with us, please feel free to contact us via [info@lido.fi](mailto:info@lido.fi). Happy hunting! ### Lido On Polygon URL: https://blog.lido.fi/lido-for-polygon/ Last updated: 2026-06-22T13:53:18.000Z *Phase 1 of Lido on Polygon is here. Get started on [*polygon.lido.fi*](https://polygon.lido.fi/?ref=blog.lido.fi).* Today we’re pleased to bring you Lido on Polygon. Lido on Polygon, developed in collaboration with Shard Labs, is a liquid staking solution for MATIC. MATIC holders can now seamlessly earn staking rewards on their tokens without the need for complex infrastructure or locked/illiquid tokens. Stake your MATIC with Lido to receive stMATIC tokens which can be traded, transferred and used across the growing Polygon DeFi space. To get started, visit **polygon.lido.fi**. Phase 1 of Lido on Polygon has a $1M deposit cap to ensure things work as intended. In April, this cap will be removed and phase 2 of Lido on Polygon will start. ![](https://blog.lido.fi/content/images/2022/03/prev--1-.png) ## Staking MATIC with Lido When staking MATIC with Lido you will receive stMATIC tokens in exchange for your MATIC. Your stMATIC represents your staked tokens, generating rewards and contributing to the security and stability of the Polygon chain. Your stMATIC is an ERC20 token which represents your share of the total supply of MATIC within the ‘Lido on Polygon’ system. Unlike stETH, Lido’s staked ETH, **stMATIC is NOT a rebasable token.** This means that your balance of stMATIC is not going to increase on a daily basis to reflect rewards. Instead, the value of your stMATIC will change relative to MATIC as staking rewards are earned. stMATIC will be integrated into a number of DeFi protocols across both Ethereum and Polygon for users to compound their rewards and contribute to the growing Polygon space. ## PoLido Node Operators If you are interested in joining Lido on Polygon as a Node Operator, please get in touch. The application form for submissions will be open from Mar 1st (23:00 UTC) — Mar 25, 2022 (23:59 UTC). All interested parties can apply [**here**](https://forms.gle/bAbWTCRgg7Ha5BkX8?ref=blog.lido.fi). ## Additional Resources - [Lido on Polygon - Proposal by Shard Labs](https://research.lido.fi/t/lido-for-polygon-proposal-by-shard-labs/816?ref=blog.lido.fi) - [Shard Labs Is Bringing Lido To Polygon](https://blog.polygon.technology/shard-labs-is-bringing-lido-to-polygon/?ref=blog.lido.fi) - [PoLido - Lido on Polygon](https://news.shardlabs.io/polido-lido-for-polygon-a491bbe4a81d?ref=blog.lido.fi#:~:text=Lido%2C%20the%20largest%20liquid%20staking%20protocol%20on%20Ethereum%2C%20Terra%20and,a%20button%20on%20the%20UI.) ### Lido UI Potential Malicious Code Injection - Bug Bounty Report URL: https://blog.lido.fi/lido-ui-potential-malicious-code-injection-bug-bounty-report/ Last updated: 2026-05-05T21:50:52.000Z On 21.02.2022 Lido has received [Immunefi](https://immunefi.com/?ref=blog.lido.fi) report from the [United Global Whitehat Security Team](https://ugwst.com/?ref=blog.lido.fi) on a vulnerability affecting a number Lido UIs, including landing page [lido.fi](http://lido.fi/?ref=blog.lido.fi), Ethereum & Terra staking widgets [stake.lido.fi](http://stake.lido.fi/?ref=blog.lido.fi) & [terra.lido.fi](http://terra.lido.fi/?ref=blog.lido.fi), Easy Track UI [easytrack.lido.fi](http://easytrack.lido.fi/?ref=blog.lido.fi) and two informational pages [lego.lido.fi](http://lego.lido.fi/?ref=blog.lido.fi) & [careers.lido.fi](http://careers.lido.fi/?ref=blog.lido.fi). The vulnerability consisted in the way the nextjs’ 'image' module handles particular missing file edge-case, allowing for malicious code injection on [lido.fi](http://lido.fi/?ref=blog.lido.fi), [stake.lido.fi](http://stake.lido.fi/?ref=blog.lido.fi), [terra.lido.fi](http://terra.lido.fi/?ref=blog.lido.fi) & [easytrack.lido.fi](http://easytrack.lido.fi/?ref=blog.lido.fi) and open redirect from [lego.lido.fi](http://lego.lido.fi/?ref=blog.lido.fi) & [careers.lido.fi](http://careers.lido.fi/?ref=blog.lido.fi). **The vulnerability has been patched for all reported domains in 5.25 hours after receiving the report, and based on url access logs no user have been affected.** During the investigation, we discovered that the endpoints would reflect whatever was supplied in the url parameter for the nextjs image component endpoint. So,if we browse to https://lido.fi/next/image?url=/testing/&w=256&q=7, the phrase testing will appear in the HTTP response. The image endpoint was vulnerable to MIME sniffing, according to the researcher, since it lacked a content-type header and X-Content-Type-Options: nosniff header. As a result, the researcher was able to create a proof-of-concept that executed javascript in context on lido domains using MIME sniffing techniques. Malicious code injection potentially allowed attacker to change the page contents & hijack user input *on Lido-owned domain*. That makes the vulnerability of critical impact, as attacker could craft the specific link to, say, [stake.lido.fi](http://stake.lido.fi/?ref=blog.lido.fi), so the users following that link would be sending funds to attacker’s wallet instead of Lido staking contracts. Another high-impact attack vector example would be preparing a link adding “share your seed phrase” form to [lido.fi](http://lido.fi/?ref=blog.lido.fi) landing page. Informational pages [lego.lido.fi](http://lego.lido.fi/?ref=blog.lido.fi) & [careers.lido.fi](http://careers.lido.fi/?ref=blog.lido.fi) weren’t vulnerable to malicious code injection, but allowed for open redirect: user following a specifically formatted link to lido to [lego.lido.fi](http://lego.lido.fi/?ref=blog.lido.fi) or [careers.lido.fi](http://careers.lido.fi/?ref=blog.lido.fi) could have been redirected to another web domain, allowing for making legit-looking phishing links, but not pages. Note that in this case the domain would be different from the Lido-owned one, decreasing the potential impact. With the phishing being pervasive issue for web3 projects, such vulnerability could have significant impact. We’re very grateful to the [United Global Whitehat Security Team](https://ugwst.com/?ref=blog.lido.fi) for the report and all the effort went into preparation & checks, as well as to [Immunefi](https://immunefi.com/?ref=blog.lido.fi) for facilitating the communication. Two bounties for the vulnerabilities have been payed out, one for critical and one for low tiers on malicious code injection and open redirect respectively. Stay safe out there! ### Guide: Borrowing & Lending on Aave URL: https://blog.lido.fi/aave-integrates-lidos-steth-as-collateral/ Last updated: 2023-09-19T17:10:26.000Z [Aave](https://aave.com/?ref=blog.lido.fi), a lending platform that allows users to borrow and supply assets, has integrated [Lido’s stETH](https://lido.fi/ethereum?ref=blog.lido.fi) as a collateral asset on their platform. Users can now borrow assets against their stETH all the while *retaining their Ethereum* staking rewards whilst stETH is supplied as collateral. [Lido’s stETH](https://blog.lido.fi/steth-the-mechanics-of-steth/) is a liquid token representative of staked ETH. When a user stakes their ETH with Lido, the user will be granted an stETH token. This token rebases once a day to reflect their staking rewards, and will be redeemable for ETH once withdrawals on the beacon chain are supported. If a user were to supply their stETH as collateral on Aave, they would still retain those staking rewards since stETH rebases daily. This user would then be able to withdraw a greater amount of stETH than they initially deposited! They still earn staking rewards! *Please note: stETH is only supported as lending collateral. Borrowing stETH on Aave is not currently supported.* ### What is Aave? *For a more in-depth understanding of Aave, please refer to the* [*Aave docs*](https://docs.aave.com/faq/?ref=blog.lido.fi)*.* Aave is a decentralised, non-custodial lending platform that allows any user to supply their assets to earn rewards, or to borrow other assets by users supplying their own assets as collateral. Aave creates this market for the DeFi community that helps expose them to a variety of different assets. Suppliers can supply assets to the protocol to earn rewards, and borrowers can then borrow those assets by supplying their own assets as collateral via an over-collateralisation mechanism. In cases of liquidations, the borrower’s collateral will then be sold to cover any expenses. ## Staking Strategies with Lido and Aave ### Self-repaying Loan Lido’s stETH is a productive asset which increases in balance every 24 hours through a supply rebase (unless there's a slashing on beacon chain; there has never been one with Lido). This lets you earn rewards on your collateral on a daily basis, lowering your liquidation ratio every day and offsetting the borrow rate. ### Leveraged Ethereum Staking Aave’s integration of Lido’s stETH effectively allows users to leverage their ETH staking, maximising their staking returns beyond the standard Ethereum staking rewards. The way that this works is by supplying your stETH as collateral, borrowing ETH against it (with much less volatility in relation to stETH compared to something like DAI, etc.), and then re-staking that ETH for stETH. You can repeat this process a number of times depending on your risk appetite and limited by Aave's collateralization ratios. Be wary of gas fees, especially since "unfolding" this pattern will take numerous transactions. ## How to borrow against stETH *Please note: Liquidations may result in permanent loss of your stETH! Please first understand what you are doing before you do anything carelessly.* 1. Head over to [Aave](https://app.aave.com/?ref=blog.lido.fi#/markets). 2. Select the “Lido Staked Ether” market under “Assets”. 3. Connect your wallet by clicking the button in the top right corner. 4. Select “Deposit” 5. Input the amount of stETH that you would like to deposit. 6. Confirm the approval transaction. 7. Confirm the deposit transaction. 8. After completing the transactions, select “Dashboard”. 9. Select “Borrow Now” 10. Select the asset that you would like to borrow. 11. Enter an amount that you would like to borrow. 12. Choose between “Stable APY” or “Variable APY” and select “Continue”. *For more information, please refer to these* [*docs*](https://docs.aave.com/faq/borrowing?ref=blog.lido.fi)*.* 13. Select “Borrow” and confirm the transaction. Ta-da! You have successfully borrowed an asset using your stETH as collateral. - **Maximum LTV**: The maximum borrowing power of the collateral. - **Liquidation threshold**: Threshold where loan is liquidated. - **Liquidation penalty**: Penalty applied when loan is liquidated. ## How to repay loans 1. Head over to your [dashboard](https://app.aave.com/?ref=blog.lido.fi#/dashboard). 2. Under “Your Borrows”, select “Repay”. 3. Input the desired amount that you would like to repay on your loan. 4. Confirm the approval transaction. 5. Select “Repay” and finalise the transaction. You have now successfully repaid your loan. ## How to withdraw stETH collateral 1. Head over to your [dashboard](https://app.aave.com/?ref=blog.lido.fi#/dashboard). 2. Under “Your Deposits”, select “Withdraw”. 3. Input the desired stETH amount that you would like to withdraw. 4. Confirm the approval transaction. 5. Select “Withdraw” and finalise the transaction. You have now successfully withdrawn your stETH collateral. ## Additional Resources - [Introducing Lido](https://blog.lido.fi/introducing-lido/) - [Aave FAQ](https://docs.aave.com/faq/?ref=blog.lido.fi) - [Aave Borrowing Explained](https://docs.aave.com/faq/borrowing?ref=blog.lido.fi) - [The Mechanics of stETH](https://blog.lido.fi/steth-the-mechanics-of-steth/) ### Optimizing DAO Governance with Easy Track URL: https://blog.lido.fi/optimizing-dao-with-easy-track/ Last updated: 2023-01-30T14:53:49.000Z ### Streamlining specific Lido DAO governance pipelines The [Easy Track](https://easytrack.lido.fi/?ref=blog.lido.fi) application has been developed as an efficient mechanism to assist with routine and uncontentious governance proposals for the Lido DAO. Several shortcomings of alternative governance tools as they relate to every-day operations such as voter fatigue, high on-chain gas costs, and difficulties reaching quorum despite community consensus are all addressed with this new application. Importantly, security, flexibility, and scalability were all paramount concerns throughout the development of Easy Track, with extensive measures taken to ensure that safety has not been compromised for convenience. Before addressing how Easy Track operates, it will be instructive to briefly highlight the factors motivating its construction and the drawbacks associated with the former Aragon governance mechanism. While the Aragon application is a powerful tool for DAO governance due to the fact that it is both transparent and reliable, it is ill-suited to manage routine operations that either have strong token-holder support and/or are only relevant to a subsection of the DAO (e.g. the financial operations team). For Lido, in particular, governance proposals of this kind include allocating funds to reward programs, LEGO grants, and increases to the staking limits for node operators. In all cases, it is costly, both in terms of on-chain Ethereum gas costs and mental attention, for these proposals to be presented to the entire community of token-holders. Moreover, it is not uncommon for these proposals to be rejected, not because token-holders oppose the decision, but because the necessary quorum of votes has not been attained. All of this contributes to voter fatigue and, more generally, it represents an inefficient use of time and resources for all involved. ![](https://blog.lido.fi/content/images/2022/02/1210.png) Omnibus proposals, which bundle several small proposals together into one vote, have been adopted as an intermediate solution to this problem historically. This work-around, however, does not directly address the core problems just highlighted, and it also introduces further complications if a specific component of the omnibus vote is challenged by token-holders while the rest remain supported. ![](https://blog.lido.fi/content/images/2022/02/1211.png) ### Easy Track as a DAO Governance Solution The Easy Track governance application, however, addresses all of these problems directly by inverting the voting decisions for token-holders. Rather than requiring every minor governance proposal to receive an affirmative vote from a quorum of token-holders, Easy Track proposals, which are called “motions,” will pass automatically unless token-holders actively vote against them. The objection threshold, which is the number of votes required to reject a motion, will always be set to a very low level. For now the voting level is 0.5% for any motion and subject to the possible of DAO based votes to change this figure. There is however, a hard cap at 5%. This allows easy rejection by token-holders in the event of any motion disagreement. If a motion is rejected alerts will be broadcast to key stake-holders so as to facilitate a deeper discussion in the community. Furthermore, the voting window for each motion is set to 72 hours with the DAO able to decrease this to 48 hours and there will never exist more than 12 active motions at once. All of this will significantly reduce voter costs and fatigue because token-holders are only required to interact with Easy Track in the event that they oppose a motion. Worth emphasising is the fact that Easy Track has been designed with both flexibility and scalability in mind. Initially, Easy Track motions will only be employed in a small number of settings and, as already mentioned, will be used exclusively in relation to those uncontentious and routine proposals that already have strong community support. With that being said, extensions of the application are possible if supported by the Lido community, with internal upgrades of the system already underway. Additionally, an intuitive and easy to use user interface has been developed to assist token-holders looking to navigate and interact with present and past motions. ### Easy Track Precautions Several security precautions have also been built into the system, with safety being a primary concern for all involved. Firstly, the set of executable actions that Easy Track can undertake is strictly limited. Secondly, motions can only be created by a set of whitelisted accounts. For example, a motion to increase a node operator’s staking limit may only be created by that node operator. Equally, a motion to increase the funds available for the LEGO program may only be created by the LEGO committee multi-sig, etc. Thirdly, a fail-safe emergency brakes lever has been implemented that, when signed by the Easy Track developer multi-sig, will pause all motions until a traditional DAO vote has passed to reinstate the program. Fourthly and finally, while many aspects of this new governance mechanism are quite sophisticated (e.g. the use of graph indexing to organize historical data in a very efficient manner), multiple security audits have been undertaken. Both MixBytes() and Sigma Prime have each independently audited the 16 smart contracts that undergird Easy Track. These audits, when paired with the extensive internal testing in the testnet environment and the rigorous use of the unique UI, can leave all involved very confident in the security and safety of Easy Track when moving forward. ![](https://blog.lido.fi/content/images/2022/02/1212.png) ### TL;DR With all of this in mind, Easy Track represents an efficient improvement to governance of the Lido DAO. The novel Easy Track motions will not only reduce voter fatigue and on-chain gas costs for token-holders, but will also facilitate the growth of the DAO by providing greater autonomy to the sub-committees and node operators within the organisation. As demonstrated above, Easy Track has been developed with security and safety in mind while also remaining flexible and scalable in order to grow along with the Lido DAO. Thus, the internal functioning of DAO operations will be significantly improved following the implementation and adoption of Easy Track. ### Additions to Ethereum Node Operator Set - Wave 3 URL: https://blog.lido.fi/eth-wave3-operators/ Last updated: 2023-01-30T14:53:38.000Z ### The DAO has approved 8 new Node Operators for Lido's Ethereum set and mainnet onboarding is being finalized in the coming days. Continuing along the journey towards [trustless staking on Ethereum](https://blog.lido.fi/the-road-to-trustless-ethereum-staking/), Lido conducted an open onboarding application and evaluation round in November and December of 2021 for the inclusion of additional Node Operators into its Ethereum operator set. Following the evaluation of 23 applications by the Lido Node Operator Subgovernance Group (LNOSG), a cohort consisting of 8 operators was shortlisted and [sent to the DAO for approval](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/0xb60854f1e6224dc8688c71cec30ef442fa441bb2a918f2317a094644c895b87a), which was finalized and approved via snapshot on December 14th 2021\. Given the the very strong showing of the applicants this round, this is the first time that the LNOSG felt comfortable proposing this many operators at once. More information about the application and evaluation process can be found on [Lido's forum](https://research.lido.fi/t/announcement-onboarding-for-ethereum-wave-3/1379?ref=blog.lido.fi). ### Mainnet Onboarding & Cohort Details Following the DAO's approval, these eight operators have been participating on the Lido testnet and preparing to join the other mainnet operators. Once the Aragon vote for the registration of our new eight operators has passed, the operators will be a part of the mainnet set. Below you can find a description and statement for each of the operators joining our Ethereum set (listed in alphabetical order). | | | | | --------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | [![bridgetower-1](https://blog.lido.fi/content/images/2022/01/bridgetower-1.png)](https://www.bridgetowercapital.com/?ref=blog.lido.fi) | | BridgeTower Capital is a Blockchain infrastructure and services company running high-quality Validator Nodes with maximum reliable uptime. BridgeTower is operating high-quality staking infrastructure in Switzerland with 100% renewable energy.We are thrilled to join Lido with BridgeTower's strategically located Swiss staking and node operations. Lido’s ascension in the space has been impressive. BridgeTower has followed a similar path, quickly becoming a leading operator of highly scalable staking infrastructure supporting a large portfolio of blockchains around the world. BridgeTower has boldy built a team of technology experts shaping the backbone of Web 3.0 and the future of decentralized finance. | | | | | | [![logo_chainlayer_2-1](https://blog.lido.fi/content/images/2022/01/logo_chainlayer_2-1.png)](https://www.chainlayer.io/?ref=blog.lido.fi) | | ChainLayer operates some of the most successful proof of stake networks in the world. We maintain the highest possible standards to achieve healthy consensus and fast, secure, and accurate oracle data. We are very excited to join the Lido node operator set. | | | | | | [![Codefi-Staking-logo--cropped--1](https://blog.lido.fi/content/images/2022/01/Codefi-Staking-logo--cropped--1.png)](https://consensys.net/codefi/?ref=blog.lido.fi) | | Codefi Staking is an institutional ETH staking platform that enables crypto funds, exchanges, and family offices to achieve optimized staking rewards. Codefi Staking is powered by ConsenSys, the engineering and infrastructure leader at the forefront of the Ethereum blockchain ecosystem.Lido is a significant player within the Eth2 ecosystem. We are thrilled to partner with Lido to support decentralized retail staking alongside our institutional offering, and further contribute to Ethereum protocol development. | | | | | | [![HashQuark-1](https://blog.lido.fi/content/images/2022/01/HashQuark-1.png)](https://www.hashquark.io/?ref=blog.lido.fi) | | HashQuark is one of Asia's largest staking service providers that runs over 50 nodes including Ethereum, Polakadot, Solana, and more! It is a product under HashKey Group, a strategic partner of Wanxiang Blockchain Labs & Wanxiang Holdings — a top 500 company in China. It provides blockchain services through various wallet types (hot, cold, multisig), cross public & private cloud deployment, and a 24/7 security team. It is backed by Qiming Venture Partners which is known as an early investor of Xiaomi and TikTok creator ByteDance.So excited to join Lido. The move by HashQuark has truly demonstrated our shared goal for providing secure and high-quality staking service to clients in a collaborative manner. | | | | | | [![Infstones-sm](https://blog.lido.fi/content/images/2022/01/Infstones-sm.jpg)](https://infstones.com/?ref=blog.lido.fi) | | Founded in 2018 with offices across three countries and two continents, InfStones is the world's leading blockchain infrastructure provider. InfStones team is dedicated to bringing down the barriers to connecting with the blockchain, allowing clients to quickly build their applications on a large variety of blockchain networks. Currently, InfStones provides services to institutional clients around the globe, supporting tens of thousands of nodes on more than 50 major blockchains.InfStones is proud to join Lido as an Operator to contribute to the network's security. We believe Lido is an essential part of the ETH 2.0 ecosystem as it allows the network to achieve a high staking rate while providing otherwise illiquid staked assets to be utilized within the ecosystem. We look forward to contributing more to the Lido ecosystem beyond ETH 2.0! | | | | | | [![Simply-VC@4x-1](https://blog.lido.fi/content/images/2022/01/Simply-VC@4x-1.png)](https://simply-vc.com.mt/?ref=blog.lido.fi) | | Simply VC is a blockchain service provider operating out of Malta, comprising of various teams. The Simply Staking team within the group operates validators on 28 Proof of Stake networks, provides support to both startups and major Web3 players, and powers DeFi as a Chainlink oracle node operator across most EVM chains. We believe that decentralised public infrastructure requires a set of independent, geographically distributed validators operating their own private infrastructure. To this end, the group operates infrastructure out of its own Tier 3 datacentre, with various backup sites across the globe, and a policy against the use of cloud providers.We are proud to be onboarding onto Lido Ethereum protocol, bringing years of blockchain experience, reliability, and jurisdictional and infrastructural diversity, with the overarching goal of further decentralising and securing the existing node operator pool. | | | | | | [![stakely_io--1--1](https://blog.lido.fi/content/images/2022/01/stakely_io--1--1.png)](https://stakely.io/?ref=blog.lido.fi) | | Stakely is a professional non-custodial staking platform established as a new generation of node operators for blockchains of the Web3 ecosystem operating nodes in highly-secure cloud environments with a 24/7 monitoring and alerting system. Stakely has been designed to be highly intuitive and easy to use, as well as its tools. The intuitive interface, projects' documentation, and tutorials allow users to stake easily, allowing them to understand how assets are delegated, and breaking the traditional scheme by educating them while they stake. Therefore, this confirms its commitment to trust and transparency, promoting the mass adoption of the crypto and blockchain ecosystem. The values mentioned above are shared by Lido, both of which are committed to making staking easier and insuring users maximize profits from their stakes. | | | | | | [![stakin-horizontal-color-2](https://blog.lido.fi/content/images/2022/01/stakin-horizontal-color-2.png)](https://stakin.com/home?ref=blog.lido.fi) | | Stakin is a non-custodial infrastructure provider for Proof-of-Stake blockchains. Stakin serves institutional crypto players, foundations, custodians, exchanges as well as a large community of individual token holders. The company provides services on 30+ blockchain networks including Ethereum, Cosmos, Solana, Polygon, Polkadot, Near and more.We are very excited to join the Lido Ethereum node operator set alongside leading blockchain infrastructure providers. We believe that decentralized staking pools such as Lido are an important building block in ensuring the long-term decentralization of Ethereum. We look forward to educating the community on the benefits of liquid staking, and to contributing to Lido’s decentralization and success. | ### Future Onboardings Given the growth of the Lido protocol on Ethereum, we anticipate that another onboarding round will take place some time in Q2 2022\. Stay tuned for news in the near future regarding onboardings for our Solana and Terra operator sets! ### Guide: Staking Solana (SOL) With Lido URL: https://blog.lido.fi/staking-solana-with-lido/ Last updated: 2023-09-22T13:31:34.000Z ### Earn rewards on your SOL in just a few clicks with Lido. Lido lets you effortlessly stake your [Solana (SOL)](https://lido.fi/solana?ref=blog.lido.fi) to earn daily staking rewards sent straight to your wallet. Stake any amount - and unstake any time - to earn rewards on your SOL while contributing to the security and decentralisation of the Solana network. StakeSOL with Lido on [solana.lido.fi](https://solana.lido.fi/?ref=blog.lido.fi) 🏝 ### Summary - Stake your SOL with Lido to earn 5% APY in rewards. - Stake any amount of SOL - no minimum or maximum. - Receive daily staking rewards and watch your balance grow with stSOL. - Stake directly from your Phantom, SolFlare or your preferred Solana wallet. ### What is Lido Lido is a liquid staking protocol for Proof-of-Stake (PoS) networks. When staking with Lido you receive a *liquid staking token* in return, in this case stSOL. This token allows you to earn daily staking rewards on your Solana whilst taking part in the many, many opportunities available across the Solana DeFi ecosystem - from farming on Orca to collateralization on Raydium. Too many options across Solana? Not sure whether to stake or put your tokens to use on another protocol? Use Lido to do both. Our goal with Lido is to let you do both. Take part in the essential task of staking - securing and strengthening the underlying network - whilst putting your tokens to work in the growing DeFi space to maximise your rewards. ### How to stake SOL with Lido 1. Go to [solana.lido.fi](https://solana.lido.fi/?ref=blog.lido.fi). 2. Connect your Solana wallet. 3. Choose the amount of SOL to stake. 4. Press ‘Submit’. 5. Approve the transaction using your wallet. ![](https://lh3.googleusercontent.com/CZlHKbWiofiudcocam5iTF73J7B4GKhM-q0YV5czF6y1TlQ9Ob-GDAHgcp90XvNQX1JUjN8CibPb1zqsIsoSSYaOkO3PhkAkUMLKreJBnSpTgAK08n0Y30PsTdmLLzgIRmFwwBRWUkUNSefWfw) ### Using your stSOL across the Solana DeFi space There are a number of ways to put your staked SOL (stSOL) to work across the Solana DeFi space to maximise your yield. ![](https://lh6.googleusercontent.com/SS5Tqk1LgRZi2yRQMTkwB0NWZ8T6q4sw0LoQhk67eMvGqLxkii7pcJNTezoqPiAo_wdIn7XWr7VYYXjldSRSYsXl7gb6mhe0kwdje95S_39ju3jQPjyaPBGdxQeWydq2OLyggJO-Al7RotOT7Q) Visit [solana.lido.fi/defi](https://solana.lido.fi/defi?ref=blog.lido.fi) for an overview of all the exciting opportunities. ### Frequently Asked Questions **How long does it take to stake SOL with Lido?** Less than a minute! Follow the instructions outlined above to start earning rewards in just a few clicks. **Is my staked Solana locked with Lido?** Not at all - with Lido you can unstake any time with no waiting or unbonding periods. **How often do I earn rewards with Lido?** Daily! Every 24 hours the price of your stSOL will increase to reflect earned staking rewards. **Which wallets can I use to stake SOL with Lido?** More or less any! Use your Phantom, Solflare. Ledger, Solong, Sollet and more to start staking with Lido. **Are there any fees?** Yes **\-** Lido takes a 10% cut on earned rewards. ### For more information, check out ​​[docs.solana.lido.fi/staking](https://docs.solana.lido.fi/staking/overview?ref=blog.lido.fi). ### Lido Adopts stETH/USD Chainlink Price Feed to Expand stETH Adoption Across DeFi URL: https://blog.lido.fi/lido-adopts-steth-usd-chainlink-price-feed/ Last updated: 2023-01-30T14:52:56.000Z [Lido](https://lido.fi/?ref=blog.lido.fi) is excited to announce that we are now sponsoring the first in a series of [Chainlink Price Feeds](http://data.chain.link/?ref=blog.lido.fi) to enable DeFi protocols across leading blockchains to quickly and securely support Lido staked assets. With the [stETH/USD Price Feed](https://data.chain.link/ethereum/mainnet/crypto-usd/steth-usd?ref=blog.lido.fi) live on Ethereum mainnet, DeFi projects can now reference this Chainlink oracle contract at any time to get the current price of stETH when executing key on-chain functions. In fact, the stETH/USD Chainlink Price Feed is already being collectively used and sponsored by a decentralized community of users, [including Aave, Compound, and Enzyme](https://data.chain.link/ethereum/mainnet/crypto-usd/steth-usd?ref=blog.lido.fi). The result of our ongoing work with Chainlink is an expansion in the utility of stETH, as users can earn the normal staking rewards from Lido while also deploying stETH as collateral in DeFi. It also makes it very easy for new DeFi protocols to add support for stETH, given they have immediate access to a secure and reliable oracle solution. We plan to expand our support of Chainlink Price Feeds in the future to aid in multiple platform initiatives, including decentralized price oracles for bLUNA, stSOL, and the assets of new blockchains that Lido plans to support such as Polkadot, Avalanche, and Matic. We selected Chainlink as it’s the most time-tested decentralized oracle network in the industry, demonstrating verifiable reliability across multiple blockchains during the most extreme network congestion and market volatility. Not only do Chainlink Price Feeds supply real-time price data with wide market coverage, but it's a blockchain agnostic oracle solution, which will be critical to aiding in our multi-chain expansion. Lido is an industry-leading liquid staking protocol that allows users to stake [Ethereum](https://stake.lido.fi/?ref=blog.lido.fi) (ETH), [Solana](https://solana.lido.fi/?ref=blog.lido.fi) (SOL) and [Terra](https://terra.lido.fi/?ref=blog.lido.fi) (LUNA) and receive staked liquidity tokens in return at a 1-to-1 ratio. Staked liquidity tokens allow holders to earn staking rewards while also deploying their staked assets within a wide range of DeFi protocols such as money markets and rewards farming programs. Lido is fully DAO-operated and transparent, and currently supports staking for ETH, LUNA, and SOL. stETH tokens represent a share of the total pool of staked ETH, which Lido automatically delegates to validators on the Ethereum network. When these delegations accrue rewards on their stake, the total ETH under management grows, increasing the value of stETH tokens for holders. Users can simply hold stETH for rewards, trade their stETH on the open market, or redeem it at any time for a proportional amount of ETH. One of the main value propositions of Lido besides democratizing access to staking rewards is increasing the utility of staked assets without sacrificing the underlying cryptoeconomic security those staked assets bring to blockchains and various other protocols. While DEXs can easily support staked assets like stETH, there is a whole subset of DeFi applications like money markets that need access to real-time prices of the staked assets. Hence, why we have sponsored the stETH/USD Chainlink Price Feed and will follow with support for stSOL, bLUNA, and more. ![](https://lh6.googleusercontent.com/nTLT1YBxMnu48hGo1XNAm6zD5iYKGk6MYknJmILXmII1_BTSI4TC5rRHjqStUE5ju_EFQh4nVScBL3egnnl3JDK79IY7VGUZc18WI-eS-Y8kV002AMv_J9aNVkUwUjinSRIj6Nxn) We decided to sponsor Chainlink Price Feeds because of their specific optimizations for: - **High-Quality Data** — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned from outliers and suspicious volumes. Chainlink’s data aggregation model helps generate precise global market prices that are resistant to API downtime, flash crash outliers, and data manipulation attacks like flash loans. - **Secure Node Operators** — Chainlink Price Feeds are secured by independent, security-reviewed, and Sybil-resistant oracle nodes run by leading blockchain DevOps teams, data providers, and traditional enterprises with a strong track record for reliability. - **Decentralized Network** — Chainlink Price Feeds are decentralized at the data source, oracle node, and oracle network levels, generating strong protections against downtime and tampering by either the data provider or the oracle network. - ****Transparency —** Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical performance of node operators and oracle networks, as well as check the real-time prices being offered. “Integrating Chainlink Price Feeds is an important step in supporting the next wave of integrations for Lido’s staked assets, such as within money markets and certain rewards farming apps,” stated Vasiliy Shapovalov, P2P CTO and Lido DAO member . “Chainlink effectively serves as a great enabler for DeFi protocols looking to quickly and securely add support for assets like stETH, removing manual process and mitigating security risks around using unproven oracle solutions.” In addition to Chainlink Price Feeds, we are actively exploring how to automate certain functions of our smart contracts using [Chainlink Keepers](http://keepers.chain.link/?ref=blog.lido.fi), further decentralizing the Lido platform and improving the user experience. Stay tuned for future details! ### Guide: Use Lido's stETH wstETH as Collateral on Maker URL: https://blog.lido.fi/makerdao-integrates-lidos-staked-eth-steth-as-collateral-asset/ Last updated: 2023-09-12T04:37:36.000Z Deploy staked ETH as collateral to borrow assets and maximise staking rewards [MakerDAO](https://makerdao.com/en/?ref=blog.lido.fi), the founding DAO behind the decentralised Dai stablecoin, has successfully integrated [Lido’s](https://lido.fi/?ref=blog.lido.fi) [wstETH](https://help.lido.fi/en/articles/5231836-what-is-wrapped-steth-wsteth?ref=blog.lido.fi) token as a collateral asset on the Maker protocol. The integration allows Maker users to deploy their wstETH as collateral to mint DAI, leverage liquidity positions and maximise their Ethereum staking rewards across the DeFi space. [Lido’s stETH](https://lido.fi/?ref=blog.lido.fi), built on the Ethereum network, lets users earn daily staking rewards on the beacon chain without having to lock up their ETH tokens and maintain staking infrastructure. stETH works as a staking token, distributed to users upon depositing ETH into the Lido staking contracts. Deposited ETH is pooled and staked with a distributed set of experienced node operators handpicked by the Lido DAO. Upon transactions being enabled on the Ethereum beacon chain, stETH can then be redeemed for ETH and accumulated rewards, ultimately letting users earn a return on their tokens. As a staking token, stETH can be freely held, traded and deployed across various DeFi integrations to further strengthen the ecosystem. > “The biggest reason against holding stETH used to be the opportunity cost of not being able to use it in Defi. This changes with the Maker integration, which allows anyone to stake their ETH and use it as collateral in a top Defi protocol at the same time. > > For the future, I am hopeful that other lending protocols like Compound and Aave will follow Maker's lead and create more opportunities for holders of stETH. Maybe even for LPs in the stETH/ETH Curve pool, who knows?" > > \- [Hasu](https://twitter.com/hasufl?ref=blog.lido.fi), Research Collaborator @ [Paradigm](https://www.paradigm.xyz/?ref=blog.lido.fi). The collateralization of stETH on Maker allows users to borrow ETH and take leveraged positions on Ethereum, compounding positions with earned staking rewards. As such, staking rewards work towards paying off margin requirements on any leveraged position. ### What is MakerDAO? [MakerDAO](https://makerdao.com/en/?ref=blog.lido.fi) is a decentralized autonomous organization run and managed by MKR token holders dedicated to bringing stability to the crypto economy. MakerDAO is the project behind Maker Protocol, which issues Dai, the world's first decentralized stablecoin on the Ethereum blockchain. Dai eliminates volatility through an autonomous system of smart contracts, specifically designed to respond to market dynamics. Launched in 2017, the original Dai (now Sai) has successfully maintained a soft peg to the US dollar, which later became the now widely-used multi collateral Dai in November 2019\. With a presence on numerous cryptocurrency exchanges, multiple partnerships with global supply chain companies, and agreements with organizations serving non-government agencies, MakerDAO is unlocking the power of the blockchain to deliver on the promise of economic empowerment today. ### Getting Started To create or manage your wstETH collateral position you can use the UI put together by [**DeFiSaver**](https://app.defisaver.com/makerdao/create-cdp?ref=blog.lido.fi). ![](https://blog.lido.fi/content/images/2021/11/Screenshot-2021-11-01-at-15.14.52.png) DeFiSaver wstETH CDP To track MakerDAO wstETH statistics, including minted Dai, utilisation rate and more, visit [**daistats.com/#/collateral**](https://daistats.com/?ref=blog.lido.fi#/collateral) and find the wstETH section as pictured below. ![](https://blog.lido.fi/content/images/2021/11/Screenshot-2021-11-01-at-15.18.34.png) More comprehensive guides are to be published on the Lido knowledge base in the coming days - stay tuned. ### Resources - **Stake with Lido: [Ethereum](https://stake.lido.fi/?ref=blog.lido.fi) | [Solana](https://solana.lido.fi/?ref=blog.lido.fi) | [Terra](https://app.anchorprotocol.com/bond/mint?ref=blog.lido.fi)** - [**Lido DeFi Ecosystem**](https://lido.fi/lido-ecosystem?ref=blog.lido.fi) - [**Lido Technical Documentation**](https://docs.lido.fi/?ref=blog.lido.fi) - **Social: [Twitter](https://www.twitter.com/lidofinance?ref=blog.lido.fi) | [Telegram](https://www.t.me/lidofinance?ref=blog.lido.fi) | [Discord](https://discord.com/channels/761182643269795850/761182643269795853?ref=blog.lido.fi) | [Youtube](https://www.youtube.com/channel/UC528AlpLCzXvzOz9YyeUD3w?ref=blog.lido.fi)** ### Lido Protocol Upgrade | October 27th, 2021 URL: https://blog.lido.fi/lido-protocol-upgrade/ Last updated: 2023-09-12T04:36:26.000Z Today, the Lido DAO [voted in favor](https://mainnet.lido.fi/?ref=blog.lido.fi#/lido-dao/0x2e59a20f205bb85a89c53f1936454680651e618e/vote/96) of upgrading the core protocol smart contracts. The upgrade includes the following fixes and improvements: - Implement protection from deposit front-running vulnerability ([#357](https://github.com/lidofinance/lido-dao/pull/357?ref=blog.lido.fi), see below). - Allow a node operator to remove their keys in batches ([#358](https://github.com/lidofinance/lido-dao/pull/358?ref=blog.lido.fi)). - Prohibit setting non-zero initial staking limit when adding a node operator ([#360](https://github.com/lidofinance/lido-dao/pull/360?ref=blog.lido.fi)). - Improve compatibility of the emergency funds recovery function with external smart contracts ([ce5e562](https://github.com/lidofinance/lido-dao/commit/ce5e5620aa178911c0efe363e06c3fb28cd2934b?ref=blog.lido.fi)). Together, these upgrades improve the security and consistency of the protocol. The Lido team would like to thank the community for discussing, reviewing and voting for these changes—without you, none of these would be possible. ## Deposit front-running protection Recently, a potential exploit scenario was reported to our bug bounty program on Immunefi allowing a malicious node operator to substitute protocol’s withdrawal credentials (pointing to a smart contract) with the credentials controlled by the operator. You can find more details in [this blog post](https://blog.lido.fi/vulnerability-response-update). Following that, short-term mitigation was installed and the community [started designing and discussing](https://research.lido.fi/t/mitigations-for-deposit-front-running-vulnerability/1239?ref=blog.lido.fi) mid- to long-term solutions. [The mid-term solution](https://github.com/lidofinance/lido-improvement-proposals/blob/develop/LIPS/lip-5.md?ref=blog.lido.fi) that was chosen and implemented involves establishing a Deposit Guardian Council. The Council members are tasked with running an offchain daemon that constantly checks and vets the onchain state. Deposits can only be made by the protocol if the current onchain state has been vetted by at least two-thirds of the committee members—this is enforced by verifying member signatures onchain. Note that users can still submit ETH and mint stETH at any time since all received Ether gets buffered and deposited in batches later. Initially, the council consists of six entities: [stakefish](https://twitter.com/stakefish/status/1452971049889374209?ref=blog.lido.fi), [SkillZ](https://twitter.com/SkillZBlock/status/1452918366960750595?ref=blog.lido.fi), [Blockscape](https://twitter.com/BlockscapeLab/status/1452902878885068803?ref=blog.lido.fi), [Staking Facilities](https://twitter.com/StakingFac/status/1452656210927394818?ref=blog.lido.fi), [P2P Validator](https://twitter.com/P2Pvalidator/status/1452970276480819208?ref=blog.lido.fi), and [Lido dev team](https://twitter.com/LidoFinance/status/1452973085557149709?ref=blog.lido.fi). These have the skills and capacity to operate the daemon and (except the Lido dev team) are among the most staked Lido node operators. Later the committee should be expanded. The better long-term solution would require upgrading the Ethereum consensus layer specification, making the front-running attack entirely impossible on the L1 without involving any trusted committee. This solution is currently being discussed within the Ethereum community. ## What’s next? This is not the last protocol upgrade: the Lido core smart contracts will have to be upgraded several more times in preparation for the Merge and introduction of withdrawals. The team is currently working on the design specifications of the mechanisms involved and will publish them for discussion within the community as soon as initial drafts are ready. Stay tuned for further updates! ### Offline & Slashing Risks: Are Self-Cover Options Enough? URL: https://blog.lido.fi/offline-slashing-risks-are-self-cover-options-enough/ Last updated: 2026-06-24T11:45:48.000Z ## Introduction Previously, Lido purchased slashing insurance from Unslashed Finance. Lido stopped purchasing cover through Unslashed and [voted in favor of exploring self-cover](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/QmWeMuwkLJ3strPAM58kzLaKzbEPrWTLb1VC93ergrYrbv). This post aims to set stage in terms of outlining the landscape of cover options and possible developments. We outline the typical risk scenarios (now, after Altair hardfork, and in the hypothetical future), the amounts of slashings and penalties, and evaluate their impact to understand whether Lido could self-cover the losses. Based on the analysis performed, we find that the most realistic impact is low enough for self-cover to be a viable option, but not low enough to be completely trivial. Additionally, we find that risk can be significantly reduced by non-financial actions, such as promoting validator diversity and operator distribution, as well as putting in place mechanisms to maintain high validation quality standards. ## Offline & Slashing Penalty Overview This section refers to the penalty types, methods to calculate them and could be skipped. To simplify the explanation all formulae presented have been transformed in order to give a general idea of penalty types and sizes. The risk modelling and assessment of analytical results in the other sections were done using the actual methods from the specs. Currently, performing validator duties [includes](https://github.com/ethereum/consensus-specs/blob/dev/specs/phase0/validator.md?ref=blog.lido.fi) proposing blocks and creating attestations. The Altair spec [introduces](https://github.com/ethereum/consensus-specs/blob/dev/specs/altair/validator.md?ref=blog.lido.fi) one more duty: participation in the sync committee that is responsible for signing each block of the canonical chain. While block proposals and the sync committee participations happen infrequently, as there is only one proposer per slot and one sync committee consisting of 512 validators per 256 epochs, attestations should be done once per epoch. Failing to perform these duties properly leads to be penalized and, in case of [slashable actions](https://github.com/ethereum/consensus-specs/blob/dev/specs/phase0/validator.md?ref=blog.lido.fi#how-to-avoid-slashing), being forcefully ejected from the Beacon Chain. Here and further we use 'Phase 0' and 'Altair' as monikers for corresponding Ethereum Proof-of-Stake Consensus Specifications ([Phase 0](https://github.com/ethereum/consensus-specs/tree/dev/specs/phase0?ref=blog.lido.fi), [Altair](https://github.com/ethereum/consensus-specs/tree/dev/specs/altair?ref=blog.lido.fi)). ## Offline Validator A validator being offline misses a block if it was chosen as a proposer, does not participate in attestation and (Altair only) the sync committee. ### Being offline brings 2 penalties (note that there is no penalty for not proposing a block): 1. For missing source-, target-, and head- vote (FFG penalty) during each epoch of being offline. - Phase 0 ![Screenshot-2021-10-11-at-15.13.18-1-](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.13.18-1-.png) - Altair ![Screenshot-2021-10-11-at-15.13.28-1-](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.13.28-1-.png) 1. For non-participation in the sync committee when assigned to one (Altair only) ![Screenshot-2021-10-11-at-15.13.28-1--1](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.13.28-1--1.png) ## Slashed Validator Slashing" is the burning of some amount of validator funds and immediate ejection from the active validator set. In Phase 0, there are two ways in which funds can be slashed: proposer slashing and attester slashing. ([Source](https://github.com/ethereum/consensus-specs/blob/dev/specs/phase0/validator.md?ref=blog.lido.fi#proposer-slashing)) A slashed validator is forced to exit with its balance penalized in each epoch during the period it is on the leaving queue. **Being slashed brings 3 penalties**: 1. In the moment of slashing ![Screenshot-2021-10-11-at-15.17.37-1-](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.17.37-1-.png) 1. Special penalty on half-way exiting - Phase 0 ![Screenshot-2021-10-11-at-15.19.12-1-](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.19.12-1-.png) - Altair ![Screenshot-2021-10-11-at-15.19.17-1-](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.19.17-1-.png) 1. FFG Penalty during the exit process for each epoch - Phase 0 ![Screenshot-2021-10-11-at-15.19.57-1-](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.19.57-1-.png) - Altair ![Screenshot-2021-10-11-at-15.20.02-1-](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.20.02-1-.png) To wrap it up, the total amount of offline penalties depends on the number of offline validators, as well as on duration of being offline and whether a validator was assigned to the sync committee during offline state. The total losses could be reduced in case of timely reaction by the node operator(s). On the contrary, the amount of slashing penalties depends only on the number of slashed validators and once the slashings have happened there is nothing one can do to reduce the losses. Departing from these statements, the next section details the model used for our risk assessment. ## Modelling Risk Events ### Model Building Blocks Currently, Lido is experiencing very rapid growth. In the last 2 months, Lido's deposits on the Beacon Chain have doubled. ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-14.59.20.png) [https://dune.xyz/embeds/126642/250545/bce62d41-f343-4e1d-80df-8065d1ea93e5](https://dune.xyz/embeds/126642/250545/bce62d41-f343-4e1d-80df-8065d1ea93e5?ref=blog.lido.fi) Isolated instances of a small number of validators being offline and/or getting slashed are not of interest in terms of insurance, because the overall impact is very low. The cases considered in this post include large amounts of validators going offline and/or being slashed. The realistic scenarios for such events include hardware damage, software malfunction, or global connectivity issues, as well as a compromised node operator, a malicious node operator, or a major mistake in node operations. ### Basic Scenarios in the Model The basic scenarios reflect the current and future Lido positions. By 'current state' scenario we mean the Beacon Chain state and Lido's position at the moment of writing (October, 2021). Currently, Lido has more than 1.3m Ether staked that equal \~17% of all Bacon Chain deposits, and the 4 largest node operators have 5,265 validators each. For the 'current state' scenario we consider total active validators as 250,000 and, according to the current average effective balance, the total amount of eligible ETH as 7,999,797\. Lido's deposits are calculated using its current market share. The hypothetical 'future state' is modeled against the proposed maximum number of validators that be “awake” at any time, as [proposed](https://ethresear.ch/t/simplified-active-validator-cap-and-rotation-proposal/9022?ref=blog.lido.fi) by Vitalik Buterin (\~2 times more than current number), with Lido's share being 25%, and the 2 largest node operators having 10,000 validators each. **Basic scenarios** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.00.38.png) ## Risk Event Scale **4 basic cases** of large offline/slashing event (in terms of risk event scale) are taken into consideration: - single biggest node operator, 30% validators - single biggest node operator, 100% validators - two biggest node operators, 30% validators (= single biggest node operator, 60%) - two biggest node operators, 100% validators **Risk event scale: basic cases** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.01.22.png) ### Model Basic Assumptions Basic assumptions that were made in the model: - Beacon Chain does not go into the leak mode - offline/slashed validators have equal balances and effective balances - average effective balance and the number of active validators on the Beacon Chain do not change during the offline period (for offline validators) or withdrawals period (for slashed validators) - Lido's slashed validators are the only slashed validators on the Beacon Chain - The average effective balance of Lido's validators is 32 ETH, the average balance of Lido's validators is 33 ETH - For comparison we used 5-year earnings at current rates: assuming a recent daily earning of 10.15 stETH, if we continue to earn this for 5 years we'll get 18,531 ETH ## Offline penalty losses ### Phase 0 Phase 0 spec implies penalties for missing source-, target-, and head- vote (FFG penalty) that are imposed during each epoch of being offline. We suggested that a non-malicious, non-compromised validator shouldn't go down for more than a day, so for the calculation we took the period of 256 epoch (\~27 h). The results are shown below. **Current state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.02.01.png) **Future state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.02.31.png) ### Altair In order to calculate all losses due to offline penalties according to the Altair spec, the number of validators chosen to the sync committee should be defined in addition to the duration of offline period. Similar to Phase 0 spec, we assumed an offline period of 256 epochs. As for the other parameter, we need to understand the probability of being assigned to the committee of 512 validators. Obviously, the greater the number of offline validators is, the higher is the probability: ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.22.03.png) In the tables below one can see the most probable number of validators assigned to a committee and how many cases cover nearly 100% of all outcomes in relation to the total number of offline validators and chosen scenario. **Current state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.02.57.png) **Future state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.03.07.png) Let's illustrate this concept through the case of 5500 offline validators, current state scenario. While validators are chosen to the sync committee randomly, the array of all possible outcomes is \[0, 1, 2, ... 512\] out of 5500 Lido's offline validators. Using the formula above, the most probable number assigned to the sync committee would be 11 out of 5500 (probability \~12,6%) while the array \[0, 1, 2, ... 19\] out of 5500 would cover \~99% of probability. Realistically, this means that in the worst of cases we would face a the sync penalty of 19 validators (if we reduce the confidence interval to 90%, the number of validators will be 15). ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.03.51.png) Thus, possible losses due to sync penalty were calculated on the basis of the max number of validators covering 99% of probability. The offline penalties for Altair spec are shown below. **Current state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.04.20.png) **Future state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.04.30.png) ## Slashing Penalty Losses A validator will be slashed for ([Source](https://benjaminion.xyz/eth2-annotated-spec/phase0/beacon-chain/?ref=blog.lido.fi#is%5Fslashable%5Fattestation%5Fdata)): - signing two conflicting *BeaconBlock*, where conflicting is defined as two distinct blocks within the same slot - signing two conflicting *AttestationData* objects, i.e. two attestations that satisfy , which checks the double vote and surround vote conditions. - double vote: by a voting more than once for the same target epoch - surround vote: the source–target interval of one attestation entirely contains the source–target of a second attestation from the same validator(s). Although possible proposer slashings are capped at maximum of 16, a single attester slashing can be used to slash many misbehaving validators at the same time. Thus, it was assumed that the validators are all slashed in the same block. ### Phase 0 **Current state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.05.14.png) **Future state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.05.20.png) ### Altair **Current state scenario** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.05.56.png) [**Future state scenario**](https://www.notion.so/6674abf06e1e412f8138e66c5d90ed3b?ref=blog.lido.fi) ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.06.04.png) ### Model Python Code You can access the full Python code used in our analysis [here](https://github.com/lidofinance/offline-slashing-risk?ref=blog.lido.fi). ## Risk Scenarios Let's have a look at possible realistic situations that can lead (or have already led) to considered risk events. Again, for the offline penalties, we assess the scale (number of validators offline) and the duration (period of being offline), while for slashing penalties - only scale. It would be appropriate to mention that, since the Beacon Chain has been launched, there have been only 150 slashings (17 for Proposer Violations and 133 for Attestation Violations). ## Offline Validators The chief reasons that our validators may go offline could be connected with hardware damage, software malfunction, or connectivity issues. It seems highly unlikely to get all three at the same time. ### **1\. Hardware Risk** (hardware damage) *Relevant example (datacenter fire): at* [*00:47 on Wednesday, March 10, 2021*](http://travaux.ovh.net/?do=details&id=49484&ref=blog.lido.fi)*, a fire broke out in Strasbourg Datacenter. As a result SBG2 was totally destroyed, SBG1 and SBG3 damaged. SBG4 had no physical impact. There was no restart for SBG1, SBG3 and SBG4.* For this kind of risk event the scale and the duration depend on the extent to which validators are distributed. The other factor that determines the offline damage scope is a good disaster recovery plan. For Lido node operators we assume the following: - min scale/duration: 30% validators offline for 2 hours (well-distributed node operator, no issues with recovery) - max scale/duration - 100% validators offline for 7 days (not-distributed node operator, issues with recovery) ### **Software Risk** (client malfunction) During two periods of 18 epochs each, nearly all Prysm validators were unable to produce new blocks on Friday, April 23, 2021, and on Saturday, April 24, 2021\. This led to a decrease in validator participation and as a result to missed attestation penalties and an opportunity loss on proposal rewards. During this period, over 70% of slots were empty. The case [impact](https://docs.google.com/document/d/1nJr6%5Fbd-UnLBxvhT8lcRYdAZr69QdVQ3zJNUr3LgW-0/edit?ref=blog.lido.fi): - Total loss \~ 25 ETH - Per-validator loss \~ 205000 gwei - 120 person hours in the 30 hours between detection and resolution The scale and the duration of such events largely depend on client implementation (and types of client bugs) and how diversified clients are amongst validators and node operators, the latter being more essential. The problem arose due to a concentration of validators using solely the Prysm client. The impact would have been less heavy if there had been a better distribution of validator client implementations. Client diversity is the cornerstone here. Currently we cannot specify min and max scale/duration for Lido node operators regarding this risk, as Lido's validator client distribution is in the progress of being assessed. We assume the upper limit for a realistic impact as: - Scale/duration - 100% validators offline for 7 day ### Regulatory R**isk** (government takedown) This risk refers to node operators falling under the scope of local or global regulators that could force validators to cease activities. Again, the scale and the duration depend on how validators/node operators are geographically distributed, and associated disaster recovery plans. We assume that a week is enough to migrate validation to some friendly jurisdiction/location. - scale/duration - 100% validators offline for 3 days ## Loss Calculation ### Min risk (single big operator, 30% validators offline for 2 hours) ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.07.45.png) **Max risk (single big operator, 100% validators offline for 7 days)** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.07.53.png) ## Large Slashing Event A validator following the protocol in a correct manner would never intentionally attack the network and therefore get slashed. That said, a non-malicious slashable action can happen due to software or script bugs, operational accidents, or badly configured validation setups. ### Accidental technical issue A redundancy gone wrong: Staked case, Feb 3, 2021\. ([Source](https://blog.staked.us/blog/eth2-post-mortem?ref=blog.lido.fi)) We attempted to scale up the number of beacon nodes to get better performance. While we had tested in our canary environment, the production load that we were trying to alleviate behaved differently, causing our validators to restart more frequently than we'd seen in testing. Because we had disabled the persistence of #1 above, these validators signed a second version of the same blocks: a major issue that led to a slashing event. At the end, the case had very small impact: - 75 Staked-run validators were slashed - Total loss \~ [18 ETH](https://www.theblockcrypto.com/post/93730/eth2-validators-slashed-staked-bug?ref=blog.lido.fi) We assume that for this risk - min scale: up to 300 validators slashed (bug or accident being spotted and fixed in several hours) - max scale/duration - up to 30% validators slashed and 100% validators offline for 7 days (a redundancy gone wrong followed by taking all validators offline to understand and fix what happened) ### Malicious or compromised node operator A node operator can be a subject of hacker attack, can face total key loss or theft, leading to multiple malicious or compromised validators. Assuming the max risk here: - scale - up to 100% validators slashed ### **Losses calculation** - **Min impact (300 validators slashed)** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.09.22.png) - **Medium impact (single big operator, 30% validators slashed, 100% validators offline for 7 days)** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.09.31.png) - **Max risk (single big operator, 100% validators slashed)** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.09.38.png) ## Catastrophic Scenarios We assume that a hypothetical catastrophic future event that could significantly damage node operator activities could be: **Accidental or intentional actions that cause “snowball effect” and end up with risk events presented above on a global scale, such as** - multiple malicious node operators - full scale government takedown The impact is proportional to the number of node operators hit by the event (multiple malicious node operators collusion) up to 100% loss of deposits (e.g. regulatory action shutting down all node operators). **Large offline & slashing event during "leak" mode** The Beacon Chain starts operating in "leak" mode if the last finalised epoch is longer than 4 epochs ago. Despite differences in the penalties calculation mechanism in Phase 0 and Altair, for fully inactive validators the impact is the same: non-participating validators receive an offline penalty that increases linearly with the number of epochs since finalisation. The Altair spec makes inactivity leaks more punitive than the Phase 0 spec. If the Beacon Chain stopped finalising for \~ 18 days, fully inactive validators would lose from 11.8% (Phase 0) to 15.4% (Altair) of their balances. For an offline validator the worst scenario is being sent to exit when its effective balance falls to 16 ETH. This would require either inactivity during a very serious leak (that lasts more than 36 days) or initially low validator's effective balance (that means the validator was systematically punished before). For a slashed validator the worst scenario is being slashed right before a very serious leak that would drop its effective balance up to 60%. Catastrophic events cannot be realistically self-covered. We take such catastrophic scenarios to be extremely unlikely. ## Risk Mitigation The total impact of risk events is largely determined by our preparedness regarding proactive measures and risk planning, as well as risk response in high-stress situations. ### **Self-cover** As we can see from the quick review of possible situations that could end up with losses, irrespective of source (offline penalties or large slashing event) and Beacon Chain spec (Phase 0 and Altair), total losses do not exceed 5 year Lido earnings at current rates. Given that the third-party insurance policy covers any single node operator from no more than 5% slashing, the self-cover alternative seems to be a reasonable alternative. The next steps here could be connected with further discussion on additional actions aimed to shape a financial model for self-insurance (initially discussed [here](https://research.lido.fi/t/should-lido-use-third-party-insurance-providers/757/36?ref=blog.lido.fi)). A non-exhaustive list of mechanisms to reduce the risk for stakers could include: - allocating part of the Lido's earnings to an internal Reserve Fund (some sort of special capital pool), possibly diversifying it into non-staked assets, - implementing staking LDO for a portion of staking rewards as a risk-bearing buffer (LDO staked is slashed first), - implementing staking stETH for a portion of staking rewards as a risk-bearing buffer, essentially implementing a risk tranching mechanism, - allocating a part of the Lido treasury to internal Reserve Fund, and - seeking additional (differently structured) 3rd party risk cover options. ### **Validator diversity** The key concept for risk reduction is diversification. In order to reduce validator risk, node operators and Lido in aggregate should distribute and diversify via: - hardware: having within one node operator multiple on-premise and cloud solutions using different data centers and infrastructure providers, - software: using within one node operator different client implementations, and - meatspace distribution: being geographically distributed, with a preference for locations with stable and clear regulatory outlook. The first step here will be a validator diversity assessment, in order to determine the scale and the probability of risk events Lido may face. ### **Commitment to highest professional standards** This part is more about risk planning. The most essential facets here would be: - clear requirements and procedures for new node operator onboarding in order to keep the target level of node operators quality, - procedures for node operator assessments and self-assessments, - clear requirements and procedures for any validator performance improvements, and - clear procedures for response in case of severe technical issues (e.g. Disaster Recovery Plan). The possible first steps here seem to be as follows: - to brainstorm criteria for node operator excellence, - to develop a check-list for self-assessment (min required for steady validators performance), - to identify (during brainstorming session) possible risk events and develop action plan for those that seem to be of high impact/probability. # Conclusion For both Phase 0 and Altair specs of the Beacon Chain and projected Lido market share, the total losses of either extreme offline penalties or a large slashing event would not exceed 5 year Lido earnings at current rates. The only case that would be not covered with 5 year Lido earnings at current rates is the situation of 20,000 validators slashed (2 big operators, Altair spec) that seems quite a tail risk. The most probable severe outcomes could be: - single not-distributed big operator, 100% validators offline for 7 days - single big operator, 30% validators slashed, 100% validators offline for 7 days due to some client bugs or a redundancy gone wrong followed by taking all validators offline to understand and fix what happened Assuming that currently a single big operator runs 5,000 validators (current state scenario) and future state scenario implies running 10,000 validators, the impact varies from 137 ETH to 216 ETH for the former outcome and from 1,013 ETH to 3,149 ETH for the latter. **Single not-distributed big operator, 100% validators offline for 7 days** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.11.39.png) **Single big operator, 30% validators slashed, 100% validators offline for 7 days** ![](https://blog.lido.fi/content/images/2021/10/Screenshot-2021-10-11-at-15.11.47.png) Considering the third-party insurance policy that covers every single one node operator from no more than 5% slashing, the self-cover alternative would be the reasonable alternative. Besides self-insurance, it seems meaningful to assess and manage validator diversity, develop risk & response planning, and cultivate commitment to the highest professional standards. ## Acknowledgements We would like to thank Vasiliy Shapovalov, Isidoros Passadis, Pintail, Eugene Pshenichniy, Victor Suzdalev, Hasu, and Elias Simos for their valuable comments and suggestions. ### Vulnerability Response Update URL: https://blog.lido.fi/vulnerability-response-update/ Last updated: 2023-01-30T14:51:38.000Z On Oct 5, 2021, a vulnerability was reported via the [Lido bug bounty program](https://immunefi.com/bounty/lido/?ref=blog.lido.fi) on Immunefi by an anonymous whitehat (who later [turned out to be](https://twitter.com/stakewise%5Fio/status/1445475001696620550?ref=blog.lido.fi) Dmitri Tsumak, the founder of StakeWise). The vulnerability could only be exploited by a whitelisted node operator and allowed stealing a small share of user funds. ## Impact and risk At the time of the report, the vulnerability’s potential impact was high as the whole undeposited Ether buffer was at risk (approximately 20k Ether at the moment of disclosure). The risk was proportional to the number of malicious node operators out of the recently added batch of five, about 4k ETH per operator. Potential impact for the protocol going forward given all node operators are compromised had been all future deposits. The risk of the vulnerability being exploited was estimated to be low as it was only exploitable by the Lido node operators who are the DAO-whitelisted actors with reputation and skin in the game. ****Currently, the vulnerability is mitigated and the risk is zero.** A bounty of $100k (which is the current maximum payment of our bug bounty program) is expected to be paid via the next Lido DAO omnibus vote happening on Oct 7-8, 2021. ## Mitigations As a short-term mitigation, Lido DAO voted to temporarily lower staking limits for all node operators to the level of currently staked keys. This effectively prevents any deposits from happening while the team is implementing the mid-term mitigation. This doesn’t stop the protocol or any of the integrations but will lower the yield generated by the further deposits by a fraction of a percent. The list of proposed mid- and long-term mitigations can be found and discussed in [this Lido Research Forum thread](https://research.lido.fi/t/mitigations-for-deposit-front-running-vulnerability/1239?ref=blog.lido.fi). ## Nature of the exploit The exploit is based on the fact that, as per the [Ethereum consensus layer specification](https://github.com/ethereum/consensus-specs/blob/dev/specs/phase0/beacon-chain.md?ref=blog.lido.fi#deposits), the validator public key is associated with the withdrawal credentials (WC) on the first valid deposit that uses the public key. Subsequent deposits will use the WC from the first deposit even if another WC are specified. While this design choice is not an issue for self-stakers, it opens an attack vector for delegated staking, including liquid staking protocols. These protocols, Lido among them, use protocol-controlled WC to ensure only the protocol can withdraw users’ funds. In Lido’s case, WC point to a [smart contract managed by the DAO](https://research.lido.fi/t/withdrawal-credentials-in-lido/795/2?ref=blog.lido.fi). The current Ethereum consensus layer design allows a node operator to associate the validator’s public key with the validator-controlled WC by front-running a deposit transaction sent by a protocol with another deposit transaction specifying the same public key, validator-controlled WC, and 1 ETH amount. The end state is a validator managing 1 ETH of node operators’ funds and 32 ETH of users’ funds, fully controlled and withdrawable by the node operator. The exploit [was initially reported on Ethereum Research Forum](https://ethresear.ch/t/deposit-contract-exploit/6528?ref=blog.lido.fi) a long time ago. The presence of this vulnerability in the Lido codebase is a long-term oversight. ## Timeline (UTC timezone) - Oct 5, 03:32 AM: the vulnerability report submitted to Immunefi. - Oct 5, 03:59 AM: the vulnerability report escalated to the Lido team. - Oct 5, 04:49 AM: the probability of exploit estimated to be low, war room gathering scheduled. - Oct 5, 06:09 AM: the war room gathered. - Oct 5, 07:30 AM: historical protocol activity check finished, verifying that the vulnerability was never exploited previously. - Oct 5, 08:58 AM: the undeposited Ether buffer was flushed to lower the potential impact to single digits of Ether. - Oct 5, 09:20 AM: the short-term mitigation was designed. - Oct 5, 10:14 AM: the fact of vulnerability discovery was announced to the Lido node operators; a verbal confirmation was requested from node operators that they are not going to exploit any vulnerability they might find in the protocol. - Oct 5, 10:36 AM: a list of mid- to long-term mitigations was drafted. - Oct 5, 10:55 AM: the verbal confirmation was received from node operators. - Oct 5, 10:55 AM: the fact of vulnerability discovery was announced to the DAO members; a DAO vote implementing the short-term mitigation was started. - Oct 5, 11:13 AM: the fact of vulnerability discovery was announced to the general public via Twitter, Telegram, and Discord. - Oct 6, 10:55 AM: the DAO vote implementing the short-term mitigation passed and was enacted. - Oct 7, 10:22 AM: greenlight for exploit disclosure was received from all the affected parties. - Oct 7, 01:10 PM: the exploit mechanics and possible mitigations were published to the Lido Research Forum. We want to thank Dmitri Tsumak for discovering and reporting the exploit, as well as Immunefi, StakeWise, and RocketPool teams for validating and escalating it to the Lido team. ## Going forward Despite the short-term mitigation being already in place, the proper long-term mitigation needs to be implemented. Currently, the optimal solution is being discussed by the Lido community, you can follow and participate in this process in [this Lido Research Forum thread](https://research.lido.fi/t/mitigations-for-deposit-front-running-vulnerability/1239?ref=blog.lido.fi). ### Introducing The Ethereum Staking Rewards Dashboard URL: https://blog.lido.fi/ethereum-staking-rewards-dashboard/ Last updated: 2023-09-22T13:31:26.000Z Lido's Ethereum staking rewards dashboard is finally here! Users can now track daily staking rewards for any stETH holder by visiting the dashboard page. To track your rewards, visit: **[stake.lido.fi/rewards](https://stake.lido.fi/rewards?ref=blog.lido.fi).** The dashboard also displays the total amount of stETH earned through staking rewards, as well as the average staking APR. Transfer and staking transactions are also included. Users can also hover their cursor over any number to see more precise information. ### How to use the dashboard 1. Connect your wallet or input an Ethereum address. ENS domain names are also compatible. 2. Ta-da! Your rewards history is calculated. Please note: large stETH holders with many transactions (eg. the Curve stETH-ETH pool) does not display information on the rewards history dashboard, as there are too many transactions to fully calculate. We are currently working on a way to expand the limit. ![](https://blog.lido.fi/content/images/2021/10/image--13-.png) - **Date:** The date of the transaction/reward update. - **Type:** The type of transaction (staking rewards, transfers in/out, staking). - **Ξ Change:** Change in stETH. - **$ Change:** Change in USD (fiat) value. - **APR:** APR at time of transaction. - **Balance:** stETH balance at time of transaction. **Include transfers:** Toggle on to display transfer transactions, toggle off to only display daily staking rewards and staking events. **Historical stETH price:** Toggle on to calculate the stETH price at time of transaction, toggle off to calculate stETH price using the current day price. **Export CSV:** Download a CSV file as a record. The staking rewards dashboard is currently in beta. If you have any issues or any suggestions, please contact us through Telegram or Discord, or alternatively email us at [info@lido.fi](mailto:info@lido.fi). ### Stake with Lido - [**Ethereum**](https://stake.lido.fi/?ref=blog.lido.fi) - [**Solana**](https://solana.lido.fi/?ref=blog.lido.fi) - [**Terra**](https://app.anchorprotocol.com/bond/mint?ref=blog.lido.fi) ### Guide: Using Lido's stETH on 1inch URL: https://blog.lido.fi/lido-1inch-launching-double-rewards-on-1inch-lp-steth-dai-pair/ Last updated: 2023-09-12T04:33:01.000Z Today we are pleased to announce an expansion of the [**Lido stETH liquidity incentive program**](https://research.lido.fi/t/proposal-to-incentivize-new-steth-lp-on-1inch/1033?ref=blog.lido.fi) designed to streamline the liquidity of our staked ETH token. In line with the pools launched earlier on Balancer and Sushi, the main purpose of this new pool incentive are to boost stETH productivity across DeFi, remove blockers for future integrations and allow Lido to get a more sustainable and reliable price feed. You can find the original proposal[ here](https://research.lido.fi/t/proposal-to-incentivize-new-steth-lp-on-1inch/1033?ref=blog.lido.fi). For the first month, a double reward program of 200,000 LDO and 200,000 1INCH tokens will be allocated to LPs on the stETH/DAI pool. The 1inch stETH-DAI program kicks off on September 24th at 11.00 AM CET and will run for a period of 4 weeks. To get started earning rewards, visit **[app.1inch.io](https://app.1inch.io/?ref=blog.lido.fi#/1/dao/farming)**. ### Summary - Provide liquidity in the stETH-DAI pool to earn 1INCH & LDO tokens + pool trading fees. - Benefit from Eth2 staking rewards through exposure to stETH. - Receive rewards in real-time, claimable at any time. - Unstake your pooled tokens at the click of a button. ### Getting Started Users can easily provide pool liquidity on 1inch to improve liquidity and price stability of both DAI and stETH, earning 4 separate rewards in the process. ![](https://blog.lido.fi/content/images/2021/09/image.png) 1. Visit [app.1inch.io/#/1/dao/pools?filter=stETH](https://app.1inch.io/?ref=blog.lido.fi#/1/dao/pools?filter=stETH) and connect your wallet. 2. Search for stETH / DAI using the filter. 3. Select the stETH / DAI pool. 4. Click ‘Provide Liquidity’. 5. Choose the proportion of DAI and stETH you wish to provide. Please note this will automatically be done in a 50/50 split. 6. Choose the quantity of LP tokens to mint. This will be based on the quantity of DAI and stETH you provide. 7. Once you are satisfied with the numbers, press Unlock and unlock both your DAI and stETH tokens. You will need to confirm both of these events using your Ethereum wallet. 8. Once tokens are unlocked, press Provide Liquidity and confirm the transaction using your Ethereum wallet. ## How to contribute to 1inch Liquidity Farms Once the transaction has been completed you will be providing liquidity to the stETH-DAI pool on 1inch, represented by the 1LP-stETH-DAI now in your wallet. These represent your stake in the liquidity pool. Your 1inch LP tokens can be staked across 1inch Farms for the additional rewards outlined above. ![](https://blog.lido.fi/content/images/2021/09/photo_2021-09-24-09.43.33.jpeg) To stake 1inch LP tokens, follow these steps: 1. Visit [app.1inch.io/#/1/dao/farming](https://app.1inch.io/?ref=blog.lido.fi#/1/dao/farming). 2. Navigate to the stETH-DAI farm. 3. Once found, click Deposit. 4. A pop-up window will show up with your 1LP-stETH-DAI balance and an overview of your staked amount and daily/monthly/yearly earnings. 5. Choose the amount of 1LP-stETH-DAI you wish to stake out of your existing balance and press Unlock Token. Confirm the transaction in your Ethereum wallet. 6. Once unlocked, you can now deposit your 1inch LP tokens. Do so by clicking Deposit and confirming the transaction using your Ethereum wallet. ### How to acquire stETH / DAI Users interested in contributing to the 1inch stETH liquidity reward program can purchase stETH and DAI using the 1inch aggregator markets. To do so, visit [app.1inch.io](https://app.1inch.io/?ref=blog.lido.fi)and swap your tokens to DAI, stETH or both. ### Learn More - [What is Lido?](https://blog.lido.fi/introducing-lido/) - [How Lido works](https://blog.lido.fi/how-lido-works/) - [Stake with Lido](https://stake.lido.fi/?ref=blog.lido.fi) - [1inch FAQ](https://help.lido.fi/en/articles/5231733-a-guide-to-1inch?ref=blog.lido.fi) - [Staking with Lido using 1inch](https://help.lido.fi/en/articles/5231733-a-guide-to-1inch?ref=blog.lido.fi) ### Introducing Liquid Staking on Solana URL: https://blog.lido.fi/introducing-liquid-staking-on-solana/ Last updated: 2023-09-22T13:31:11.000Z Lido is pleased to announce the launch of [liquid staking on Solana](https://lido.fi/solana?ref=blog.lido.fi). On April 30th, [a mountain grant proposal ](https://research.lido.fi/t/lido-for-solana-proposal-by-chorus-one/527?ref=blog.lido.fi)by [Chorus One](https://chorus.one/?ref=blog.lido.fi) was proposed to the [Lido governance forums](https://research.lido.fi/?ref=blog.lido.fi) following the creation of [LEGO](https://research.lido.fi/t/project-lido-ecosystem-grants-organization/406?ref=blog.lido.fi) (Lido Ecosystem Grants Organization). This proposal suggested expanding Lido’s liquid staking solution to the Solana blockchain. Solana is one of the fastest blockchains in the world, supporting up to 50,000 TPS and allowing for a low transaction fee environment. Solana DeFi applications have also recently gained over 5 billion dollars in TVL, proving that there is an emerging DeFi market on Solana. After 2 code audits, an extensive peer review, and an [ongoing bug bounty program](https://immunefi.com/bounty/lidoforsolana/?ref=blog.lido.fi), Lido liquid staking is now launched on the Solana mainnet! ### To start staking, head over to [solana.lido.fi](http://solana.lido.fi/?ref=blog.lido.fi). ### Staking SOL with Lido Liquid staking on Solana is built around Lido’s stSOL token, a liquid token variant — similar to stETH — that allows users to passively earn staking rewards without needing to run their own validator infrastructure. stSOL can also be integrated into Solana DeFi platforms to allow for added DeFi use cases (e.g. additional rewards, collateral in lending protocols, etc) whilst allowing stakers to retain their staking rewards. In summary, stSOL lets users: - Earn staking rewards immediately upon depositing, without maintaining complex infrastructure or waiting periods - Unstake at any time by swapping on the secondary market - Stake with a diverse set of the industry’s leading validators - Participate in the emerging Solana DeFi ecosystem whilst continuing to earn staking rewards ### Instant access to staked SOL With Lido, SOL holders can connect their wallet and deposit their tokens into Lido and immediately receive stSOL. stSOL tokens represent a share of the total pool of staked SOL and Lido automatically delegates this staked SOL to validators on the Solana network. When these delegations accrue rewards on their stake, the total SOL under management grows, increasing the value of stSOL tokens for holders. Deposited SOL will be uniformly staked across participating Lido DAO-approved validators. Unlike stETH, stSOL is not a rebase token and rewards will not accrue as new tokens in your wallet. Instead, stakers earn their rewards in the form of appreciated stSOL value (similar to [Lido’s wstETH](https://help.lido.fi/en/articles/5231836-what-is-wrapped-steth-wsteth?ref=blog.lido.fi)). If a staker wants to unstake, they can redeem their stSOL back for SOL. Upon redemption, Lido splits off a stake account taking into consideration the accrued SOL rewards and transfers it to the user. The staker can then unstake those SOL and will receive liquid SOL after the deactivation period (by manually claiming through their wallet), which takes at least one epoch - or roughly 2-3 days. Even so, users can also instantly exchange stSOL for SOL at any time on the open market through the supported liquidity pools, e.g. on [Saber](https://saber.so/?ref=blog.lido.fi) and [Raydium](https://raydium.io/?ref=blog.lido.fi). Check out the [introductory post](https://medium.com/chorus-one/introducing-lido-for-solana-8aa02db8503?ref=blog.lido.fi) from the Chorus One team to learn more. Similar to stETH, stSOL will have a fee mechanism which equally distributes fees between node operators and the Lido treasury. Like stETH, the fee structure will be in control of LDO holders through governance. Initially, governance execution will be controlled via [multisig](https://medium.com/chorus-one/towards-multisig-administration-in-lido-for-solana-342474cac81d?ref=blog.lido.fi) by Lido stakeholders on Solana. Lido applies a 10% fee on earned staking rewards (not staked amount). This amount is split between node operators, the DAO treasury, and Chorus One, the Lido for Solana developers. ### stSOL DeFi integrations The power of liquid staking comes from its ability to combine the benefits of traditional staking - earning rewards on your tokens - and the ability to participate in a variety of DeFi activities to earn additional rewards. This includes lending, farming, collateralising tokens and more, all the while still earning staking rewards and securing the underlying network. ![](https://blog.lido.fi/content/images/2021/09/1200x675--3---8-.png) Initially, stSOL will be integrated into a variety of Solana applications, including Saber, Serum, Raydium, and others, allowing stSOL holders to provide liquidity and farm additional rewards. More information on this will follow in the coming days. ### Supported Wallets Lido for Solana supports the following 5 wallets: 1. Phantom 2. Solflare 3. Ledger 4. Solong 5. Sollet If you want support for some other wallet please reach out on [Telegram](https://t.me/joinchat/Gg9t6lE78Knwbfr0wHwXKA?ref=blog.lido.fi). ### Unstaking guides After the deactivation queue ends, users will need to **manually claim SOL** from their wallet. - Phantom ([https://docs.solana.lido.fi/staking/phantom#step-6-unstaking-and-utlizing-stsol](https://docs.solana.lido.fi/staking/phantom?ref=blog.lido.fi#step-6-unstaking-and-utlizing-stsol)) - Solflare ([https://docs.solana.lido.fi/staking/solflare#step-6-unstaking-and-utlizing-stsol](https://docs.solana.lido.fi/staking/solflare?ref=blog.lido.fi#step-6-unstaking-and-utlizing-stsol)) - Sollet ([https://docs.solana.lido.fi/staking/Sollet#step-6-unstaking-and-utlizing-stsol](https://docs.solana.lido.fi/staking/Sollet?ref=blog.lido.fi#step-6-unstaking-and-utlizing-stsol)) - Solong ([https://docs.solana.lido.fi/staking/solong#step-6-unstaking-and-utlizing-stsol](https://docs.solana.lido.fi/staking/solong?ref=blog.lido.fi#step-6-unstaking-and-utlizing-stsol)) ### What’s Next? We are excited to see new use-cases for the stSOL token on Solana. The goal of Lido is to expand liquid staking to other blockchains as well — such as [Polygon](https://research.lido.fi/t/lido-for-polygon-proposal-by-shard-labs/816?ref=blog.lido.fi) and[ Kusama/Polkadot](https://research.lido.fi/t/updated-lido-kusama-polkadot-ls-by-mixbytes/877?ref=blog.lido.fi) — which will help Lido develop into the leading liquid staking protocol. ### 20.08.2021 Orphaned Blocks in Ethereum Incident Postmortem URL: https://blog.lido.fi/lido-20-08-2021-orphaned-blocks-in-ethereum-incident-postmortem/ Last updated: 2023-01-30T14:50:51.000Z Friday night last week (Aug 20), a misconfiguration within Chorus One’s Lido Ethereum beacon chain setup led to a network-wide drop of participation of about 1% (measured by the so-called attestation rates) on the beacon chain. The issue was fixed within hours of the discovery by the involved teams and minor financial impact did occur. The following post-mortem is primarily written by the Chorus One team and highlights the steps they took and will be taking to avoid further such issues going forward. We want to thank everyone that contributed to identifying the issue and finding a solution. ### Detailed Analysis *A helpful summary of the issue and follow-on discussions can also be found in these Twitter threads by [Ben Edgington](https://twitter.com/benjaminion%5Fxyz/status/1429044820383866896?ref=blog.lido.fi) and [Danny Ryan](https://twitter.com/dannyryan/status/1429108728612089857?ref=blog.lido.fi). A [data-driven analysis](https://twitter.com/shyamsridhar7/status/1430792379590529030?s=28&ref=blog.lido.fi) has also been made by Shyam Sridhar.* Validators on Ethereum consist of two pieces: a beacon chain node and the validator client (a helpful overview of this can be found [here](https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-2.0-client-architecture/?ref=blog.lido.fi)). A beacon chain node can serve multiple validator clients, which is why we are operating 3 beacon chain nodes at Chorus One to service the 4,000 Lido validators we are currently running. The incident on Friday occured because the Lighthouse validator client, which we currently use exclusively, queries beacon nodes in the order in which they are specified in the configuration, rather than a round-robin, or randomised fashion; this is by design, in order to avoid situations where multiple beacon chain nodes queried by a single validator client are not in sync, causing errors and inefficiencies with attestation production. By extension, this helps keep the validator client simple, and less prone to bugs. However, despite us running multiple nodes, having all validator clients configured identically meant that all queries were hitting a single node, which whilst it remained alive, became less responsive, causing a number of attestations and blocks to experience delays in their inclusion on the chain, ultimately leading to some blocks becoming orphaned. The existence of orphaned blocks led to an impact in network-wide attestation rates because of how the beacon chain works. As [explained by Ben](https://twitter.com/benjaminion%5Fxyz/status/1429044828227219458?ref=blog.lido.fi), the orphaned blocks led to overflowing attestations in other blocks due to reduced blockspace, and thus some attestations not being included at all. As a result, other validators on the beacon chain were also slightly penalized. Within hours of the issue being spotted, we were able to adjust our Lighthouse configuration and have been performing flawlessly again since. The detection of this issue was suboptimal and can be traced back to imperfect monitoring around attestations and orphaned blocks. None of the Lighthouse metrics we are monitoring and alerting on showed any issues. We are in the process of adjusting our systems to take these events into account and want to again thank the diligent teams involved in uncovering the issue for their help. ### Conclusion and Next Steps We have updated our validator client configuration to balance queries more evenly between our beacon nodes. In addition, we are working on improving our monitoring and observability setup, especially around alerting based upon on-chain events, and investigating what metrics emitted by clients would have alerted us to Friday’s issue sooner. In the coming weeks, we will be diversifying our node setup to include another client (likely Prysm) to be more resilient to such a type of correlated failure. From a Lido perspective, we currently don’t have just-in-time monitoring for all our clients teams, just a somewhat lagging analytics service. That’s partially by choice (we think that operators shouldn’t rely on a centralized setup for monitoring and must implement it themselves), and partially due to the lack of good technical solutions for just in time analytics. We have greenlit a project to develop robust reporting and analytics on validator performance (see [the relevant LEGO RFP](https://research.lido.fi/t/lego-rfp-lido-validator-dashboard/851/5?ref=blog.lido.fi)), which will aid in the possible identification of similar issues in the future. Additionally, as a part of our journey to [Trustless Staking](https://blog.lido.fi/the-road-to-trustless-ethereum-staking/), we also will start gathering data on various validator metrics that are currently not easily drawn from on-chain data (e.g. client diversity), to enable more holistic risk management and impact analyses for these types of events. One other way to mitigate risks like around correlated failure is getting more node operators in Lido, so that one incident doesn’t impact aggregate Lido operations too much. Such a process is underway [now](https://research.lido.fi/t/announcement-onboarding-for-ethereum-wave-2-and-solana-wave-1-supplemental/836/2?ref=blog.lido.fi). Finally, it is pertinent for us to investigate the question of how a relatively small number of orphaned blocks from a small percentage of the network validators was sufficient to cause the impact we have seen. As a part of this effort, we hope to understand to what extent the network is able to tolerate such misbehaviour, unintentional or otherwise, and whether we are able to propose any changes that could be made at the protocol level to ensure the ongoing stability of the Ethereum beacon chain. ### Guide: Stake ETH with Lido using Ledger URL: https://blog.lido.fi/how-to-stake-ethereum-using-ledger-live/ Last updated: 2024-05-17T13:03:26.000Z Users can now stake their Ethereum with [Lido](https://www.lido.fi/?ref=blog.lido.fi) using [Ledger Live crypto app](https://www.ledger.com/?ref=blog.lido.fi)! Lido is a liquid staking solution that allows stakers to participate with the DeFi ecosystem whilst staking their Ethereum on the beacon chain. This is done through the use of Lido’s stETH token, a liquid variant of staked Ethereum that rebases daily to reflect staking rewards. Users can use their stETH in a variety of [DeFi protocols](https://intercom.help/lido-finance/en/collections/2946727-ethereum-integrations?ref=blog.lido.fi). Ledger wallets are hardware wallets that allow for secure storage of cryptocurrencies. Hardware wallets guarantee a sense of security, mitigating risks associated with other wallets that are vulnerable to malicious attacks. **Do not share your private keys with anyone**. ## How to install Lido through Ledger Live crypto app 1. Open the Ledger Live crypto app. 2. Install the Ethereum app on your device. 3. After installing, select “Add Account” and “Continue”. 4. After synchronizing, select “Add Account” and select “Done”. 5. Go to the “Discover” tab in the Ledger Live crypto app menu (on the left) and install “Lido”. *Steps 1-4 are unnecessary if you already added an Ethereum account.* ## How to stake with Lido 1. Once you are at the Lido staking page in Ledger Live crypto app, input the amount of Ethereum you would like to stake. 2. Select “Submit”. 3. Choose your preferred fees. The lower the fee, the slower the transaction will process. Select “Continue”. 4. Sign the transaction on your Ledger. *Please note, rewards are displayed as daily balance changes, and not as incoming transactions.* ## How to unstake using ParaSwap or Curve ### 1\. Unstaking with ParaSwap 1. Go to the “Discover” tab in the Ledger Live crypto app menu (on the left) and install “ParaSwap”. 2. After installing, open the app. 3. Under “Pay”, change the token to “STETH” by “Importing” the token. 4. Under “Receive”, change the token to “ETH”. 5. Select “Swap” and change the settings to your preference. 6. Select “Confirm Order”. 7. Approve the first transaction. 8. After approving the transaction, a prompt will appear to finalize the transaction. 9. After finalizing, you have successfully swapped stETH to ETH. ### 2\. Unstaking with Curve Finance 1. Head over to the [Curve stETH/ETH pool](https://www.curve.fi/steth/?ref=blog.lido.fi). 2. Connect your wallet. 3. Input the amount of stETH you would like to swap to ETH. 4. Select “Sell”. 5. Approve the first transaction. 6. After approving the transaction, a prompt will appear to finalize the transaction. 7. After finalizing, you have successfully swapped stETH to ETH. ## Moving Forwards We are grateful to Ledger for this integration which allows hardware wallet users to easily and efficiently stake their Ethereum with us in a secure manner, in turn expanding the scope of staking to a greater audience. - [Lido available in Ledger Live crypto app: bringing Ethereum staking within your reach](https://www.ledger.com/blog/lido-available-in-ledger-live-bringing-ethereum-staking-within-your-reach?ref=blog.lido.fi) - [Introducing Lido](https://blog.lido.fi/introducing-lido/) - [How Lido Works](https://blog.lido.fi/how-lido-works/) ### Guide: Using wstETH On SushiSwap URL: https://blog.lido.fi/liquidity-mining-on-sushiswap-via-wsteth-dai-liquidity/ Last updated: 2023-09-12T04:25:25.000Z In light of the [recent proposal](https://research.lido.fi/t/proposal-to-incentivize-two-new-wsteth-liquidity-pools/903?ref=blog.lido.fi), [SushiSwap](http://sushi.com/?ref=blog.lido.fi) has joined forces with Lido to launch their wstETH/DAI liquidity pool with liquidity mining incentives. This recent implementation allows users to have access to more forms of stETH liquidity as well as improving the efficiency and interconnectivity of protocol integrations. [SushiSwap](http://sushi.com/?ref=blog.lido.fi) is an AMM (automated market maker) based decentralised exchange that allows users to swap between various asset classes and also allows liquidity providers to earn fees by providing liquidity to pools. Users can provide [wstETH](https://help.lido.fi/en/articles/5231836-what-is-wrapped-steth-wsteth?ref=blog.lido.fi) (wrapped stETH) as liquidity to the respective pool to earn trading fees and additional incentives. The pool will be allocated **200,000 LDO** for the first month, with up to **13,500 SUSHI** allocated from SushiSwap as well. ### The wstETH/DAI pool is live [here](https://app.sushi.com/add/0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0/0x6B175474E89094C44Da98b954EedeAC495271d0F?ref=blog.lido.fi). ### The wstETH/DAI reward farm is live [here](https://app.sushi.com/farm?filter=2x&ref=blog.lido.fi). ### How to wrap stETH for wstETH Users who hold stETH will need to wrap their stETH to wstETH beforehand to interact with SushiSwap. wstETH is a non-rebasing token that remains stable instead of changing daily to reflect staking rewards - staking rewards are only actualised when wstETH is unwrapped. 1. Head over to [Wrap](https://stake.lido.fi/wrap?ref=blog.lido.fi). 2. Connect your wallet at the top right. 3. Input the amount of stETH you would like to wrap to wstETH. 4. Select “Unlock token to wrap” and approve the transaction. 5. Confirm the final transactions. ### How to provide wstETH liquidity Now that you have wstETH, you can provide it as liquidity to earn liquidity mining rewards and trading fees. 1. Head over to the wstETH/DAI liquidity pool. 2. Select the “+” button. 3. Input the amount of wstETH/DAI which you would like to add to the liquidity pool. 4. Select “Supply”. 5. Select “Confirm Supply”. 6. Approve and confirm the transactions in your Ethereum wallet. ### How to remove wstETH liquidity 1. Visit the wstETH/DAI liquidity pair. 2. Select “- Liquidity”. 3. Input the amount you would like to remove from the liquidity pool. 4. Select “Remove” and confirm the transactions. ### Staking wstETH/DAI pool tokens for liquidity mining rewards After providing wstETH/DAI liquidity to the pool, users will receive an LP token representing their share of the pool. Users will need to stake this token to earn liquidity mining rewards. 1. Visit [Farms](https://app.sushi.com/farm?ref=blog.lido.fi) and find the wstETH/DAI liquidity pool. 2. Select the pool. 3. On the left hand side, Input the amount of tokens you have in your wallet. 4. Select “Stake”. 5. Approve and confirm the transactions. 6. Upon confirmation, you will now start receiving SUSHI and LDO rewards. ### Unstaking wstETH/DAI pool tokens 1. To unstake, visit [Farms](https://app.sushi.com/farm?ref=blog.lido.fi) and find the wstETH/DAI liquidity pool. 2. Select the pool. 3. On the right hand side, input the amount of tokens you would like to unstake. 4. Select “Unstake”. 5. Approve and confirm the transactions. 6. Upon confirmation, you will no longer be receiving SUSHI and LDO rewards. ### Claiming SUSHI + LDO liquidity mining reward More information on the specific reward claiming process will be added here as claiming is enabled. ### Moving Forwards With wstETH now added onto SushiSwap, this allows for more interconnected integrations with other protocols. This also allows for the expansion of stETH liquidity to not originate on only one platform (Curve). We hope to see more integrations in the future to make stETH a staple in the liquid staking ecosystem and to increase the liquidity of stETH. - [Wrapping stETH](https://stake.lido.fi/wrap?ref=blog.lido.fi) - [What is SushiSwap?](https://docs.sushi.com/?ref=blog.lido.fi) - [Liquidity mining on Curve](https://blog.lido.fi/providing-steth-liquidity-via-curve-to-receive-rewards/) ### The Road to Trustless Ethereum Staking URL: https://blog.lido.fi/the-road-to-trustless-ethereum-staking/ Last updated: 2026-08-22T11:42:51.000Z On December 1st, 2020, Ethereum began its transition to proof of stake (PoS) by launching the Beacon Chain. While this allowed users to stake their ETH for the first time, there were still several points of friction: 1. **No unstaking:** Once deposited, stakers cannot withdraw their stake until transfers from the Beacon Chain are enabled. This makes staking a one-way road for many months, if not years, to come. 2. **Illiquidity:** While staking, users cannot move, trade, or use their ETH as collateral in DeFi. This is especially costly as long as they cannot withdraw from the Beacon Chain. 3. **High capital requirement:** Users can only stake in multiples of 32 ETH, excluding users with smaller or uneven balances. 4. **Operational burden:** Although Ethereum core developers made sure that staking has low hardware and uptime requirements, many users prefer to provide the capital and outsource the operational work to a third party. It has long been clear to us that users would want a solution to these problems, and we wouldn’t be the only ones trying to provide it. The first, and most obvious, contender were centralized exchanges. For them, it would be trivial to pool the ETH of their users (solving #3), stake it for them (solving #4), and issue a liquid token that represents their locked stake (solving #1-2). Given how valuable customer acquisition and liquidity are to exchange businesses, they can even offer this service at no additional cost to the user. Fast forward to today, and centralized exchanges are emerging as the early winners of Ethereum staking. Publicly known validators operated by exchanges like Kraken or Binance are among the largest stakers. Less visible exchanges like Coinbase could make up an even larger share of staked ETH. **Breakdown of Ethereum staking services:** ![](https://lh6.googleusercontent.com/ebRa9EA2TNXFmWF2aQ5_Qt3iYs8dA_eJBpeI2BOky7Sah5b8OQ-wnTgSZusfwlvUgjvwYmZvGyP81AC-3Nu58JDIIbKqAcXXOgMpBfXkPCV3T_EALmzgy8KD8wxfkNtIwAr3EqNB) However, exchanges are already among the most significant users of Ethereum; making them the largest block producers could significantly harm Ethereum’s decentralization. For that reason, we believe **decentralized staking pools like Lido** are required to provide a competitive alternative to centralized exchange staking. Why is it so crucial that an Ethereum staking pool is completely trustless? 1. **Central to Ethereum’s security:** As discussed earlier, many users will want to delegate their stake. But since Ethereum does not support in-protocol delegation, it leaves a vacuum for third-party providers to fill. Given how central staking is to Ethereum’s security, a trustless pool is strongly preferable to a trusted or centralized one. 2. **Staking has centralizing forces:** The staking landscape may be more centralized than the mining landscape, supporting fewer, more concentrated winners. That is because a staking pool’s ability to issue a liquid staking tokens like stETH creates a powerful network effect that doesn’t exist in proof of work mining. In this post, we want to explain the thoughts that led to Lido’s current design and how we plan on transitioning Lido to a piece of fully trustless infrastructure. ## Creating a trustless staking pool and token When we launched Lido, it was not possible to create a fully trustless staking pool and token. So we had to choose between a) delaying our launch or b) providing the best possible alternative to exchange staking while minimizing the amount of trust required. Though the second approach required more trust from users, waiting would have ceded the playing field to exchanges who don’t impose the same restrictions on themselves. It’s not clear if trustless staking could have overcome such a big first-mover advantage, making waiting seem like the riskier option to us. As a result, we chose an iterative approach, allowing us to compete with exchange staking and capture market share while continually reducing trust in the system as the possibilities for doing so become available. So, what are the key factors preventing a fully trustless staking product today? Right now, we can identify three main points where users need to trust Lido: 1. **Deposits made before July 15th, 2021 are not non-custodial:** When we launched Lido, it was impossible to set a smart contract as the owner of a beacon chain validator. So the withdrawal credentials of the Lido validators are controlled by a 6-of-11 multisig of [reputable Ethereum builders](https://blog.lido.fi/lido-withdrawal-key-ceremony/). We have since transitioned custody to a smart contract, but this cannot extend to existing deposits yet. 2. **Withdrawals are currently not permissionless**: Because of how withdrawal credentials are designed, Lido validators currently have to unstake manually. As a result, stETH holders cannot force Lido node operators to unstake and must instead trust them to act honestly and not grief. 3. **Becoming a node operator is currently not permissionless:** Only the Lido registry, which [LDO](https://blog.lido.fi/introducing-ldo/) token holders control, can add new node operators today. As a result, stETH users trust that LDO holders will continue to uphold a sensible and well-distributed validator set. Note that withdrawals from the beacon chain are not yet enabled, so nobody—including the 6-of-11 multisig—can withdraw funds from the deposit contract anyway. That also means an stETH holder can currently not claim ETH from the beacon chain, and hence they cannot be griefed. As a result, the first two issues are not exploitable today. But we do include them because they would become issues the moment withdrawals are enabled. ## Removing these trust requirements ### Transitioning custody to a smart contract As discussed before, it was not possible to set a smart contract as the owner of a beacon chain validator when Lido launched. The smart contract withdrawal address format has since been [added to the beacon chain spec](https://github.com/ethereum/eth2.0-specs/pull/2149?ref=blog.lido.fi), and last week we switched[ the withdrawal credentials of new depositors to a smart contract](https://twitter.com/LidoFinance/status/1415609357836988418?ref=blog.lido.fi). To understand why this cannot apply to existing deposits, we need to take a quick detour to understand withdrawal credentials in the beacon chain: 1. As described before, Ethereum staking started with only one type of withdrawal credential, called 0x0\. This allowed only a BLS address type to be the owner of a validator, not even an Ethereum address. 2. In December 2020, the introduction of [0x01](https://github.com/ethereum/eth2.0-specs/pull/2149?ref=blog.lido.fi) allowed Ethereum addresses to own a validator. 3. To switch the withdrawal credentials of an existing validator, one would have to unstake the ETH and then restake it with the new credentials. However, unstaked ETH cannot be restaked until withdrawals are enabled. So to switch from 0x0 to 0x01 today, a [second mechanism](https://ethresear.ch/t/withdrawal-credential-rotation-from-bls-to-eth1/8722?ref=blog.lido.fi) is required, which would allow validators to switch their withdrawal credentials “in-flight.” The smart contract we use for new withdrawals is implemented as a [skeleton upgradeable smart contract](https://etherscan.io/address/0xb9d7934878b5fb9610b3fe8a5e441e8fad7e293f?ref=blog.lido.fi). This is done because we are still missing critical functionality for implementing **remote withdrawals** (i.e., a smart contract triggers a validator to unstake), so we need the option to upgrade when these are introduced. The upgrade to smart contract withdrawal credentials happened on July 15, 2021\. **Any new deposits made after that are fully non-custodial.** ### Forcing a validator to unstake remotely If a user wanted to unstake today (which doesn’t make sense since the ETH can neither be withdrawn nor restaked), Lido would have to issue a message to the validator. That validator then has to unstake manually, allowing them to grief or even extort Lido. To mitigate this, we have been onboarding new node operators in a permissioned manner so far. Optimally, we would completely solve the problem by allowing stETH holders **to trigger a withdrawal from the beacon chain remotely**. Recently, Ethereum researchers have made a [new proposal](https://ethresear.ch/t/0x03-withdrawal-credentials-simple-eth1-triggerable-withdrawals/10021?ref=blog.lido.fi) that would enable the delegator to force their delegate to unstake. Temporarily labeled 0x03, this could be either implemented as an independent credential or as an amendment to 0x01 once beacon chain withdrawals become enabled. The proposal works by introducing a new “canonical” Exit Contract on Ethereum (like the Deposit contract). The 0x03 withdrawal credentials owner would specify any validator with the matching withdrawal credentials. Then the Beacon Chain would trigger a “[voluntary exit](https://github.com/ethereum/eth2.0-specs/blob/378d167ee03a4017b53dc54cac15a99ea4392313/specs/phase0/beacon-chain.md?ref=blog.lido.fi#voluntaryexit)” for that validator as part of the beacon chain state transition function. This means that the validator is remotely unstaked. ### Opening up the registry As we saw, the custody and griefing attack vector have straightforward technical solutions. Fortunately, they are also the most important problems, and solving them are the top two priorities for making Lido more trustless for stakers. That leaves us with the question of who is allowed to be a node operator for Lido. This is a more complex problem, where the solution space is not nearly as straightforward. **First, why does Lido need to control who can be a node operator?** A core part of Lido’s value proposition is **liquid staking**, so the issuance of stETH against a user’s deposit. In a naive implementation, tokens issued against different validators should trade at different market prices because they vary in performance and reliability. However, the resulting tokens wouldn’t be fungible against each other, making it much harder to build liquidity for them. Instead, Lido users get issued the same fungible stETH token from their deposit, allowing exchanges, lending markets, etc., to adopt it. This fungibility, while highly desirable, creates a new problem of its own: it requires us to **socialize the performance and slashing-risk of bad validators across all stETH holders** instead of just the holder of the individual validator’s token. For example, if one validator gets slashed, all stETH holders lose a little bit of performance, instead of one token holder losing a lot. In a world with non-fungible staking tokens, users would have to incentive to stake with the best node operators because their quality would reflect directly in the value of their staking tokens. In other words, **the market would perform quality control on who gets to stake**. But in a world where the token is fungible, Lido has to **ensure that only qualified stakers receive delegation**. This central “quality control” of stakers is a non-trivial problem. We present a non-exhaustive list of possible solutions: **Central registry + off-chain reputation**: The simplest solution is to allow only top node operators with a proven track record and legal recourse, who can be voted in by LDO governance. This describes the current solution, but it may give governance too much power over Ethereum. This would be the case if the network effect of stETH got so strong that people use it even if a different provider would be better for Ethereum’s decentralization. **Staker-curated registries:** A more decentralized and value-aligned solution would be to make stakers choose the sets of node operators. That is a non-trivial problem, as the stake is liquid, and, by definition, stakers don’t have to live with the long-term consequences of their actions. However, if solved, it would allow for a permissionless protocol strongly aligned with stakers’ interests. **Bonding**: One approach other blockchains like Tezos and other staking pools like Rocket Pool use requires a bond from validators. For example, in Rocket Pool, validators have to stake alongside their delegator. In a 1-to-1 bonded system, there’s effectively no slashing risk for the customer because the system would also slash the validator’s bond first. However, as we have seen many times across crypto history, capital efficiency matters a lot, and bonded solutions often come to market later, scale more poorly, and are more expensive for holders than unbonded ones. It stands to reason that the same dynamics will apply to the staking market. Even worse, they give a considerable advantage to custodial liquid staking solutions (e.g., exchanges) that can freely use other people’s tokens for bonding. **Secret Shared Validators:** One way to increase the system’s fault tolerance without hurting its performance is via a new proposal pioneered by the Ethereum Foundation, called Secret Shared Validators (SSV). An SSV splits an individual validator into a multisig controlled by different entities. These entities would then produce blocks together by first coming to consensus via an off-chain voting protocol. While coming at the cost of higher communication overhead, a single validator could no longer cause any faults on their own because instead of controlling one validator, they might control 10% of 10 validators. A strategic commitment to researching SSVs is currently [discussed in the Lido forum](https://research.lido.fi/t/lego-strategic-commitment-to-research-of-ssvs-blox-staking-obol/817?ref=blog.lido.fi). **Tracking validator performance**: Another low-hanging fruit could be to track the in-protocol performance of validators and use that information to allocate ETH inside the system. As a first step, the beacon chain would need to expose validator statistics (e.g., uptime) so that the staking pool smart contract can calculate the performance on-chain. This could be used in several ways. For example, node operators with better performance could have a higher chance of getting allocated new ETH that comes into the system than worse validators. Further, when somebody wants to unstake their ETH, the system could remove the worst-performing validators instead of a random one. **Insurance:** Lido could again outsource the quality control over validators to the market, e.g., by having a public insurance system. This would effectively be a prediction market where Lido pays rewards for predicting what validators will have the best monthly performance. **Node operator score**: To reiterate, Lido needs to impose quality control on who gets to be a node operator. Still, it wants to do it in a way that requires no centralized control from LDO governors or anyone else. The optimal solution could combine many of the above ideas into one validator scoring system. Whenever new ETH is queued for staking, higher-scoring node operators would have a higher chance of receiving the ETH than lower-scoring ones, up to a safe limit. Low scoring node operators could also be punished first when ETH is withdrawn, or even be removed from the system entirely if they fall below a minimum threshold. Every new node operator coming into the system could start with a 0 score, implying low trust and a small chance to receive delegation. Node operators could then collect points by performing various trust-inducing actions, such as: - being part of a many-person SSV. - bonding some of their own ETH. - having insurance staked on them. - and primarily, showing a good validator performance over time. (These are only some indicative ways to score a node operator. More/better options may exist.) Anyone can become a node operator in a system like that, but they would have to display similar qualities as they would have in a market where users choose their delegate. As a node operator builds a good track record over time, they could reduce other costs like insurance or SSV overhead. It would also create an incentive to perform as well as possible because it leads to being rewarded with more stake. Whatever the optimal solution is, Lido is committed to finding and implementing it to the best of our abilities. ## Summary **We believe the winning Ethereum staking pool will be a maximally decentralized and immutable protocol, and this is the optimal end state for Lido.** We also believe that waiting for Ethereum to be 100% compatible with such solutions will effectively forfeit the market to centralized actors who don’t impose similar constraints on themselves. As a result, the best path to provide a trustless alternative is through iterative change that adopts the best possible practice at the time. We are on track to making Lido fully non-custodial and trustless for stETH holders. Our two top priorities have clear technical solutions that we’re working on with Ethereum developers or waiting to deploy when it’s possible to do so. Trustless entry for node operators is a more complicated problem to solve. Still, we will explore the solutions above as well as others we haven’t thought about to reduce Lido's reliance on governance as much as possible. **We’re committed to continuing to iterate quickly and reduce trust surfaces required in the Lido system as solutions become viable. We’re proud to have offered a better alternative to centralized exchange staking and led the way to build fully decentralized, trustless staking.** ### Signed: [**Hasu**](https://twitter.com/hasufl?ref=blog.lido.fi)**,** [**Georgios**](https://twitter.com/gakonst?ref=blog.lido.fi)**,** [**Konstantin**](https://twitter.com/Lomashuk?ref=blog.lido.fi)**,** [**Vasiliy**](https://twitter.com/%5Fvshapovalov?ref=blog.lido.fi)**,** [**Isidoros**](https://twitter.com/IsdrsP?ref=blog.lido.fi)**,** [**Arjun**](https://twitter.com/arjunblj?ref=blog.lido.fi)**,** [**Jordan**](http://twitter.com/cryptocobain?ref=blog.lido.fi) ### Guide: Adding wstETH liquidity using Bancor URL: https://blog.lido.fi/adding-wsteth-liquidity-using-bancor/ Last updated: 2023-09-12T04:22:17.000Z [Bancor](https://bancor.network/?ref=blog.lido.fi) is a trading platform that allows LPs to stake their assets as liquidity in order to earn trading fees. This [recent integration](https://vote.bancor.network/?ref=blog.lido.fi#/bancornetwork.eth/proposal/QmVqkZET4Sef5Xj9ahRXNkM7sAkBNg6pfL77VBAgh4fFgf) with Bancor v2 allows wstETH (wrapped stETH) to be staked single-sided to earn trading fees with the added benefit of impermanent loss protection. Bancor also allows users to stake single-sided its native token, BNT, to pair against their liquidity pools. Bancor uses Lido's wstETH - a wrapped version of Lido's stETH which does not rebase on a daily basis. Instead, your daily staking rewards will be realised once you unwrap your tokens back to stETH. **Please** **note**: Wrapped stETH still earns daily staking rewards, but will not be viewable until you choose to unwrap. Users are protected from impermanent loss by 1% per day, meaning that **once 100 days have passed**, users are totally protected from any impermanent loss that they might have incurred once withdrawing. Withdrawals prior to the 100 day requisite are only partially protected/compensated. **There is no impermanent loss protection entitled to LPs if they withdraw their liquidity within the first 30 days**. To view the wstETH pool on Bancor, [**click here**](https://app.bancor.network/eth/portfolio/stake/add/single/0xB2607CB158bc222DD687e4D794c607B5ce983Ce2?ref=blog.lido.fi). ## Adding wstETH liquidity to Bancor ![](https://lh5.googleusercontent.com/wWo-OS8v2pbjTlsTdCL4vkJBMBgSvzVryacdU6Iw1tCa1_Grfhgy8LE_0nXQUvLuZq6hhuf5s6NN0ieudmCflImtGw2NFsJnK0wRTagCT28KvssQUH57O8mmL1Av8shpeYhs94BS) 1\. Visit [Bancor](http://app.bancor.network/eth/data?ref=blog.lido.fi) and navigate to the wstETH/BNT pool. 2\. Under ‘Actions’, click the ‘+’ symbol to add liquidity. 3\. Choose the token you want to stake. You can choose between wstETH and BNT. 4\. Choose the amount you want to stake. As Bancor lets you add single-sided liquidity - allowing you to choose which specific token you want to add - the space available may be limited as your deposit must be matched on the other side. If there is insufficient space in a pool, you have three options: - Provide BNT to open up space. - Wait until another user provides BNT to open space. - Work with Bancor governance to increase the pool's BNT co-investment limit. 5\. Input the amount to stake and press ‘Stake and Protect’. 6\. If this is your first time using Bancor, you will need to approve token spending. A pop up will appear - press ‘Unlimited Approval’ and confirm using your wallet of choice. 7\. Once confirmed, you will be providing wstETH liquidity to Bancor and you will start to earn trading fees. ## Tracking your stake on Bancor ![](https://lh5.googleusercontent.com/YUMF1rSSDGS9XTa0jMsMh94qd9Wr_akLelB-JECxN3tqdnBKWTJ0ALCwcUrYMWh8RunjnIubp6sB2-Z_v0S6hojMak6aIVq2LmvO2gTGZ-hjHa2lwYmesUWn9dlJC7VNuezdT36b) 1\. Visit [Portfolio](https://app.bancor.network/eth/portfolio?ref=blog.lido.fi) to track your staked amounts and all earnings. 2\. My stake: - ****Protected value:** The value of your position(s) assuming 100% IL (impermanent loss) protection. - ****Claimable value:** The value of your position(s) if you were to withdraw right now (assuming you have not earned full IL protection and there has been IL, this value will be lower than Protected Value). - ****Total fees:** Total fees and earnings since entering the pool. 3\. My protected positions: - ****Pool:** The liquidity pool you are providing for (in this case, wstETH). - ****Initial stake:** The initial amount of wstETH you have staked. - ****Protected:** Amount of tokens you can withdraw with 100% protection + fees. - ****Claimable:** Amount of tokens you can withdraw right now (assuming you have not earned full protection, this value will be lower than Protected Value). Full IL protection is achieved after 100 days. - ****Fees & rewards:** Fees and rewards earned by your stake since you entered the pool. Rewards will be earned in BNT if the pool has BNT incentives, otherwise trading fees are earned in wstETH. - ****ROI:** The ROI (return on investment) of your fully protected value vs. your initial stake. - ****APR:** Your annual percentage rate, displayed by D (daily) and W (weekly). - ****Current coverage:** The impermanent loss protection you have accrued. Impermanent loss protection starts 30 days after your deposit, at a rate of 30% and gradually increases 1% per day until you reach 100% protection. - **Rewards**: The amount of BNT tokens that you have earned for providing liquidity to a pool granted that there is a BNT incentive for that respective pool. Note that BNT Rewards only come into the picture if the Bancor DAO incentivizes the pool. wstETH LPs will only earn trading fees in wstETH. ## Unstaking your wstETH liquidity on Bancor 1. To unstake, click the arrow on the far right of the ‘My Protected Positions’ overview. 2. Choose the percentage of your staked amount which you would like to withdraw. 3. Press ‘continue’ and confirm the transaction using your Ethereum wallet. 4. Your previously staked funds will now appear in your Ethereum wallet. ![](https://lh6.googleusercontent.com/LOrQFqqR1CPTSBej93CKg-pyKDxS3VoHoQ68YNXxI4AUUCjOkYc40c8BAOAmIGdEAsfx1fTXPqtfSLPctm0CEN3pMhONpIeDrQWUm_YhqvJwhDFSWHk6cKYWRaafe2ofH4pVkmkP) ## Converting your stETH to wstETH You can wrap/unwrap your stETH tokens using [**stake.lido.fi/wrap**](http://stake.lido.fi/wrap?ref=blog.lido.fi). Simply connect your wallet, unlock your stETH tokens and press Wrap. You can also choose to convert your ETH to wstETH directly. To do this, select ETH on the token drop down. This allows you to save on gas compared to swapping from ETH to stETH to wstETH. For more information on wrapped stETH (wstETH), visit [help.lido.fi/en/collections/2947347-wrapped-steth-wsteth](https://help.lido.fi/en/collections/2947347-wrapped-steth-wsteth?ref=blog.lido.fi). ## Additional Information - [Guide: How to Stake Liquidity in Bancor Pools](https://blog.bancor.network/how-to-stake-liquidity-earn-fees-on-bancor-bff8369274a1?ref=blog.lido.fi) - [Bancor Network FAQ](https://docs.bancor.network/faqs?ref=blog.lido.fi) - [Bancor Staking For Dummies](https://blog.bancor.network/bancor-v2-1-staking-for-defi-dummies-f104a6a8281e?ref=blog.lido.fi) - [Adding Single-Sided Liquidity](https://docs.bancor.network/about-bancor-network/faqs/single-side-liquidity?ref=blog.lido.fi) ### Withdrawal Credentials in Lido URL: https://blog.lido.fi/withdrawal-credentials-in-lido/ Last updated: 2023-01-30T14:49:56.000Z Currently, withdrawal credentials in Lido are a 6/11 threshold signature where individual key shards are held by notable members of the Ethereum community. All ether deposited to beacon chain up to this point (slightly more than 600k) is using these credentials and is under the risk of collusion between 6 out of these 11 signatories. This Thursday Lido will vote to upgrade withdrawal credentials to an upgradeable smart contract. All the further deposits after the successful vote will use a smart contract address as withdrawal credentials, meaning that for new ETH in system threshold signature collusion is no longer a risk. Between the 20th and 27th of July, we will run a threshold signature drill to make sure the respective key shards remain accessible. When Ethereum introduces withdrawal credentials rotation capabilities, or withdrawals - whichever comes first - the threshold signature will be rotated to the smart contract withdrawal address as well. ## **Current state** The first set of withdrawal credentials - 6/11 threshold signature were generated during a ceremony that took place between December 13th and 16th, 2020, performed by a group of the industry’s trusted builders. Chorus One, Staking Facilities, Certus One, Argent, Banteg (yearn.finance), Alex Svanevik (Nansen), Anton Bukov (1inch), Michael Egorov (Curve/Nucypher), Rune Christensen (MakerDAO), Will Harborne (DeversiFi) and Mustafa Al-Bassam (Celestia) came together over a four-day event to generate threshold signatures for Lido’s withdrawal keys in a secure environment on air-gapped machines. All ether deposited from Lido to beacon chain to this day (more than 600k) is using these credentials. If 6 out 11 of these builders collude, they will eventually be able to steal the funds or hold Lido hostage. If 6 out of them lose their shards of a key, the ether will be stuck forever (akin to [what](https://stakehound.com/blog-post/fireblocks-eth-2-key-management-incident/?ref=blog.lido.fi) [happened](https://www.fireblocks.com/blog/stakehound-eth-2-0-event/?ref=blog.lido.fi) to Stakehound’s Ether). Thankfully, the DKG ceremony was designed in a way where the only thing that has to be backed up is a seed phrase, and every OG in the space has a good experience with storing seed phrases. Every participant had verbally confirmed they’ve got their secret share backed up. Even then, this is obviously not a sustainable situation. Lido’s ready to start changing it. ## **Withdrawal credential rotation** Lido DAO is going to change **withdrawal credentials (WC)** so that they point to an upgradeable smart contract instead of a BLS key. This will allow for more decentralization as withdrawal logic will be controlled by LDO holders via DAO voting instead of withdrawals being initiated by holders of BLS key parts. The smart contract in question is a simple no-function upgradeable smart contract that uses OpenZeppelin code for upgradeability and is recently audited. The change is going to take place on the week of **12.07–19.07.2021**. **1)** On **Monday, Jul 12:** New WC are generated and published. Node operators will validate them and make sure they are able to generate a new chunk of deposit data using the new WC. **2)** On **Wednesday, Jul 14**: An onchain vote for WC change is started. **3)** On **Thursday, Jul 15**: The vote for WC change is executed. All validator keys that are not used by that moment are pruned from the protocol. Node operators submit new **deposit data till 3:00 PM UTC.** Then an on-chain vote is started for raising validator key limits for those node operators that have submitted new deposit data on this day. **4)** On **Friday, Jul 16** 4:00 PM UTC: The vote for raising validator key limits is executed and buffered Ether is deposited using the new deposit data. After that, all new deposits will happen with the smart contract as withdrawal credentials, but it won’t change the situation for 600-something thousands of ether already deposited. ## **Threshold withdrawal credentials drill** Between the 20th and 27th of July, we will run a threshold signature drill to make sure the respective key shards remain accessible. 8 out of our 11 key shard holders are available this week, and this is enough to check we still have the ability to sign withdrawal or key rotation messages when the time comes. This drill was scheduled for June, but we had to postpone due to the fact we underestimated the difficulty of making modifications to the threshold signature software that would allow running the drill. Instructions for the drill will be published during the next week. We will have to run a second drill when the rest of the key shard holders will make themselves available to make sure nobody lost their shard (probably sometime in August). ## **Further steps** When withdrawals are available or a withdrawal credential rotation mechanism is introduced (e.g. like in this [proposal](https://ethresear.ch/t/simple-withdrawal-credentials-rotation/9555/9?ref=blog.lido.fi) or a number of alternative ones), Lido will be able to rotate the threshold withdrawal credentials to smart contract withdrawal credentials, getting rid of this particular risk altogether. ### Guide: Use stETH as Collateral With Inverse Finance URL: https://blog.lido.fi/inverse-finance-adds-steth/ Last updated: 2023-09-12T04:19:47.000Z [Inverse Finance](https://inverse.finance/?ref=blog.lido.fi) has added support for [Lido](https://lido.fi/?ref=blog.lido.fi)'s staked ETH (stETH) 🏝️ This guide brings you an overview of Inverse Finance, Anchor and how you can deploy your stETH as collateral to borrow assets. ### Summary - What is Inverse Finance - What is Anchor - How to deposit stETH into Anchor - How to borrow assets - How to repay loans to withdraw collateral - How to get stETH ### What is Inverse Finance? This week, Inverse Finance passed a [governance proposal](https://inverse.finance/vote?ref=blog.lido.fi) to list Lido's stETH on Anchor. Anchor is the second money-market protocol to list stETH, making it possible to lend and borrow against your stETH. Because stETH grows in value through staking rewards, it means you can borrow against an asset that is earning staking rewards! Inverse.finance is a suite of permissionless decentralized finance tools governed by the **Inverse DAO,** a decentralized autonomous organization running on the Ethereum blockchain. Their main products are **Anchor**, **DOLA** and **DCA Vaults.** Inverse.finance is governed and run by its community of token holders (numbering over 2000 holders) and elected delegates. ### What is Anchor? [Anchor](https://inverse.finance/banking?ref=blog.lido.fi) is a money-market protocol similar to Maker, Compound and Synthetix, but one that facilitates capital efficient lending & borrowing via the issuance of synthetic tokens (eg. DOLA) & non-synthetic credit (eg. borrowing tokens such as ETH). *Those familiar with Lido's integration with Terra/Luna should not be confused with Anchor Protocol. Inverse Finance's Anchor is a separate entity from Terra/Luna's Anchor Protocol.* Anchor launched on the 25th of February, 2021. **The Anchor System Overview:** - **DOLA -** the first tokenized synthetic asset issued by Anchor. - **Banking** \- the Anchor money market. - **Stabilizer** \- mint & burn DOLA for Dai at 1:1 price. - **Liquidity Pools** (Curve & Uniswap) - for DOLA liquidity & stability. From a capital-efficient money market, to tokenized synthetic assets, legacy finance is about to be invaded. ### How to deposit stETH into Anchor When supplying stETH as collateral into Anchor, users will be able to borrow assets based on their stETH up to a 60% collateralization ratio. ![](https://blog.lido.fi/content/images/2021/06/inve.png) 1. Visit Inverse Finance [Banking](https://inverse.finance/banking?ref=blog.lido.fi) 2. Connect your wallet by selecting "Connect Wallet" at the top right of your screen 3. Connect using [MetaMask](https://metamask.io/?ref=blog.lido.fi) or WalletConnect if you are using a Mobile wallet like [Argent](https://www.argent.xyz/?ref=blog.lido.fi) or [Rainbow](https://rainbow.me/?ref=blog.lido.fi) wallet. 4. Find stETH under the "Supply Market". Select it and input the desired amount of stETH you would like to supply to Anchor. 5. Once you approve the transaction, you will see your deposit under the "Supplied" column. When supplying assets as collateral in Anchor, users will be able to borrow assets, and depending on the asset, they may also earn INV rewards. This is highlighted under "Rewards APY", the INV rewards you are entitled to. stETH is currently not receiving any INV rewards, but this can potentially change in the near future. Users can claim these INV rewards on the Banking page. Select the "Claim" button, and confirm the transactions. **INV rewards do not currently apply to stETH but may in the future.** ### How to borrow assets Now that you have supplied stETH as collateral, you are free to borrow a loan. When borrowing assets, you must pay interest, embodied in the "Rate" percentage under "Borrow Market". ![](https://blog.lido.fi/content/images/2021/06/inve--1-.png) **When borrowing assets, users must be weary of their collateral ratio in order to not get liquidated. Liquidations force suppliers to lose their collateral in order to pay back their outstanding debt. If you intend to borrow assets from Anchor, please refer to this document addressing Anchor liquidations before you do so!** 1. Select one of the assets you would like to borrow under the "Borrow Market". 2. Input the amount you would like to borrow, respective of the amount you supplied as collateral. If you have deposited collateral, you will the see maximum amount you can borrow of an asset under "Max Available to Borrow". You can borrow up to a maximum 60% of your deposited collateral, which equates to a 180% collateralization ratio. 3. Select "Borrow". 4. Finalize the transactions. ### How to repay loans to withdraw collateral To withdraw collateral, users must pay back their loans along with the interest owed. ![](https://blog.lido.fi/content/images/2021/06/Untitled--1-.png) 1. Select the asset you need to repay your loan for. 2. Select "Repay" to the right of "Borrow". 3. Input the amount you would like to repay. 4. Select "Repay" or alternatively, select "Repay All" and confirm the transactions to erase your debt. You can now withdraw your initial collateral. Select "stETH" under "Supply Market". 5. Select "Withdraw" to the right of "Supply". 6. Input the amount you would like to withdraw, or alternatively, select "Withdraw All". 7. Confirm the transactions to claim your staked collateral. ### How to get stETH token You can find a guide on how to stake ETH for stETH [here](https://blog.lido.fi/staking-ethereum-with-lido/). You can also purchase stETH through [Curve](https://curve.fi/steth/?ref=blog.lido.fi) by swapping ETH for stETH with minimal slippage. ### What’s to come? There are many plans for stETH to be used in a variety of DeFi protocols in the future such as other lending protocols, farming strategy protocols, aggregators, and many more to come. These are outlined in more detail here: - [Lido for Aave](https://research.lido.fi/t/lido-for-aave-proposal-by-delphi-digital/671/1?ref=blog.lido.fi). - [Lido stETH Uniswap V3 Pool](https://research.lido.fi/t/lego-lido-steth-uniswap-v3-pool/509?ref=blog.lido.fi). We highly encourage users to submit their proposals on the [Lido forums](https://research.lido.fi/?ref=blog.lido.fi) to share their ideas to the community. ### Resources - [What is Lido?](https://blog.lido.fi/introducing-lido/) - [What is Inverse Finance?](https://docs.inverse.finance/?ref=blog.lido.fi) - [How Lido Works](https://blog.lido.fi/how-lido-works/) ### Lido Open DeFi Hackathon - Round Up URL: https://blog.lido.fi/lido-open-defi-hackathon-round-up/ Last updated: 2022-10-24T09:35:09.000Z As part of our vision, we are pleased to support open-source developments to further the growth of the Ethereum space. We recently did this through contributing to the [Open DeFi Hackathon](https://gitcoin.co/hackathon/open-defi/??ref=blog.lido.fi) by Gitcoin. The focus of this hackathon was to support the DefF dev environment and to facilitate the use and composability of liquid staking tokens across the DeFi space. Before we announce the winners, we at Lido want to take a moment to thank everyone that contributed to the hackathon. If it wasn't for your contributions to a more open financial system we would be forever relegated to an opaque banking system. Your contributions are invaluable and we thank you all for your participation. Now onto the hackathon winners. ## First Challenge: Off-Chain Storage & Management For Lido Validators' Keys For the first challenge, the 3000 LDO prize goes to Tom! The challenge required taking a big part of the data Lido currently stores in smart contracts off-chain whilst retaining strong security properties of the system. Tom created a way to reduce the ETH transaction costs required for adding/using signing. The general idea is that the public keys submitted by node operators are repeatedly hashed to calculate a merkle root which is then stored within the *NodeOperator* struct - reducing the storage usage to a single slot per node operator. Congrats Tom![ ](https://github.com/lidofinance/lido-dao/pull/347?ref=blog.lido.fi) - **Prize: [gitcoin.co/issue/lidofinance/lido-dao/341/100025666](https://gitcoin.co/issue/lidofinance/lido-dao/341/100025666?ref=blog.lido.fi)** - **Tom’s code: [github.com/lidofinance/lido-dao/pull/347](https://github.com/lidofinance/lido-dao/pull/347?ref=blog.lido.fi)** ## Second Challenge: Yieldspace-Inspired AMM For StETH/ETH Pairs For our second challenge, There were no valid submissions to win the full prize; however, 0xSolidityGuy will receive a small amount from the OpenDeFi Challenge prize pool for his work on a Yieldspace-Inspired AMM For StETH/ETH pairs. Congrats 0xSolidityGuy! - **Prize: [gitcoin.co/issue/lidofinance/lido-dao/342/100025667](https://gitcoin.co/issue/lidofinance/lido-dao/342/100025667?ref=blog.lido.fi)** - **0xSolidityGuy’s proposal: [github.com/0xSolidityGuy/Generalized-AMM](https://github.com/0xSolidityGuy/Generalized-AMM?ref=blog.lido.fi)** ## Third challenge: OpenDeFi For our third challenge, it was open-ended with up to ten prizes totaling 10,000 LDO. As we all know, some of the biggest innovations happen when people are free to build whatever they want. This challenge was for anything related to DeFi, liquid staking and Lido! - [Prize: https://gitcoin.co/issue/lidofinance/lido-dao/343/100025668](https://gitcoin.co/issue/lidofinance/lido-dao/343/100025668?ref=blog.lido.fi) ### 1st place goes to Dodecane! Dodecane created the Occultix Protocol. The Occultix protocol provides highly flexible instant loans on stETH that repay themselves over time. Basically Alchemix, but for Lido's stETH. How cool is that?[ ](https://github.com/Dodecane/lido-occultix?ref=blog.lido.fi) ![](https://lh6.googleusercontent.com/GNHPK8s5D1avtwGqdq_RUgSqy3u26g-oBX75zffXsmZ66TYgtKybV6h31YpOa48LQimSF0-7EJJgEe_FAs4E-8vKXnCcyY14zU5ecHEEQfMT4hPPBY2UwQK_Vw-2qC44Gij-9h_o) - **Dodecane’s repo: [github.com/Dodecane/lido-occultix](https://github.com/Dodecane/lido-occultix?ref=blog.lido.fi)** ### Second place goes to Ankitiitb! Ankitiitb created an interface on top the wstETH/ETH Uniswap V3 pool, to swap stETH for ETH or vice versa. - **Repo: [github.com/ankitiitb1069/WstethZap](https://github.com/ankitiitb1069/WstethZap?ref=blog.lido.fi)** ### Third place goes to Shota-masuda-onibakuchi! Shota created a contract that takes fungible tokens (like wstETH) and generates a unique NFT. The intent is to encourage the use of stETH/wstETH. - **Shota’s repo:** [github.com/shota-masuda-onibakuchi/on-chain-nft](https://github.com/shota-masuda-onibakuchi/on-chain-nft?ref=blog.lido.fi) ### Fourth-fifth place goes to Masaun! Masaun built a smart contract that can utilize Lido's stETH as a yield source of PoolTogether. Currently, several interest-bearing tokens such as Compound Token (e.g. cDAI, xSushi, AAVE Tokens (e.g. aDAI) are used as yield sources in PoolTogether. Masaun's repo is an integration between Lido's stETH and PoolTogether's yield source interface. It's not a fully finished work, but merits a prize anyway! - Masaun’s repo: [github.com/masaun/lido-stETH-as-yield-source](https://github.com/masaun/lido-stETH-as-yield-source?ref=blog.lido.fi) ![](https://lh5.googleusercontent.com/QwHqk-jwfaoQU3BSuP_Fmb1MohAitPC-njk5wsB4ZrWqRsK7svn1qcymaQ6pa2NotClUNxc8lG_QNp9HSJLQpe9APa-CovrfDQQehlsZcXrPEO_27bMCMXoyb4BEuJWnCl1CI40r) ### Sixth-tenth place goes to 0xkarl! 0xkarl is working on a contract that creates a PoolTogether yield source for Lido ETH2 staking daily rewards. It uses 1inch to swap wETH to native ETH, then deposit ETH into Lido. Then uses Curve to swap stETH back to native ETH as a workaround for disabled stETH withdrawals. It's not finished work, otherwise, it'd be higher up the ladder! - **0xKarl’s repo**: **[github.com/0xkarl/lido-pooltogether](https://github.com/0xkarl/lido-pooltogether?ref=blog.lido.fi)** ### Sixth-tenth place goes to Tanish! Tanish contributed to the off-chain storage & Management challenge. - **Tanish’s repo: [github.com/tanishqjasoria/LIDO-off-chain-storage](https://github.com/tanishqjasoria/LIDO-off-chain-storage?ref=blog.lido.fi)** All of the prizes will be sent out within the week. Here at Lido, we think liquid decentralized staking solutions are an important piece of infrastructure in the Ethereum ecosystem and we’d love to build it with you. **If you’d like to help build Lido, please email [info@lido.fi](mailto:info@lido.fi), or join the Lido [Discord](https://discord.com/invite/vgdPfhZ?ref=blog.lido.fi).** ### A Look At stETH Liquidity URL: https://blog.lido.fi/concerning-steth-liquidity/ Last updated: 2023-09-12T04:17:04.000Z ### TLDR: Financial protocols need stETH to be liquid to be accepted as quality collateral. When beacon chain withdrawals are enabled, stETH's liquidity is ensured by the fact it's possible to unstake and withdraw it with a slight delay. Right now it's not the case, but stETH is very liquid because the liquidity is incentivized. The incentives will keep on being provided at least until the Merge and withdrawals are enabled, which is expected to happen in less than a year. Even without incentives, there's some credible desire to a) MM with stETH b) do a time-based arbitrage for stETH. It's very hard to predict what that desire would be organically (incentives add a lot of noise to the market data) but different ad-hoc mental models for the market all converge on significant support at a 5-25% discount. ### How liquid is stETH? To be good collateral (e.g. for Maker or AAVE), an asset needs to be liquid. When beacon chain withdrawals are enabled and stETH is in its final form, its liquidity is ensured by the fact that a user can unstake stETH and get ETH in return. It's not a fast process - from [27 hours to months](https://notes.ethereum.org/@hww/lifecycle?ref=blog.lido.fi#4311-Initiate-exit) depending on how crowded is beacon chain exit queue. But it enables a time-based arbitrage strategy, where an arbitrager buys stETH with ETH cheaper than 1 to 1 and withdraws ETH with rewards to themselves. That will ensure significant demand for stETH when it's discounted, and the larger the discount - the larger the demand. In that setting stETH is almost as liquid as ETH itself; potentially it can be even more liquid. Beacon chain withdrawals are not enabled now and will not be enabled [for quite some time](https://barnabe.substack.com/p/eth2), though: Q1 2022 is the earliest realistic option. Until that happens, stETH is a more risky asset. Time-based arbitrage is still possible, but not over a period of days - it'll be a yet unknown number of months until withdrawals are enabled. There's not a lot of [trading activity going on with stETH so far](https://curve.fi/combinedstats?ref=blog.lido.fi), so trading fees are pretty small. Market making on stETH (including providing liquidity on Curve) at this point is somewhat risky and not all that rewarding. Still, the stETH:ETH pair is [the biggest pool](https://curve.fi/steth?ref=blog.lido.fi) on Curve with over $1.5b in liquidity, which makes stETH one of the most liquid tokens in crypto. You need to trade 175000 ETH to stETH or vice versa (more than $200m) to move the price 2%. The reason for that is that the pool is incentivized. There are CRV rewards and LDO rewards that people who are providing liquidity for a stETH:ETH pool can receive by staking their LP shares in the Curve gauge. Lido is incentivizing the pool by monthly governance decisions: e.g. this month 0.375% of total LDO supply, which amounts to $9m or over 3500 ETH at the time of writing, [was allocated](https://research.lido.fi/t/curve-proposal-continue-ldo-reward-initiative-with-3-750-000-ldo-0-375/602?ref=blog.lido.fi) to the gauge. Lido has been gradually reducing the allocation to incentivize the Curve pool in LDO terms (from 5m LDO for the first 3 months to 4800k to 3750k on the last one) but [it is committed to incentivizing the pool](https://research.lido.fi/t/proposal-continue-curve-steth-ldo-liquidity-scheme/251?ref=blog.lido.fi) for at least 8 more months, and for a good reason that will stay valid until the withdrawals are enabled. Lido's got a lot of undistributed LDO in its treasury and it stands to reason the rewards on stETH:ETH liquidity will continue for quite some time. stETH's liquidity is arguably the most important feature of that liquid staking token. That pool is also incentivized by the CRV token, which is allocated weekly to gauge according to [Curve governance](https://dao.curve.fi/gaugeweight?ref=blog.lido.fi). That part of rewards is historically secondary to LDO rewards. There is a negative correlation between a farm's risk and a farm's APR. The incentivized pool (as perceived by the market, at least), the more crowded it gets until APR gets at parity with other options of similar risk. Current ETH:stETH pool APR is around 11 to 13%. Historically the rewards were much higher compared to the pool size (around 40% APR territory for quite some time) but with overall DeFI rewards going lower with time and growing confidence in Lido as the liquid staking solution. Even without incentives (which Lido is committed to continuing for a long time), there's some credible desire to a) MM with stETH b) do a time-based arbitrage for stETH. There's no hard data on what that desire would be organically (incentives add a lot of noise to what can be seen in a wild) but there are some reasonable models to gauge what that demand and that support could be. ### Monetsupply's risk-return model Monetsupply made an article on [stETH as a treasury building block](https://medium.com/tally-blog/treasury-building-blocks-steth-c9073beb843e?ref=blog.lido.fi). The model boils down to comparing stETH to a bond with an uncertain maturity rate and pricing it like a bond. --- *Let’s give an example:* - *stETH is earning 8% per year in validator rewards* - *An equivalently risky ETH investment is expected to earn 10% per year* - *ETH2 upgrade is expected to be live in 1 year* - *stETH value in 1 year = 1.08 ETH ETH alternative value in 1 year = 1.1 ETH stETH discount = 1.8%* *In these circumstances, we’d expect the fair market value of stETH to settle around 1.8% below face value (roughly 1.08 divided by 1.1). Any widening in the interest rate spread between stETH and ETH in defi will lead to an increasing price discount. This also applies to changes in users’ perception of risk, which is expressed via higher expected rewards.* *Unlike most other bonds, stETH has an uncertain future redemption date — this depends on when the ETH2 upgrade is ready. Taking the same example above, but assuming an additional 6 month delay to the merge, we can see that longer duration also leads to a larger price discount.* - *stETH value in 18 months = 1.122 ETH* - *ETH alternative value in 18 months = 1.154* - *ETH stETH discount = 2.7%* stETH risk is difficult to evaluate, but it's presumably lower than many productive ETH kinds of product. *stETH has traded very close to par value for its entire history. This makes sense when we look at the factors above — generally, stETH earns a much higher rewards than comparably risky ETH investments, which has led to consistent inflows that close any price discounts. And while stETH is sensitive to shifting duration, this means that the potential for price discounts should drop steadily as the expected merge date draws closer.* --- Monetsupply doesn't give an estimate of what's the fair risk/reward assessment but says it's less risky than the reward implies. From there follows that the similarly thinking market participant would have an incentive to buy stETH at 100-X% where X is in single digits. In a Twitter thread on the same topic there is a different estimate: > my intuition says no - i think a 65% liquidation ratio would be more appropriate > > this accommodates for up to \~21% price discount > > assuming 1 year to merge, this adds \~26% to stETH expected returns, which should be more than enough to incentivize buyers during a market downturn > > — monetsupply.eth (@MonetSupply) [May 13, 2021](https://twitter.com/MonetSupply/status/1392939840535097347?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) In a personal conversation monetsupply confirmed that the difference comes from the former number being a "fair-weather" one, and the latter is an "all hells break loose" estimation - when it's down to liquidations, and the market's in turmoil, and ETH is congested, and all liquidity in AMMs had been dried up, that's where the stETH discount looks juicy enough to participate anyway. ### Implied APR model At the moment market participants (including sophisticated, professional players) are farming stETH:ETH Curve pool with $1.7B to get about \~10% APR in exchange. That implies that 10% APR on ETH is an acceptable reward ratio for them given the stETH risk + Curve risk. If we expect the merge and withdrawals to happen within a year, another way to get this 10% APR on ETH with a similar level of risk would be to buy stETH with a discount of (10% - expected staking APR). Expected staking APR is hard to gauge, but it should be within the 3-7% range. Current farming sentiment implies there would be a price floor around 0.93-0.97 ETH/stETH, below which $1.5B of liquidity considers buying stETH a good trade. And that price floor only goes up with ETH2 merge development going forward. Market sentiment, of course, is a fickle thing: what can change is: 1. perception of stETH risk 2. perception of ETH price risk 3. perception of an acceptable risk-reward ratio for ETH I think 3 will only go down with time, at least long term: DeFi APRs are slowly going down since last summer, as DeFi matures and there are fewer opportunities and more experienced participants in the market. Short-term fluctuations, as we had in March with sETH:ETH Curve pool briefly having 50% APR, and Vesper's lucrative liquidity mining program, are still possible. To account for 1 and 2, it'd be prudent to have some margin on what is an enticing discount on stETH to attract buyers. ### What we can learn from the past When the question is "how will Lido liquidity fare if there are no incentives", there's not a lot to speculate upon in the past, given Lido always had a lucrative liquidity mining program, and other ETH2 liquid staking tokens are just not that big to extrapolate freely. I'll provide a few graphs and factoids, and make my own conclusions from them. I'm not adamant about these conclusions, because the incentives make the input data noisy. First graph combines stETH price, the amount of staked ETH in Lido, and an "adjusted" amount that takes into account an imbalance in stETH:ETH pool on Curve (essentially considering stETH removal from the pool as a kind of "unstaking"). ![](https://blog.lido.fi/content/images/2021/05/Screenshot-2021-05-26-at-19.03.12.png) https://duneanalytics.com/embeds/51588/102008/cefca506-17bd-4ff7-a5d4-5066cf56d3ab Here you can see: 1. The outflow of the pool in late February and March'21 when LDO price tanked, reducing APR, sETH pool on Curve's gauge rewards were voted to high heavens by CRV whales, and Vesper had a low-risk high-APR liquidity mining program. Most of the ETH removed from the pool at that time was moved to these two farms. 2. People buying stETH, in one case pretty aggressively, when its price is below 0.96 ETH. 3. The effects of increasing A parameter in Curve in May'21 on stETH price. 4. Recent bloodbath has had some effect on pool imbalance (almost all of it was one big depositor removing stETH and using part of it to improve their loan's health ratio in Compound). AnkrETH price chart: ![](https://blog.lido.fi/content/images/2021/05/image.png) AnkrETH is the second-largest liquid staking token for ETH with a 7.5% market share (compared to Lido's 67%). Its liquidity is slightly incentivized for the most part of its lifecycle, with an exception of 20-ish January to 20-ish February when it was incentivized very heavily. Current incentives are around 8% APR. You can see that the absolute discount it had was at its worst less than 20%, and in recent months it's holding steadily between 0.89 and 0.985. What I can gather from this data is that: 1. People in stETH:ETH pool are mostly steady ETH holders (almost no pool exits in the bloodbath times, most exits are for better APR or to lever up on Maker). They are unfazed by the ETH price risk. 2. The "fair" APR people want to have on their ETH now is around 10%, and it's going lower steadily. Discounts below 10% are getting bought in fair weather. 3. Especially good opportunities for ETH farming can skewer the price support. 4. It'd be prudent to have stETH liquidation auctions to run slow, because if the automated arbitrage fails (it shouldn't, but a robust financial system can't be built on "shouldn't") the decision to bulk buy at support will be a meatspace investment decision, and these are slow. ### Will this reasoning hold in the future? Absolutely not. There will be a major shift in stETH possible usage, available instruments, and the market demographics. So far most of the stETH holders are sophisticated whale farmers and protocols. Where we're headed stETH will be used by traders as a unit of account, DAO treasuries, hedge funds, retail - which will change the market demographics a lot. More complex instruments on top of stETH - lending, leveraged trading, leveraged staking, options and futures, both DeFi and CeFi kind, will allow for much more sophisticated strategies. What's almost certain is that more integrations for stETH mean more organic trading activity for it, consequently - more organic liquidity. How that would impact price stability, though, is an open question. ### Conclusion The overall conclusion is that Lido is committed to incentivizing the liquidity for a long time; but in the imaginary timeline it doesn't, there still is a good amount of liquidity on discounted levels of stETH:ETH pair. ### To integrate stETH in your protocol, check out [docs.lido.fi](http://docs.lido.fi/?ref=blog.lido.fi) and the [Lido Ecosystem Grants Organization](https://research.lido.fi/t/lego-proposal-members-open-initiatives-cont/476?ref=blog.lido.fi). ### Lido Development Update / 3 Months of Lido / Lido hits $786.2m in TVL URL: https://blog.lido.fi/lido-development-update-3-months-of-lido/ Last updated: 2026-08-22T11:42:44.000Z March was an exciting month for Lido driven largely by the launch of liquid staking on Terra in collaboration with the Terra/Anchor team. This launch signalled the expansion of Lido from an omni-chain liquid staking platform to a multi-chain protocol, paving the way for further chain expansions moving forward. On the DAO side we have been working on the optimisation of processes surrounding the onboarding of new validators - both for Terra and Ethereum - and establishing a system of deploying grants to encourag e community developments. More on this to be shared in the coming days. With integrations our focus has been on ARCx - deploying stETH as a collateral asset - whilst working towards the inclusion of stETH across Bancor, Compound and Cream. Our goal for Lido is to create a suite of staked assets which represent the backbone of their respective networks, built with composability and interoperability at its core, bringing the benefits of staked ETH to as many entities as possible. ## Staking This month Lido launched liquid staking on Terra in collaboration with Anchor and Terra, bringing liquid staking to the Terra ecosystem in the form of bLUNA - a staking token of Terra’s native LUNA staking. bLUNA tokens are pegged 1:1 with LUNA, and makes staked LUNA assets liquid and allows for their use as collateral to mint e.g. UST on the Anchor. Just two weeks after launch, 21,847,632 bLUNA have been minted with a dollar value of $412,393,214\. This has been a fantastic achievement for Lido and Terra and is a testament to the usability and value-add of liquid staked assets. > Introducing liquid staking on Terra. [https://t.co/3KqlRhoAL0](https://t.co/3KqlRhoAL0?ref=blog.lido.fi) [pic.twitter.com/PMBICa0727](https://t.co/PMBICa0727?ref=blog.lido.fi) > > — Lido (@LidoFinance) [March 17, 2021](https://twitter.com/LidoFinance/status/1372145945522143232?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) We’re excited for the number of opportunities which this integration brings with it. On the one hand we have the number of integrations possible to expand the scope of bLUNA. Moving one step further we have opportunities related to the use of stETH on the Terra blockchain, deploying staked ETH as a collateral asset to unlock bonded staking positions and mint/borrow assets including UST. This creates an incredibly exciting array of opportunities for the cross-chain applicability of Lido’s staked assets. At time of writing 215k ETH/stETH is staked in the Curve Finance pool (approximately $414m) , 7.32k on ARCx (approximately $13.2m) and 646 stETH ($1.19m) are on 1inch. ![](https://lh6.googleusercontent.com/R-u-40u_S77t-EtOHGPrtReI0HJI_uga-n4cReIG4tPB0nPYhfhqw9v2wfsPcJpGW_q68GXU27x9ZaCUiV6d7J6X82qwuCCbiTnDy54FBcLx9hK-oUy3TAoytPfaI5fgZX1dj4SC) The total amount of ETH staked with Lido is now 188,944.25 ETH, with a total USD value of $319,132,521.95\. This is up 4.4% from month 2 (180,998.68 ETH). 4,171 stakers are now using Lido to stake their Ethereum, up 24.09% from month 2 (3,361). The average amount staked per user is 45.29 ETH. This month Lido has paid out **1163.82** **stETH** in staking rewards, bringing the total rewards up to **1516.6 stETH**. ## Integrations Lido integrated with ARCx to allow for stETH to function as collateral to mint STABLEx tokens - a stablecoin native to the ARCx platform. STABLEx borrowed through an stETH loan can be pooled with USDT/USDC/DAI in a[ ](https://twitter.com/CurveFinance?ref=blog.lido.fi)Curve Metapool to farm ARCx, as well as to farm up to 500,000 LDO which has been allocated from the Lido treasury. After just one week the ARCx pool had +$10m worth of stETH as locked collateral. > stETH is live on [@arcxmoney](https://twitter.com/arcxmoney?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) 🏝️ > > Users can now provide stETH on [@arcxmoney](https://twitter.com/arcxmoney?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) as collateral to mint STABLEx and earn additional rewards. > > Get started here: [https://t.co/J0gimiGUy5](https://t.co/J0gimiGUy5?ref=blog.lido.fi) > > — Lido (@LidoFinance) [March 8, 2021](https://twitter.com/LidoFinance/status/1369017107841695753?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) Lido’s LDO token was listed on DeversiFi initially with an ETH market. DeversiFi is an L2 exchange built for secure, high-speed & gas-free token trading. You can trade the market here: [app.deversifi.com/LDO:ETH](https://t.co/DyAO8hqFe2?amp=1&ref=blog.lido.fi). DeversiFi proposed the listing via research.lido.fi using LDO from the Lido DAO Treasury to fund the listing and seed the market. We’re incredibly excited about this listing and the following stages which will see the addition of stETH onto DeversiFi, as well as an incentivised farming program which will see ETH stakers on DeversiFi rewarded with additional LDO for contributing liquidity. > Lido's LDO token is live on [@DeversiFi](https://twitter.com/deversifi?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) 🏝️ > > DeversiFi is an L2 exchange designed for secure, high-speed & gas-free Ethereum trading. > > Learn more: > 🔒 [https://t.co/G8bCeDlZH4](https://t.co/G8bCeDlZH4?ref=blog.lido.fi) > > Start trading: > 💸 [https://t.co/pEIMyUf2ZZ](https://t.co/pEIMyUf2ZZ?ref=blog.lido.fi) [https://t.co/nunivgHkX4](https://t.co/nunivgHkX4?ref=blog.lido.fi) > > — Lido (@LidoFinance) [March 25, 2021](https://twitter.com/LidoFinance/status/1375071463477288960?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) Lido was integrated into the Gnosis Safe wallet allowing for direct staking from the security of the Gnosis multi-sig wallet. With almost 2m ETH stored across Gnosis safes, this integration represents a significant jump towards simple and safe Ethereum staking. > You can now stake your ETH with Lido from the security of a multi-sig wallet using [@gnosisSafe](https://twitter.com/gnosisSafe?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi). Stake any amount of ETH, earn daily rewards, and unstake at any time. > > Almost 2m ETH stored on Gnosis Safe accounts are waiting to be put to work 🏝️ [pic.twitter.com/uBpN7L6US2](https://t.co/uBpN7L6US2?ref=blog.lido.fi) > > — Lido (@LidoFinance) [March 4, 2021](https://twitter.com/LidoFinance/status/1367432158994960384?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) Staying on the topic of integrations, proposals have been developed to integrate Lido and our stETH token into both [Cream](https://twitter.com/LidoFinance/status/1367132766358355968?ref=blog.lido.fi) and [Compound](https://twitter.com/LidoFinance/status/1368879823540617219?ref=blog.lido.fi). These integrations are a sign of what Lido is all about - the development of staked ETH as a building block for the remainder of the DeFi space to expand upon - e.g. using your staked ETH as collateral for a loan on Compound. We’re incredibly excited about what these integration proposals hold and we look forward to communicating their progress to the wider DeFi space. ## DAO On the governance front, the Lido DAO voted on a number of proposals intended to grow the Lido space and improve the staking experience for Ethereum holders. The Lido DAO voted for continuation of Curve staking rewards, distributing 0.5% of LDO supply to Curve stETH/ETH LPs over a 30 day period. This is the 3rd time this initiative has passed and it has proven successful with regards to growing the liquidity surrounding stETH. > A vote has passed to extend rewards for stETH/ETH LPs on [@CurveFinance](https://twitter.com/CurveFinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) until April 12th. > > 5,000,000 LDO will be distributed to LPs for an approximate APY of 23.4% on your ETH. [https://t.co/GlbNgPzXwK](https://t.co/GlbNgPzXwK?ref=blog.lido.fi) > > — Lido (@LidoFinance) [March 10, 2021](https://twitter.com/LidoFinance/status/1369618497844678657?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) Additionally, the DAO voted to accept a DeversiFi listing proposal and the allocation of 500,000 LDO to seed the initial LDO/ETH market and subsequently reward LPs on their upcoming stETH/ETH market > A signaling vote is active regarding the allocation of 500,000 LDO to seed an LDO/ETH market on [@deversifi](https://twitter.com/deversifi?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi). > > Track the vote here: [https://t.co/sLBkLIWBNb](https://t.co/sLBkLIWBNb?ref=blog.lido.fi) [pic.twitter.com/fI2HesVoTh](https://t.co/fI2HesVoTh?ref=blog.lido.fi) > > — Lido (@LidoFinance) [March 10, 2021](https://twitter.com/LidoFinance/status/1369652977699545100?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) This month the Lido DAO also introduced the Lido Node Operator Subgovernance Group which is focused on the addition, performance, and removal of node operators within the Lido DAO. The Subgovernance Group identified four node operators with values and performance history which matches that of the requirements of the Lido DAO and all identified node operators were successfully voted in by means of a [Snapshot vote](https://snapshot.vote/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/QmaqcSYfXLRtrTDvwepeAeM4dm3HinouEvPy9eNrbkLZ1Q). ## Community On the topic of the Ethereum community, the Lido DAO agreed to [cast a vote](https://twitter.com/LidoFinance/status/1366356796043112450?ref=blog.lido.fi) to signal support for EIP-1559 to mitigate fee volatility and improve Ether value accrual. To commemorate the launch of Lido’s liquid staking on Terra, Lido CTO Vasiliy Shapovalov livestreamed with CryptoCobie and Do Kwon, founder of Terra. We also published an article on liquid staking, its position relative to self-staking and exchange-staking, as well as what benefits users’ may be able to realise through a staking protocol like Lido. Check it out and let us know your thoughts: > In our recent tech deep dive article, [@LidoFinance](https://twitter.com/LidoFinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) looks into how to use liquid staking to get in on Ethereum 2.0.[#Crypto](https://twitter.com/hashtag/Crypto?src=hash&ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) [#Cryptocurrency](https://twitter.com/hashtag/Cryptocurrency?src=hash&ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) [#Ethereum](https://twitter.com/hashtag/Ethereum?src=hash&ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) [$stETH](https://twitter.com/search?q=%24stETH&src=ctag&ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi)[https://t.co/xXYEhBVfET](https://t.co/xXYEhBVfET?ref=blog.lido.fi) > > — CoinMarketCap (@CoinMarketCap) [March 24, 2021](https://twitter.com/CoinMarketCap/status/1374717785071304709?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) ## The Month Ahead The focus of Lido for the foreseeable future is the growth of integrations both across supported chains (Ethereum, Terra) as well as cross-chain integrations to grow the presence of Lido across the blockchain ecosystem. This includes future liquid staking with other blockchains, similar to LUNA/bLUNA and ETH/stETH, as well as enhanced DeFi integrations (e.g. stETH on DeversiFi). On the community front we look forward to presenting a number of changes. The Lido website will be updated to reflect our growing ecosystem with support for Luna staking, the addition of an stETH reward dashboard, reward calculator tools and much more. These will be unveiled in the coming weeks. Further steps will also be taken to enhance the staking experience across existing networks, with a potential example being the launch of insurance for staked bLUNA tokens. Adding to this we will be presenting a variety of new community initiatives including Developer Demos (with input from the Ethereum dev community!), Telegram AMAs/Q&As to contribute to improved education within the staking economy, and the launch of new Ethereum-focused content to shine a light on the fantastic developments taking place within the network. ## How you can help? Wherever possible and relevant, introductions made to the possible parties would be of great value: 1. Projects interested in integrating stETH or bLUNA to allow their users to stake directly through their platform. These include exchanges, wallets, farms, aggregators and portfolio management protocols. 2. Talented individuals that want to get involved with Lido and work on the growth of Lido and associated ecosystem partners. We are expanding across all functions and any individuals across development, marketing, product and more will be welcomed with open arms. ### ETH2 New Node Operator Recommendations - Wave 1 URL: https://blog.lido.fi/eth2-node-operator-recommendations/ Last updated: 2026-06-04T08:51:29.000Z The Lido Node Operator Subgovernance Group has come to an agreement on the first wave of recommended new node operators for the Lido staked ether product. The Lido DAO has decided to settle with 4 organizations out of 13 applicants given the growth Lido is experiencing and our goal of balancing profitability and decentralization. These 4 node operators will be suggested for onboarding to the Lido DAO via a [Snapshot vote](https://snapshot.org/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/QmaqcSYfXLRtrTDvwepeAeM4dm3HinouEvPy9eNrbkLZ1Q) that will run until March 21, 2021. Over the past few weeks, we collected applications, had some conversations, evaluated applicants and got together on March 8 to finalize our recommendations. We settled on the following four node operators and have had additional calls to confirm their fit and interest to join Lido over the past few days: [**Blockscape**](https://blockscape.network/?ref=blog.lido.fi)**:** Blockscape is a team relatively new to the staking industry, but with lots of experience in traditional infrastructure operation/DevOps. The team based in Stuttgart, Germany, has contributed to the Lido DKG ceremony and ran nodes on multiple internal testnets, showcasing their skill and willingness to provide value to Lido, which is why we are excited to recommend them! [**DSRV**](https://www.dsrvlabs.com/?ref=blog.lido.fi)**:** This team from Korea has built some amazing dashboards and products for other networks, including e.g. Chaiscan for Terra and a Node-as-a-Service platform for Mina. They also built a liquid staking prototype during a NEAR hackathon, so they are familiar with Lido’s core proposition. We are excited to recommend this organization to improve Lido’s decentralization and strengthen Lido’s presence in Asia. [**Everstake**](https://everstake.one/?ref=blog.lido.fi)**:** Everstake is a large staking provider based in Ukraine with potentially the most comprehensive portfolio of supported protocols. The team has a history of building tooling and participating in the community via content creation, dashboards, and also development: e.g. on the Wormhole bridge. The Everstake team is well-known to our current node operators and we are happy to recommend them and excited to hopefully see them contribute to Lido soon. **Skillz:** This French team is building a “Blockchain Infrastructure as a Service” product initially focused on Ethereum, Tezos, and the Pocket Network. They convinced us with their technical sophistication, as well as interest and understanding of the Lido product and vision. We are sure the SkillZ team would push Lido forward and are thrilled to include them in this first shortlist. ## **The Onboarding Process** Should LDO holders signal approval for the chosen operators through the Snapshot vote, each of them will issue a vote to be added to the Lido DAO. In parallel, new operators can join the Lido testnet (more info coming soon) in which upcoming Lido functionality will be tested. Once accepted, new operators will provide keys for 100 Beacon Chain validators and issue a vote to increase their staking limits. The Lido protocol will distribute freshly provided ETH to the new operators and there will be another vote to raise the staking limits of new operators after the initial 100 key testing phase (this is planned to happen around 2 weeks after the first validators ran without incidents). ## **How We Evaluated Applicants** We did our best to settle on an evaluation practice that is transparent while respecting the node operators privacy, as well as ensuring our own ratings are unbiased. We settled on keeping the actual evaluation that each of the Subgovernance members did and that we aligned on in a call private, but wanted to share the high-level criteria that each of us took into consideration in the process. We covered these in the recording of the evaluation call that can be found [here](https://drive.google.com/file/d/1a-HC61DowdqjIXQVG0rJfCExufavX-U1/view?usp=sharing&ref=blog.lido.fi). Each of the Lido Node Operator Subgovernance Group members has had a slightly different focus, and we tried to incorporate factors such as infrastructure setup, track record, level of contributions / potential to provide value to Lido, long-term alignment, as well as other strategic factors such as geographical location into consideration. ## **The Way Forward** We would like to encourage LDO holders to vote on Snapshot and would like to thank all node operator applicants for applying. We are looking forward to bringing Lido to further networks and expanding the validator set with further onboarding waves! We encourage node operators to apply to these. We’ll be contacting all the applicants when the next batch will be announced. Please, reach out if you want to be in our contact list and be the first to get the news! \- [Felix](https://www.linkedin.com/in/felix-lutsch/?ref=blog.lido.fi) (in the name of the Lido Node Operator Subgovernance Group) ### Lido's stETH: DeFi Use-cases URL: https://blog.lido.fi/steth-defi-usecases/ Last updated: 2023-09-12T04:12:26.000Z Interoperability and composability are amongst the strongest of pillars in DeFi along with decentralization and transparency. To piece together separate protocols and to enable them to work with one another to accomplish a desired task through the utilization of innovative mechanisms is the ultimate goal of the platforms developed in this ecosystem. Since the birth of DeFi, as well as its mass adoption through the cryptocurrency space, the user base has been exponentially increasing along with the development of protocols which seek to solve problems that hindered the past protocols that came before them. Developed protocols can adopt these innovative mechanisms and modify or revise them to their specific protocol use case which in turn leads to the betterment of the greater DeFi ecosystem and signals to us the precursor of a new emerging ecosystem. ![](https://blog.lido.fi/content/images/2021/03/1_hXtZ31K_aEz6rtQvFlcQ8w.png) To understand the future of DeFi, you must first understand what is being developed in the current moment and how adaptation and revision of current mechanisms can benefit protocols mutually. So what is [Lido](https://www.lido.fi/?ref=blog.lido.fi) developing? ## What is stETH? Users that stake with Lido receive stETH. [stETH](https://www.coingecko.com/en/coins/lido-staked-ether?ref=blog.lido.fi) is Lido’s liquid token equivalent of [staked Ethereum](https://stake.lido.fi/?ref=blog.lido.fi). Users can stake their ether with Lido, bypassing the restraints (illiquidity, immovability, and inaccessibility) from just staking in the Eth2 deposit contract directly. You can find more information about the [**mechanics of stETH here**](https://blog.lido.fi/steth-the-mechanics-of-steth/). Lido’s stETH is fully intended to be used across a wide range of varying DeFi protocols where applicable. These use cases can range from lending protocols, DEX'es or liquidity pools, aggregators, optimizers, etc. Below, we share more information about particular use cases where stETH can potentially be integrated. ## Liquidity Pools Liquidity pools are collections of liquidity which consist of tokens which can be seamlessly exchanged with one another through the use of AMMs (automated market makers). Popular examples of platforms that use liquidity pool AMMs are [Uniswap](https://app.uniswap.org/?ref=blog.lido.fi#/swap), [Curve](https://www.curve.fi/?ref=blog.lido.fi), and [SushiSwap](https://sushi.com/?ref=blog.lido.fi). stETH can be pooled together with vanilla ETH in a liquidity pool. This in turn allows users to indirectly unstake their ETH and receive their initial ETH deposit back via pool swaps, bypassing the time required to wait for transactions on Eth2 to be enabled if a user decides that they would like to unstake. ![](https://blog.lido.fi/content/images/2021/03/Screenshot-2021-03-12-at-09.56.47.png) stETH/ETH pool on Curve Finance Due to stETH’s relationship with vanilla ETH (users will be able to redeem an equivalent amount of ETH for stETH once transactions are enabled), we hope this will result in less impermanent loss for liquidity providers compared to other conventional liquidity pools - allowing for liquidity providers to gain trading fees without engaging in too much risk - as well as to help hold the peg between the two assets. Liquidity pools are a primary structure in Lido’s ecosystem that helps maintain stETH as the liquid equivalent of vanilla ETH. Without liquidity pools, users will not be able to unstake until transactions are enabled, breaking a core aspect of Lido’s manifesto. There are ongoing liquidity mining programs that are occurring with stETH and LDO. You can read more information about them here: - [stETH-ETH Curve pool](https://blog.lido.fi/providing-steth-liquidity-via-curve-to-receive-rewards/) - [LDO-ETH Onsen pool](https://app.sushi.com/legacy/add/ETH/0x5A98FcBEA516Cf06857215779Fd812CA3beF1B32?chainId=1&ref=blog.lido.fi) - [Curve's stETH-ETH liquidity pool](https://www.curve.fi/steth/?ref=blog.lido.fi) allows liquidity providers to simultaneously accrue trading fees, liquidity mining rewards (CRV, LDO), as well as Lido’s Eth2 reward rate. - [SushiSwaps LDO-ETH Onsen pool](https://app.sushiswap.fi/pair/0xc558f600b34a5f69dd2f0d06cb8a88d829b7420a?ref=blog.lido.fi) allows liquidity providers to simultaneously accrue trading fees, liquidity mining rewards (SUSHI), as well as Lido’s Eth2 reward rate. ## Lending Lending protocols can adopt stETH to allow users to borrow assets while simultaneously accruing Eth2 rewards while still being staked as collateral. To do so, stETH must first be wrapped to be applicable as collateral. This opens up an extra layer of efficiency and composability when it comes to the DeFi ecosystem in relation to rewards farming and borrowing. Some examples of lending protocols that may adopt stETH are: [Aave](https://aave.com/?ref=blog.lido.fi), [Maker](https://makerdao.com/en/?ref=blog.lido.fi), [Compound](https://compound.finance/?ref=blog.lido.fi), [Cream](http://cream.finance/?ref=blog.lido.fi), [Alpha](https://alphafinance.io/?ref=blog.lido.fi)). The addition of stETH as collateral in lending protocols allows for advanced composable rewards farming strategies. A user will be able to deposit stETH as collateral and take out an ETH loan to be further swapped back to stETH to add to their existing loan as a sort of leveraged position. Alternatively, ETH borrowed can be put to other purposes, such as: staking in Lido, depositing into other strategies, providing it as liquidity in a liquidity pool, etc. Price fluctuations of the underlying collateral asset still play a large role in determining a user's health ratio and liquidation risk. Although, this *theoretically* allows users - who stake stETH as collateral while borrowing a position - to constantly improve their health ratio whilst constantly diminishing the possibilities of any unwanted liquidations. Lending protocols may also allow for the borrowing of stETH in the form of a loan. This would allow users to take out a loan that is, in essence, constantly paying off itself. If there are many people that would like to borrow stETH, suppliers can also earn rewards on their stETH as well, earning the Eth2 rate simultaneously with the variable lending rate. With the recent advent and hysteria of undercollateralized loans (credit delegation or protocol-to-protocol), lending protocols may support stETH loans to other protocols without needing to supply collateral beforehand. This is particularly efficient with the use of stETH, as the rebasing factor of stETH helps the borrower pay off their debt easier simply by holding it. Proposals have been shared on the governance forums of certain lending protocols. Users have discussed the possibilities of adding stETH as collateral. You can read more information about it here: - [Maker stETH onboarding proposal](https://forum.makerdao.com/t/steth-mip6-collateral-onboarding/5762?ref=blog.lido.fi) - [Collateral onboarding call with Maker](https://forum.makerdao.com/t/collateral-onboarding-call-25-lido-wednesday-january-27-18-00-utc/6135/6?ref=blog.lido.fi) - [Aave stETH onboarding proposal](https://governance.aave.com/t/proposal-add-support-for-steth-lido/2123?ref=blog.lido.fi) ## Strategies/Aggregators Aggregators can use stETH in their rewards farming strategies as an additional rewards layer on top of their already existing rewards farming. Strategies are flexible and can maximize the highest rewards possible for their users. Popular examples of aggregators include: [Yearn](https://yearn.finance/?ref=blog.lido.fi), [Harvest](https://harvest.finance/?ref=blog.lido.fi), [Badger](https://badger.finance/?ref=blog.lido.fi). These strategies can utilize a variety of other protocols/initiatives to generate this high rewards, such as: farming through liquidity mining incentives, earning rewards through lending protocols (as discussed prior), earning rewards through native protocol staking, and so on. ![](https://blog.lido.fi/content/images/2021/03/Screenshot-2021-03-12-at-09.59.09.png) stETH on Harvest Finance An example of an existing strategy is the st. Ether-ETH pool, which uses the liquidity mining rewards earned from providing liquidity in the Curve stETH-ETH pool to automatically compound into stETH/ETH which is used to stake back into the pool. With the addition of lending protocols adopting stETH as collateral, new strategies can be implemented utilizing the borrowed assets taken as a loan. Users can provide their stETH as collateral, borrow a position, then use those borrowed assets for a variety of rewards farming opportunities, such as providing liquidity into the Curve pool, providing liquidity into the Onsen pool, borrowing another position, and more. ## Moving Forward The connections between various DeFi protocols in the ecosystem are extensive. Protocols can integrate and rely on one another which opens up endless possibilities for future innovations. With new integrations come new novelties, and with new novelties comes a new paradigm. These potential future integrations will help strengthen Lido to become a powerhouse in Ethereum liquid staking. If you are a protocol that would like to integrate with Lido, please contact our team [here](mailto:info@lido.fi). ### Lido Development Update / 2 Months of Lido URL: https://blog.lido.fi/lido-development-update-2/ Last updated: 2026-06-24T11:42:52.000Z It’s now been two months since we launched liquid staking with Lido. When you stake your Ethereum with Lido you receive an equivalent amount of stETH which acts as your staked ETH balance. Your stETH balance changes daily - at 12pm UTC - to reflect your staking rewards and earnings. Using stETH, Lido allows you to unstake your Ethereum at any time, as well as use your staked ETH across other DeFi protocols - Yearn, Curve, 1inch, to name a few - for additional yields. ## Staking Over the last 30 days: - The total staked with Lido is now 180,998**.**68 ETH, with a total USD value of $302,917,583.71\. This is up **136.29%** from month 1 (76,600.35 ETH) and further cements Lido’s position as the leading liquid Ethereum staking solution. ![](https://lh3.googleusercontent.com/0gwwqGwr07jqMp8P8zJpRU7d5AhbUS_aE1E2QKFRsgp83mF5Lqh1xCSmaTCYverQkoVODfQVQgcGr-6PZt6XFRXpE-Rz8xqbMDD-acwFUXz-zKALiZKBA2sbjPN-VxfD6lIyXiMJ) - 3,361 stakers are now using Lido to stake their Ethereum, up 85.07% from month 1\. The average amount of ETH staked per user is 52.02 ETH. - This month Lido has paid out 327 stETH in staking rewards, bringing the total rewards up to 353.6 stETH. - At the time of writing, approximately [5.65%](https://duneanalytics.com/vsh/lido-finance-extended?ref=blog.lido.fi) of all staked Ethereum is staked using Lido. Looking at the last 30 days however, more than 20% of all staked ETH was staked with Lido. > In the last month around 25% of all staked Ethereum was staked using Lido. [pic.twitter.com/zEKfhRBPTz](https://t.co/zEKfhRBPTz?ref=blog.lido.fi) > > — Lido (@LidoFinance) [February 15, 2021](https://twitter.com/LidoFinance/status/1361253424558448641?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) - Two Dune Analytics dashboards were created to cover Lido - [Lido Finance](https://duneanalytics.com/k06a/lido-finance?ref=blog.lido.fi) created by @k06a and [Lido Finance Extended](https://duneanalytics.com/vsh/lido-finance-extended?ref=blog.lido.fi) created by [@\_vshapovalov](https://twitter.com/%5Fvshapovalov?ref=blog.lido.fi). Both of these complement the existing [Lido Nansen dashboard](https://pro.nansen.ai/lido?ref=blog.lido.fi) which has expanded to include coverage of DAO votes. - This month, 17,000 ETH (\~30 million USD) was staked with Lido in one transaction, representing the largest single transaction using Lido. > 17,000 ETH (≈30 million USD) has just been staked with Lido in one transaction. > > That brings the total to 163,625 ETH 🏝️[https://t.co/ts9JlSHO9h](https://t.co/ts9JlSHO9h?ref=blog.lido.fi) > > — Lido (@LidoFinance) [February 14, 2021](https://twitter.com/LidoFinance/status/1361016113669304322?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) - We added a disclaimer on the [stake.lido.fi ](https://stake.lido.fi/?ref=blog.lido.fi)website where users could be easily directed to exchanges where a premium may be gained when staking with Lido. - A [hackmd.io](https://hackmd.io/2kKpoqE6SfaS9m5GunW90g?both&ref=blog.lido.fi) page was created by [@\_vshapovalov](https://twitter.com/%5Fvshapovalov?ref=blog.lido.fi) detailing the possible specifications for Lido withdrawals. ## Integrations A fundamental mission at Lido is to remove the need to choose between Ethereum staking and DeFi. Through integrations with key protocols and applications throughout the DeFi space, we’re allowing stakers to put their staked Ethereum to use to further support the Ethereum community and help grow its use-cases. We are incredibly proud of the wide range of integrations which already exist - just two months in - and we look forward to building on this initial success. - On February 2nd we helped launch a ‘Quadro Farming’ initiative for stETH/LDO liquidity providers together with the 1inch team. This initiative allows LPs to earn rewards in up to four different ways: in 1inch, trading fees, stETH and LDO, to further facilitate the liquidity of stETH and LDO tokens. In case you missed it, check out our [Guide to 1inch ‘Quadro Farming’](https://blog.lido.fi/guide-to-1inch-quadro-farming/). In line with this initiative, the Lido DAO approved a vote to allocate 250,000 LDO to 1inch Farm LPs. > No time to explain – on February, 2, midnight (00:01 UTC), we're launching an unprecedented 'quadro farming' program for [$stETH](https://twitter.com/search?q=%24stETH&src=ctag&ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi)\-$LDO pool! 😈💰[https://t.co/KUfp4CPhaF](https://t.co/KUfp4CPhaF?ref=blog.lido.fi) [@LidoFinance](https://twitter.com/LidoFinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) [#DeFi](https://twitter.com/hashtag/DeFi?src=hash&ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) [pic.twitter.com/jMN5LHUc4I](https://t.co/jMN5LHUc4I?ref=blog.lido.fi) > > — 1inch.exchange (@1inchExchange) [February 1, 2021](https://twitter.com/1inchExchange/status/1356325378671992832?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) - Two weeks ago LDO was added to the SushiSwap Onsen menu allowing users to earn up to 25% APY for providing LDO/ETH liquidity. [Onsen](https://app.sushi.com/farm?chainId=1&ref=blog.lido.fi) is a secondary product launched by SushiSwap in order to initiate liquidity mining incentives on their platform to further improve market efficiency and stability. Check out our ‘[Guide to SushiSwap Onsen](https://blog.lido.fi/liquidity-mining-with-sushiswap-onsen/)’ to get started. - stETH was added to Harvest Finance allowing LPs to earn up to 35% APY in return for providing CRV/stETH liquidity. Harvest Finance is a DeFi platform providing users with the highest yields available across the most innovative DeFi protocols, optimising yields through use of the latest DeFi farming techniques. To get set up on Harvest Finance, visit [harvest.finance](https://harvest.finance/?ref=blog.lido.fi). - Lido has partnered with Unslashed Finance, a novel blockchain-based insurance protocol, to insure more than $250 million worth of staked ether. This protects Lido stakers against up to 5% slashing, significantly mitigating one of the primary risks associated with Ethereum staking. > [@LidoFinance](https://twitter.com/LidoFinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) has just purchased enough slashing cover for 196,749.858268 stETH from [@UnslashedF](https://twitter.com/UnslashedF?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi), DAO-a-DAO. [https://t.co/XtHGDmFgWf](https://t.co/XtHGDmFgWf?ref=blog.lido.fi) > > — Vasiliy Shapovalov (@\_vshapovalov) [February 14, 2021](https://twitter.com/%5Fvshapovalov/status/1361002502561366019?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) - A vote was passed to continue Curve ETH/stETH LP rewards for another 30 days, until March 12th. In line with this, 500,000 LDO were allocated to Curve LPs as incentive. > The new round of LDO rewards for [@CurveFinance](https://twitter.com/CurveFinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) stETH/ETH LP's has started. > > 500,000 LDO will be distributed to stETH/ETH LPs over the next 30 day period, ending on March 12th. > > — Lido (@LidoFinance) [February 12, 2021](https://twitter.com/LidoFinance/status/1360308763010322437?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) ## DAO - This month we launched a [Lido Snapshot](https://snapshot.vote/?ref=blog.lido.fi#/lido-snapshot.eth) forum intended to function as a signalling platform to determine proposal sentiment prior to launching on-chain votes. So far Snapshot has been used to vote across a number of topics including: 1. The use of [stETH as collateral on ARCx](https://snapshot.vote/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/QmbdFJqSW7STonq5YDpgCVNZ19ji2RYtM9C95MrVohh4R4). 2. The [continuation of Curve LP rewards](https://snapshot.vote/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/Qmd1tFviq2hhWrXcvJQUx18YBaVFfT46uVSW1qn2dgsMsk). 3. Providing stakers with [slashing insurance through Unslashed](https://snapshot.vote/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/QmRoepWm1zF6oVCKWgrwpRJv9xrUMW2hoCT6ukR2doRrTR). 4. The [allocation of LDO rewards to 1inch stETH/LDO LPs](https://snapshot.vote/?ref=blog.lido.fi#/lido-snapshot.eth/proposal/QmPdKHatBiaZEAkJ384Gybq2xCzVSsa2CpFPmGRzudCdnG). - In February we also introduced the Lido DAO Treasury Fund - a fund intended to develop and upgrade the Lido protocol to solidify our position as the leading liquid Ethereum staking solution. Use-cases for the treasury fund include Reserve Fund, development grants / gitcoin grants, salaries and compensation, legal requests, research inquiries with other protocols and much more. For a breakdown, check out: [Lido DAO treasury fund](https://twitter.com/LidoFinance/status/1357415738143817728?ref=blog.lido.fi). - Lido participated in a MakerDAO Collateral Onboarding call to make the case for the use of stETH as collateral across Maker. As an extension of this, stETH was greenlit as collateral and the onboarding process has begun. Track the vote status [here](https://vote.makerdao.com/polling/QmWfPcBx?network=mainnet&ref=blog.lido.fi#poll-detail). - We launched the “[Lido Node Operators Sub Governance Group](https://research.lido.fi/t/node-operator-sub-governance-new-node-operator-application-process/344?ref=blog.lido.fi)”, a group of existing founding node operators operating as consultants tasked with aiding in determining the addition of new node operators with Lido. - A number of new proposals were voted upon over the course of the last month: 1. **Proposal #40**: Set the maximum number of validators to stake for the node operator #1 to 1000 2. **Proposal #41**: Node Operators Registry: Add node operator named Everstake.one with reward address 0x3D5A…B97F and staking limit 0. 3. **Proposal #42**: Allocate 250,000 LDO to liquidity providers on LDO/stETH pair on 1inch exchange: 4. **Proposal #43**: Create a new payment of 5000000 LDO to 0x753D…1709 for 'Incentives for stETH/ETH Curve LPs'. 5. **Proposal #44**: Create a new payment of 50000 LDO to 0x2Ca7…5CF4 for 'Purchase for slashing insurance'. 6. **Proposal #45**: Set the maximum number of validators to stake for the node operator #2 to 2000 All active and past votes can be tracked via [mainnet.lido.fi](https://mainnet.lido.fi/?ref=blog.lido.fi#/lido-dao/0x2e59a20f205bb85a89c53f1936454680651e618e/). ## Community - We launched the [Lido Ecosystem](https://lido.fi/lido-ecosystem?ref=blog.lido.fi) page to track all DeFi, Wallet and Exchange integrations for both Lido and stETH. Think of any that are missing from the page? Tweet us and let us know. - We had the honor of stopping by Zapper TV to discuss all things Lido - specifically breaking down various liquidity initiatives and doing a walkthrough of how to add stETH liquidity to Curve. Watch the full show here: > Want to stake ETH but can't commit to a validator? We discussed options today with [@LidoFinance](https://twitter.com/LidoFinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) CoFounder [@\_vshapovalov](https://twitter.com/%5Fvshapovalov?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi). > > 💧Stake [#ETH](https://twitter.com/hashtag/ETH?src=hash&ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) at [https://t.co/s2LZtt5WbP](https://t.co/s2LZtt5WbP?ref=blog.lido.fi) > ⚖️Swap ETH<>stETH > 🌀[@CurveFinance](https://twitter.com/CurveFinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) stETH LP (earn 4 yields) > 🔒Farm [@iearnfinance](https://twitter.com/iearnfinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) stETH yVault[https://t.co/3JyjAzQIpW](https://t.co/3JyjAzQIpW?ref=blog.lido.fi) > > — DeFi Dad ⟠ defidad.eth (@DeFi\_Dad) [February 4, 2021](https://twitter.com/DeFi%5FDad/status/1357169893146296327?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) ## The Month Ahead - Completion/adoption of stETH as collateral in Aave and Maker. - Further integrations: Proposal of stETH as collateral in Cream and Compound. Many integrations and developments have been achieved this month with Lido, and many more are to come in the following months. We are expanding our reach to more teams and to more protocols which will help push the respective protocol and Lido forward, creating new innovative ways stETH may be used in the DeFi ecosystem. If you would like to share any of your ideas, questions, or concerns please visit [research.lido.fi](https://research.lido.fi/?ref=blog.lido.fi). ## **Resources** - [Stake with Lido](https://stake.lido.fi/?ref=blog.lido.fi) - [Twitter](https://twitter.com/lidofinance?ref=blog.lido.fi) - [Reddit](https://reddit.com/r/lidofinance?ref=blog.lido.fi) - [Telegram](https://t.me/lidofinance?ref=blog.lido.fi) - [Discord](https://discord.com/invite/vgdPfhZ?ref=blog.lido.fi) - [Blog](https://blog.lido.fi/) - [DAO forum](https://research.lido.fi/?ref=blog.lido.fi) - [Documentation](https://github.com/lidofinance?ref=blog.lido.fi) ### The Lido DAO Treasury Fund URL: https://blog.lido.fi/lido-dao-treasury-fund/ Last updated: 2026-06-24T11:31:11.000Z The [Lido DAO](https://mainnet.lido.fi/?ref=blog.lido.fi#/lido-dao.aragonid.eth) is a community developing a liquid [Ethereum staking](https://www.lido.fi/?ref=blog.lido.fi) solution for users to stake ETH and contribute to the security and stability of the Ethereum ecosystem. Lido’s Ethereum staking protocol has been built as a DAO to preserve Lido’s upgradability and stability whilst maintaining decentralised infrastructure. The Lido DAO governs the Lido liquid staking protocol, preserving protocol upgradability whilst determining key parameters to maintain efficiency and protocol stability. Underpinning the Lido DAO is the [LDO token](https://blog.lido.fi/introducing-ldo/) \- a governance token allowing holders to participate in particular governance votes to further improve aspects of Lido. ## Treasury Fund Overview Currently the Lido DAO has a treasury containing [\~350,000,000 LDO](http://etherscan.io/token/0x5a98fcbea516cf06857215779fd812ca3bef1b32?a=0x3e40d73eb977dc6a537af587d48316fee66e9c8c&ref=blog.lido.fi) \- around 35% of the total LDO supply - which can be used for specific purposes to the benefit of the DAO. The Lido DAO treasury fund intends to distribute its supply of LDO to use these funds to develop and upgrade the Lido protocol to solidify our position as the leading liquid staking solution. All LDO distributions will be discussed transparently through research.lido.fi, with Snapshot votes used to signal sentiment and subsequent DAO votes to cement distributions. You can read more about LDO tokens and its intended use case [here](https://blog.lido.fi/introducing-ldo/). ## Treasury Fund Use Cases The purposes of the Lido DAO treasury fund are not fixed and are dependent on the direction suggested by the DAO community itself. Potential purposes span across a range of categories and include: - Reserve Fund - Development grants / Gitcoin grants - Salaries and compensation - Legal requests - Research inquiries with other protocols - Social/marketing campaigns - Protocol fees - Liquidity mining events The Lido DAO treasury wallet can be tracked [here](http://etherscan.io/token/0x5a98fcbea516cf06857215779fd812ca3bef1b32?a=0x3e40d73eb977dc6a537af587d48316fee66e9c8c&ref=blog.lido.fi). ### Reserve Fund In cases of slashing, users can rely on an insurance protocol to cover any losses of funds that were subject to slashing penalties. Eth2 implements slashing penalties as a way to prevent their network from being easily attacked, as well as to ensure validators are doing their task (proposing and certifying the next block in the chain). Rewards and penalties are socialised, meaning that any slashing penalties that occur will reduce the overall reward rate for every Lido staker. Lido can utilize its Reserve Fund to purchase cover that will be able to reimburse users for the lost staked funds, thereby allowing everyone to get their advertised rate. Lido can sell stETH and LDO in treasury or spend them directly to fund the purchase of cover for staked funds. ### Contributions rewards To help ensure the future of Lido, LDO can be used to pay for certain funds that helps the protocol strive. An example of those being: paying full-time and occasional contributors of Lido, and paying for future protocol development in the forms of audits, developers/coders, oracles, future node operators/validators, gas fees for contract deployments, etc. We believe that LDO tokens should be rewarded to those who verily develop and push along the protocol to become something greater, allowing for the developers to have a voice in something that they helped build. This can take place in the forms of: coding, finding smart contract bugs, developing new programs that are beneficial to Lido (eg. dashboards), and the list goes on. LDO can be provided unlocked or vested, determined by the specific kind of work, value alignment and the transferred amount. If the other party does not accept LDO (this is the case for some audit firms, for example), the DAO can sell LDO to fund these expenses. Contributions also include Gitcoin grants for technical or documentational contributions which add to the Lido staking ecosystem. ### Research inquiries Users are encouraged to research other protocols or chains where liquid staking with Lido can be applicable. A detailed inquiry can be shared to the forums where the user can explain the use-cases of the integration and how the two entities can work with one another. Researchers are expected to publish their findings alongside information on the related protocol or chain. This inquiry does not necessarily need to be exclusive to DeFi and can expand to any cross-chain protocols. ### Social marketing campaigns A portion of LDO in the treasury can be allocated towards social marketing campaigns. This is to spread awareness for the protocol and to teach those uninformed about Lido’s goals and future prospects. A variety of social marketing campaigns can be created, such as: interactive quizzes, contests, competitions, and more. An example of a possible social marketing campaign to gain awareness is [CoinMarketCap](https://research.lido.fi/t/proposal-coinmarketcap-earn-campaign/172?ref=blog.lido.fi), where users learn about the protocol and afterwards answer a questionnaire related to the things they have recently learned about in order to win rewards. ### Protocol fees Protocol fees can be siphoned from the Lido treasury to be directed to LDO token holders that vote in governance. This is to encourage users to actively vote and participate in governance to help ensure the future development of Lido through fair and non manipulative exploitations. Currently as it stands, fees from stETH rebases are split between the treasury and the node operators/validators. A proposal explaining this mechanism as well as an explanation of the specific details it intends to implement (portion of the fees taken only from the Lido treasury) can be found [here](https://research.lido.fi/t/proposal-18-incentive-for-dao-participation-directed-to-ldo-token-owners/95/10?ref=blog.lido.fi). ### Liquidity mining events Users that provide liquidity to the supported liquidity mining pools can be rewarded with the DEX’s native token as well as LDO allocated from the treasury, Liquidity mining events help to encourage the liquidity of stETH. This helps ensure the liquid aspect of stETH, allowing it to be freely exchanged/transferred and swapped on an exchange. Liquidity providers also benefit from the trading fees while still maintaining a somewhat lower level of impermanent loss due to the relationship between stETH and ETH. An example of past liquidity mining events: - [Curve's stETH-ETH pool](https://blog.lido.fi/providing-steth-liquidity-via-curve-to-receive-rewards/) - [SushiSwap's LDO-ETH pool](https://blog.lido.fi/liquidity-mining-with-sushiswap-onsen/) - [1inch's LDO-stETH pool](https://blog.lido.fi/guide-to-1inch-quadro-farming/) ## Moving Forwards These incentives will help strengthen the protocol as well as to help develop the protocol to adapt to changes or roadblocks that may demean the protocol in the future. These developments can be manifested through unique protocol innovations, future protocol integrations with other parties, cross-chain liquid staking possibilities, or widespread adoption from cryptocurrency users. For suggestions or proposals as to how to allocate the Lido DAO treasury fund, please submit a proposal using [research.lido.fi](https://research.lido.fi/?ref=blog.lido.fi). ### To stake Ethereum with Lido, visit [stake.lido.fi](https://stake.lido.fi/?ref=blog.lido.fi). ### Lido's stETH: The mechanics of staked ETH URL: https://blog.lido.fi/steth-the-mechanics-of-steth/ Last updated: 2023-09-12T04:11:28.000Z Users who stake their ETH into the Eth2 contract via Lido will receive the liquid token equivalent in the form of stETH. For the sake of simplicity, this means that if you stake 1 ETH with Lido, you receive 1stETH in return. stETH allows users to participate in the DeFi ecosystem - Yearn, Curve, Maker, Aave - whilst still accruing Eth2 rewards earned from staking during Phase 0. stETH accrues staking rewards regardless of where it is acquired. This means that regardless of whether you acquire stETH directly from staking via stake.lido.fi, purchase stETH from 1inch or receive it from a friend, it will rebase daily to reflect Ethereum staking rewards. This nullifies the downsides from staking into the Eth2 contract directly: illiquidity, immovability, inaccessibility. Instead of locking up your staked ETH, Lido allows you to put it to use so you don’t need to choose between Ethereum staking and DeFi participation. More information about this can be found here: [blog.lido.fi/introducing-lido](https://blog.lido.fi/introducing-lido/). ![](https://lh4.googleusercontent.com/0hJvWNaelPIwDjk0hg8eJyT6EvCJC2tEATqY-dytoZ9ml0HVkLKApx4cpBZA8zyhKMqNOaRQea0Ng36Dhqo4RFx6ThNdLpet2ioehcOP2qj8aMkicD5Ko6Xvqjhf8ONYoFy5VNVE) How staking Ethereum with Lido works ## Mechanics of stETH stETH token balances update once a day when the oracle reports changes in Eth2 deposits and changes in ETH rewards from users who stake via Lido. This occurs once a day at 12PM UTC. Because the rewards are embodied through a balance rebase, users who hold stETH will not see a transaction sent to their wallet. Rather, users should see their stETH balance automatically change without an accompanying transaction taking place. This rebase works across integrated DeFi platforms like Curve and Yearn. This means that if you are to stake your stETH across these protocols to earn additional rewards, you will continue to benefit from daily stETH staking rewards as well. UniSwap, 1inch and SushiSwap are not designed for rebasable tokens and as a result you risk losing out on a portion of your daily staking rewards through providing stETH as liquidity across these platforms. When a user deposits ETH via Lido, that ETH is split between node operators which is then sent to their respective validators. ## The stETH Reward Rate Users who stake their ETH with Lido will receive daily rewards - in the form of stETH balance rebases - from day one. This is possible because staking rewards with Lido are socialised across all stakers. Rebases affect all holders of stETH regardless of whether their ETH has actually been deposited into the queue as of yet. This mechanism is the reason why the stETH reward rate is currently lower than that of Ethereum. Only a portion of Lido validators have made it through the queue, from which all existing stETH holders are accruing their rewards – including the new depositors. This results in an initially lower reward rate because the amount of rewards being accrued from the minority of already accepted validators is being split proportionally towards all stETH holders. As more of Lido’s validators are activated, the stETH reward rate will grow correspondingly and gravitate towards the full Ethereum staking rate. To track the Eth validator queue, visit [eth2-validator-queue.web.app](https://eth2-validator-queue.web.app/?ref=blog.lido.fi). A dashboard to view these validators (and their time in queue alongside their estimated finalizing date) is currently being developed. This dashboard will also display related information such as: number of current validators, rewards being paid out to stETH holders, total amount of ETH staked via Lido, the active number of stakers, Lido APY, Eth2 APY. ## Reward rate and active discussion There have been active discussions in the Lido community regarding the initially low reward rate. Some members have discussed the possibility of counteracting or offsetting this low reward rate by distributing LDO tokens to compensate the affected users. Some members have discussed other methods through which this can be achieved: emissions/retroactive flat airdrop, locked/unlocked periods, program requirements, etc. You can participate in the discussion here: [Counteract Low Reward Rate With LDO Emissions](https://research.lido.fi/t/counteract-currently-low-reward-rate-with-ldo-emissions/194?ref=blog.lido.fi). In the meantime, if you would like to earn a greater rewards on your stETH, you can provide your stETH – or ETH – as liquidity in the Curve stETH pool to earn the current Lido reward rate, trading fees accrued from the pool, LDO rewards, and CRV rewards simultaneously. You can find more information about this here: [Providing stETH Liquidity Via Curve](https://blog.lido.fi/providing-steth-liquidity-via-curve-to-receive-rewards/). If you have any ideas you would like to share or any general questions you would like to ask, please post them on the [Lido DAO forums](https://research.lido.fi/?ref=blog.lido.fi). ## Resources - [Introducing Lido](https://blog.lido.fi/introducing-lido/) - [Staking Ethereum with Lido](https://blog.lido.fi/staking-ethereum-with-lido/) - [How Lido’s validator choices help you avoid hostage ETH](https://blog.lido.fi/how-lidos-validator-choices-help-you-avoid-hostage-eth/) - [Ethereum 2.0 FAQ](https://consensys.net/knowledge-base/ethereum-2/faq?ref=blog.lido.fi) ### Guide: Using Lido's stETH and LDO on SushiSwap URL: https://blog.lido.fi/liquidity-mining-with-sushiswap-onsen/ Last updated: 2026-05-05T19:12:00.000Z In this guide we walk you through how to add LDO-ETH liquidity using [SushiSwap Onsen](https://sushi.com/?ref=blog.lido.fi), whilst staking your SLP tokens for added rewards. A new [LDO-ETH liquidity pool](https://app.sushi.com/legacy/add/ETH/0x5A98FcBEA516Cf06857215779Fd812CA3beF1B32?chainId=1&ref=blog.lido.fi) has been added to the [SushiSwap](https://sushi.com/?ref=blog.lido.fi) Onsen menu. Users that provide LDO-ETH liquidity into this pool will start receiving liquidity mining rewards - in the form of $SUSHI - whilst maintaining their exposure to LDO/ETH. [Onsen](https://app.sushi.com/farm?chainId=1&ref=blog.lido.fi) is a secondary product launched by SushiSwap in order to initiate liquidity mining incentives on their platform. These liquidity pools allow for future interoperability opportunities within the emerging DeFi ecosystem, whilst simultaneously improving market efficiency for the selected variety of endorsed tokens. ## Summary - Provide liquidity in the Onsen LDO-ETH pool to earn fee rewards. - Stake your liquidity tokens to earn rewards in the form of SUSHI tokens. - Retain your exposure to LDO/ETH. - Unstake whenever you decide to. ## How does Onsen work? SushiSwap Onsen hosts various external protocols to their very own hot springs (liquidity pools) to actively encourage users of these external protocols to stake their native tokens as liquidity. To participate in the Onsen pool, users must provide a 50/50 split of LDO and ETH/WETH. In exchange for users providing their native tokens as liquidity (which in our case is LDO), Onsen rewards users who are supplying liquidity to their Onsen pools with continual rewards, embodied in their very own native token: SUSHI. In doing so, Onsen liquidity pools remain liquid – allowing for efficient swaps with low slippage – and will facilitate itself as a large liquidity provider to users who want to swap in and out of their positions. Please be aware of the risks involved, namely [*impermanent loss*](https://blog.bancor.network/beginners-guide-to-getting-rekt-by-impermanent-loss-7c9510cb2f22?ref=blog.lido.fi). ## How to provide liquidity with SushiSwap Onsen Users can provide pool liquidity on Uniswap to improve the LDO market efficiency and earn token rewards. Liquidity providers get a split of trading fees corresponding to their “pool share”. 1. Head over to the [LDO-ETH Onsen pool](https://app.sushi.com/legacy/add/ETH/0x5A98FcBEA516Cf06857215779Fd812CA3beF1B32?chainId=1&ref=blog.lido.fi). 2. Select the “+ Liquidity” button. 3. Select the LDO and ETH/WETH token amounts you would like to add to the liquidity pool. Note you must provide 50/50 LDO and ETH. 4. Confirm your choice by pressing **Supply**. 5. A notification box will appear confirming the amount of LDO/ETH Pool Tokens you will receive. Press **Confirm** **Supply** when ready. 6. Confirm using your Ethereum wallet. 7. Once confirmed you will be supplying liquidity to the LDO/ETH pool, and you will see a corresponding LDO/ETH Pool Token balance in your wallet. ![](https://lh6.googleusercontent.com/S8zfu3-B-Yyqy9zVbAe73ZK-ag75fdxzOeT_KfmcbBWB4ZhaCh2ekvK978axx7cyAC6JfXtL7O_fmGfexmns7fffBiA0k_pUsckdT9JIJcqGh6x0LqkGl1EjR4mFhcr_8YBa4w-j) Providing LDO/ETH liquidity with SushiSwap Onsen To remove liquidity, visit the [LDO SushiSwap pair](https://blog.lido.fi/liquidity-mining-with-sushiswap-onsen/sushiswap.fi/pair/0xc558f600b34a5f69dd2f0d06cb8a88d829b7420a) and choose ‘**\- Liquidity’** in the right-hand form. Choose the amount of liquidity to remove and press **Remove** when ready. Please note that your tokens must be unstaked before you are able to remove them from the LDO/ETH liquidity pool. ## How to stake your LDO/ETH Pool Tokens Liquidity Providers can multiply their earnings and earn additional $SUSHI token rewards - up to 16% APY at the time of writing - by staking their LDO/ETH Pool Tokens which they received for adding pool liquidity. 1. To get started, visit [sushiswap.fi/farms/special](https://app.sushi.com/farm?filter=portfolio&chainId=1&ref=blog.lido.fi) and find the LDO pool. 2. On the right hand side, press **Approve Staking**. Confirm the choice with your Ethereum wallet. 3. Following a successful transaction, you will be able to stake your LDO-ETH SLP Tokens. 4. On the right hand side again, press **Stake**. 5. A pop-up box will now appear - enter the LDO-ETH SLP amount you want to stake and press **Confirm**. Confirm the transaction in your wallet. 6. Upon confirmation of the transaction, you will now be staking your LDO-ETH SLP Tokens entitling you to a token fee share as well as $SUSHI tokens. 7. Visit [sushiswap.fi/farms/special](https://app.sushi.com/farm?filter=portfolio&chainId=1&ref=blog.lido.fi) to view/confirm your staked balance. 8. To unstake, press **Unstake** and enter the amount of LDO-ETH SLP tokens to unstake. Confirm the transaction when ready. ![](https://lh5.googleusercontent.com/e6HjHYEbPoGnGmQ1VyQSGkh88uAcQnTKsYzN5Au78fPtzkvpxmOWUdrssK69ovlUC2j803pzsPdfkpzX3GiovCJ21mM1Wh0kIVlFrSSNMYOLRO16NQ_wihhnZSAIQv3_XqJrXeJA) ## Track your SushiSwap Rewards To track your rewards, visit [sushiswap.fi/portfolio](https://app.sushi.com/ru/farm?chainId=1&ref=blog.lido.fi). On this page you will be able to view the following: 1. Your Total wallet balance 2. Sushi Balance 3. Liquidity Positions 4. Farm Value These components are described in more detail below. ![](https://lh6.googleusercontent.com/ybehyh5vQs5YOV4IJq2ZOObNkQ61CxT7Sq-2DPOCVI5HrnNiQKGUPB2rLfExgU98iiECX6O-Qvu0IeshDlylK18GuIcmmWHXi04uSt4wfcIS3nMTPfrUNmZ1dMuCQTMRK9JHeYlR) 1\. Your **Total Wallet Balance** is the combined value of your Sushi Balance, Liquidity Position and Farm Value, including both your staked and unstaked tokens within SushiSwap. 2\. Your **Sushi Balance** represents your total balance of SUSHI tokens, including those that are **Harvestable**, **Locked (⅔)**, **Unstaked** and **Staked**. - **Harvestable**: Your share of earned SUSHI tokens (earned from staking) which are free to transfer/trade immediately. This represents ⅓ of your earned staking rewards. - **Locked (⅔)**: The last ⅔ of your earned staking rewards are vested for 6 months. After 6 months these tokens become *Harvestable* and are thereby free to trade/transfer. - **Unstaked**: The share of your SUSHI tokens which are currently unstaked and not earning xSUSHI. - **Staked**: The share of your SUSHI tokens which are currently staked and earning xSUSHI. xSUSHI is a token similar to SLP tokens which you receive in exchange for staking your SUSHI. 3\. Your **Liquidity Positions** displays the share of tokens which you are adding to the LDO-ETH/WETH Liquidity Pool, including your original balance as well as any earned fees. Your earned fees are a product of the pool trading volume, together with your share of the pool. Please note that if you are staking your LDO-ETH SLP Tokens (to earn additional SUSHI rewards), they will not be displayed in this section. 4\. Your **Farm Value** displays the value of your staked LDO-ETH SLP Tokens, including your Rewards (SUSHI rewards from staking) and P/L (fees earned from providing pool liquidity). ## How to attain LDO beforehand Users can purchase LDO beforehand and afterwards supply it as liquidity to the Onsen pool. Current markets include [1inch](https://1inch.com/swap?src=1:ETH&dst=1:LDO&ref=blog.lido.fi), [Uniswap](https://app.uniswap.org/?ref=blog.lido.fi#/swap) and [more](https://coinmarketcap.com/currencies/lido-dao/markets/?ref=blog.lido.fi). Alternatively, there is another liquidity mining event currently happening. Users can [supply stETH as liquidity via Curve](https://blog.lido.fi/providing-steth-liquidity-via-curve-to-receive-rewards/) in order to earn LDO. This opens up the possibility of an experimental strategy where liquidity providers can stake their stETH into [Curve](https://curve.fi/?ref=blog.lido.fi), farm LDO alongside CRV and trading fees, swap CRV into WETH, and then deposit LDO and WETH into the Onsen LDO-ETH liquidity pool to accrue SUSHI. Ultimately at the end, the strategy can also swap this SUSHI back into stETH to deposit back into Curve to accrue even more rewards. This strategy allows for liquidity providers who do not mind taking on more risk to earn even more rewards. This is a solid example of interoperability that is emerging in separate DeFi platforms within the greater DeFi ecosystem, a fundamental principle that Lido strongly maintains and intends to affirm with many other DeFi platforms and protocols. ## Learn More - [What is Lido?](https://blog.lido.fi/introducing-lido/) - [How Lido works.](https://blog.lido.fi/how-lido-works/) - [Stake with Lido.](https://stake.lido.fi/?ref=blog.lido.fi) - [Understanding SushiSwap Onsen.](https://forum.sushiswapclassic.org/t/simp-2-onsen/1546?ref=blog.lido.fi) ### Lido Development Update / 1 Month of Lido URL: https://blog.lido.fi/lido-development-update-one-month-of-lido/ Last updated: 2026-08-21T15:47:53.000Z Today marks the one month anniversary since the [launch of Lido](https://twitter.com/LidoFinance/status/1340105993020198920?ref=blog.lido.fi). 🏝️ It has been an amazing month and we have been overwhelmed by the continuous support we have received from the Ethereum community. Below we have collected a few of the most exciting developments which have taken place over the past month. ## Staking It has been exactly one month since we launched liquid Ethereum staking using [stake.lido.fi](http://stake.lido.fi/?ref=blog.lido.fi). The process is simple - instead of running complex validation infrastructure, stakers can send their ETH to the Lido smart contracts to manage staking for them. In exchange, users receive stETH - a token representing their staked ether - which they can send and trade as they would any other token. stETH undergoes a balance rebase daily (at 12pm UTC) where a user's balance is updated with their Ethereum staking rewards. Over the last 30 days, we have seen: - 76,600.35 ETH staked with Lido, with a total USD value of $93,454,474.41, positioning Lido as the leading liquid Ethereum staking solution. ![](https://blog.lido.fi/content/images/2021/01/Screenshot-2021-01-20-at-18.22.46.png) - 1,816 users staking their Ethereum with Lido, with approximately 21.64 stETH in rewards paid out to stakers. - The exchange rate between ETH and stETH has remained strong. Following a few days of minor fluctuations, the peg is now steadily returning back to 1:1 across key markets. ![](https://lh6.googleusercontent.com/5voNp9WQ9Ak8szBVhqBv1UFmcimab8ZnNQKtJIBF3_U3snsnLtbtenwPyFaKkp9lgGdyWBBn1g7NUM10VeyCeNR-0ucmY-U4Igw43V7u8JwANLJS89HgoA8GMVV4GnQuKK7IDbYt) - Lido’s validators activated, allowing stETH holders to earn daily Ethereum staking rewards. - A [public Lido dashboard](https://pro.nansen.ai/lido?ref=blog.lido.fi) added to Nansen.ai, allowing users to track Lido staking metrics in real-time. The feedback since launch has been fantastic and we are eager to build upon this initial success. ## Integrations A core aspect of Lido and stETH is the multitude of integrations which offer stakers additional rewards on their staked ether. With these integrations, users can participate in the DeFi ecosystem whilst still accruing Eth2 rewards earned from staking during Phase 0. In the past month we have seen successful integrations across Curve, 1inch, Argent and a number of other platforms, and we’re looking forward to further integrations across e.g. Aave, Maker and similar platforms in the near future. - Lido’s staked ETH (stETH) has been successfully integrated across [Curve Finance](https://www.curve.fi/?ref=blog.lido.fi), [1inch](https://1inch.com/?ref=blog.lido.fi) and [Uniswap](https://uniswap.org/?ref=blog.lido.fi). - stETH was added to [imToken](https://twitter.com/imTokenOfficial/status/1340906804847337473?ref=blog.lido.fi), [Trust Wallet](https://twitter.com/TrustWalletApp/status/1349326865413124096?ref=blog.lido.fi), [Argent Wallet](https://www.argent.xyz/blog/liquid-eth-staking-in-argent/?ref=blog.lido.fi) and [Zerion](https://twitter.com/zerion%5Fio/status/1349698429191131143?ref=blog.lido.fi) allowing users to stake with Lido directly from their Ethereum wallet. - Proposals have been created to list stETH across [Aave](https://governance.aave.com/t/proposal-add-support-for-steth-lido/2123?ref=blog.lido.fi) and [Maker](https://forum.makerdao.com/t/steth-mip6-collateral-onboarding/5762?ref=blog.lido.fi), allowing for the use of stETH as collateral within the DeFi space. - A [Yearn St. Ether](https://twitter.com/bantg/status/1342403059599740928?ref=blog.lido.fi) vault was developed by Banteg, undoing the rebasing aspect of stETH to improve integrations across LP protocols. - Lido was added as a liquidity provider on the [keep3r.network](https://keep3r.network/?ref=blog.lido.fi). - An experimental [Yearn](https://yearn.fi/?ref=blog.lido.fi) st. Ether-ETH Pool strategy was developed by Sam Priestley. This strategy deposits stETH/ETH into Curve LP, farms and sells rewards for ETH/stETH, then restakes those earnings back into Curve - allowing liquidity providers in the stETH/ETH Curve pool to automatically compound their rewards. ## DAO The Lido DAO launched last month and has been actively voting across a number of topics. Stop by [research.lido.fi](http://research.lido.fi/?ref=blog.lido.fi) to share your thoughts on our governance discussions and don’t hesitate to chime in if there’s a topic you find relevant. - Lido went through a [withdrawal key ceremony](https://blog.lido.fi/lido-withdrawal-key-ceremony/) where various participants of the DeFi space engaged in improving the security infrastructure of Lido. - Lido’s governance token - [LDO](https://twitter.com/LidoFinance/status/1346521421841887232?ref=blog.lido.fi) \- was distributed to DAO members, developers, backers, key holders and early stETH adopters. - The Lido DAO successfully completed voting across [39 unique proposals](https://mainnet.lido.fi/?ref=blog.lido.fi#/lido-dao/0x2e59a20f205bb85a89c53f1936454680651e618e/) related to node operator additions, validator numbers, user airdrops and token initiatives. - An LDO airdrop was voted through by the Lido DAO distributing 0.4% of total LDO supply to early Lido stakers. - A vote was passed to [distribute 0.5% of total LDO](https://twitter.com/LidoFinance/status/1347937197727559689?ref=blog.lido.fi) supply to reward stETH liquidity providers on Curve across a 30-day period (ending February 13th). - There’s an ongoing discussion of a [transparent, predictable emission schedule](https://research.lido.fi/t/transparent-predictable-emission-schedule/187/9?ref=blog.lido.fi) for LDO to improve clarity surrounding LDO issuance. - Lido is discussing [topping up Ethereum stakers with LDO](https://research.lido.fi/t/counteract-currently-low-reward-rate-with-ldo-emissions/194/3?ref=blog.lido.fi) tokens to counteract an initially low staking rate. - The Lido Node Operator Admission ceremony is under development with the [key admission criteria](https://research.lido.fi/t/discussion-on-node-operator-admission-criteria-and-process/203/3?ref=blog.lido.fi) being finalised. - A number of validators submitted proposals to participate as node operators for Lido: [P2P Validator](https://research.lido.fi/t/node-operator-admission-p2p-validator/46/2?ref=blog.lido.fi), [Chorus One](https://research.lido.fi/t/node-operator-admission-chorus-one/44/2?ref=blog.lido.fi), [AlphaVirtual](https://research.lido.fi/t/node-operator-admission-alpha-virtual/54?ref=blog.lido.fi), [Everstake](https://research.lido.fi/t/node-operator-admission-everstake/178?ref=blog.lido.fi), [blockscape](https://research.lido.fi/t/node-operator-admission-blockscape/136?ref=blog.lido.fi), [InfStones](https://research.lido.fi/t/node-operator-admission-infstones/197?ref=blog.lido.fi), [FreshLido](https://research.lido.fi/t/node-operator-admission-freshlido/129?ref=blog.lido.fi). ## Community We’ve seen a number of fantastic community initiatives implemented this month, ranging from innovative UIs and comprehensive liquidity guides. We’ve summarised the best below: - A fantastic UI was created for the Yearn Lido St. Ether Vault – [lido.ape.tax](https://lido.ape.tax/?ref=blog.lido.fi) – developed by [@pshenichnyy](https://twitter.com/pshenichnyy?ref=blog.lido.fi) and [@kadmil\_eth](https://x.com/kadmil%5Feth?ref=blog.lido.fi) of Lido. - A comprehensive video tutorial for staking stETH using Curve was created by [@gabrielhaines](https://twitter.com/gabrielhaines?ref=blog.lido.fi). In case you missed it, check it out [here](https://www.youtube.com/watch?v=yYPDSfUCl-o&feature=youtu.be&ref=blog.lido.fi). - Lido’s following on [Twitter](https://twitter.com/LidoFinance?ref=blog.lido.fi) has surged to 10.3k followers since our launch. - A [short video guide](https://www.youtube.com/watch?v=tn95x1RHH1w&ref=blog.lido.fi) explaining easy methods on how to stake ETH in Ethereum 2.0 was created by The Defiant. Lido - alongside our integrated wallet partner, Argent - was briefly mentioned. ## Media - The Block covered our funding round and launch of our DAO with a piece titled “[Eth2 staking protocol Lido raises $2 million in new funding](https://www.theblockcrypto.com/linked/87761/eth2-staking-protocol-lido-raises-2-million-funding?ref=blog.lido.fi)”. - Lido’s journey, together with our Yearn integration, was covered by Coindesk in a recent article titled “[Lido Protocol Does Eth 2.0 Staking but With a DeFi Twist](https://www.coindesk.com/lido-protocol-does-eth-2-0-staking-but-with-a-defi-twist?ref=blog.lido.fi)”. ## The Month Ahead It’s been a thrilling month and there are no signs of Lido slowing down. There are a lot of exciting things to come in the month ahead with a focus on integrations and growing the liquidity infrastructure surrounding stETH. In the meantime, head to [Curve](https://www.curve.fi/steth?ref=blog.lido.fi) to purchase stETH at a slight discount and contribute liquidity to the Lido ecosystem. In case you missed it, check out our guide to using Curve: [How To: Providing stETH liquidity via Curve](https://blog.lido.fi/providing-steth-liquidity-via-curve-to-receive-rewards/). ## Resources - [Stake with Lido](https://stake.lido.fi/?ref=blog.lido.fi) - [Twitter](https://twitter.com/lidofinance?ref=blog.lido.fi) - [Reddit](https://reddit.com/r/lidofinance?ref=blog.lido.fi) - [Telegram](https://t.me/lidofinance?ref=blog.lido.fi) - [Discord](https://discord.com/invite/vgdPfhZ?ref=blog.lido.fi) - [Blog](https://blog.lido.fi/) - [DAO forum](https://research.lido.fi/?ref=blog.lido.fi) - [Documentation](https://github.com/lidofinance?ref=blog.lido.fi) ### Guide: Providing Liquidity on Curve Finance URL: https://blog.lido.fi/providing-steth-liquidity-via-curve-to-receive-rewards/ Last updated: 2023-09-20T06:23:44.000Z [Curve Finance](https://curve.fi/?ref=blog.lido.fi) is an AMM/DEX built around stablepair exchange with low fees and slippage. Curve Finance uses [liquidity pools](https://resources.curve.fi/base-features/understanding-curve/?ref=blog.lido.fi) to facilitate peer-to-peer trades, rewarding liquidity providers with a share of trading fees and additional rewards to encourage this. As a non-custodial DeFi protocol, you maintain full control of your tokens when trading on Curve. Curve Finance has a highly liquid stETH/ETH market allowing [ETH stakers with Lido](https://lido.fi/ethereum?ref=blog.lido.fi) to swap between stETH and ETH in highly-efficient manner. In this guide, you'll learn how to provide liquidity to the stETH/ETH market on Curve, covering the following topics: - Providing liquidity in the Curve stETH pool and receive pool trading fees in CRV. - Retaining exposure to stETH to earn staking rewards. - Unstaking your [stETH](https://lido.fi/ethereum?ref=blog.lido.fi). ## How does Curve Finance work? The [stETH pool](https://curve.fi/?ref=blog.lido.fi#/ethereum/pools/steth/deposit) is a liquidity pool that contains stETH and ETH. Users can interact with these pools to purchase stETH or ETH with low slippage. Any trading fees from transactions that take place within this pool are paid out to liquidity providers in the form of CRV. Users who provide their liquidity to the stETH/ETH pool on Curve Finance will receive LP tokens in return. These LP tokens can then be staked into the Curve gauge to receive trading fees in CRV. ## Why provide liquidity on Curve Finance? Without liquidity pools for stETH, users cannot efficiently swap their stETH for ETH. This swapping between stETH and ETH effectively unstakes ETH from the Lido contract. Without liquidity pools, stETH holders need to go through the [Ethereum withdrawal](https://stake.lido.fi/withdrawals/request?ref=blog.lido.fi) process to unstake, which may face slight delays depending on withdrawal queues. To incentivize liquidity for stETH, liquidity providers will be rewarded for providing their tokens into the Curve liquidity pool. In this way, liquidity providers are incentivized to keep Lido liquid. ## Guide: Providing liquidity on Curve Finance ### How do I provide liquidity into Curve? - Visit [curve.fi/#/ethereum/pools/steth/deposit](https://curve.fi/?ref=blog.lido.fi#/ethereum/pools/steth/deposit) and connect your wallet. - Provide liquidity in the Curve stETH pool by clicking “Deposit & stake in gauge”. - Choose the proportion of ETH/stETH to stake. Once confirmed you will receive LP tokens in return and effectively become a Curve Finance liquidity provider (LP). These LP tokens should be automatically deposited into the gauge, and you will start receiving trading fees in CRV (base APY %) in real time. ![](https://blog.lido.fi/content/images/2023/09/Screenshot-2023-09-19-at-18.30.25.png) When you deposit stETH to Curve, your tokens are split between ETH and stETH, with the precise balances fluctuating constantly due to price trading. This is done automatically and does not affect your share of the LDO distribution. If your stETH is deposited but not yet staked, choose "Stake LP Tokens". Choose the amount of stETH/ETH LP tokens you want to stake. This can be unstaked anytime. Please note that when you stake your LP tokens - steCRV - using gauge, they will no longer be visible in your Metamask wallet. They will be visible again upon unstaking. ### How do I claim my rewards? Every time someone trades on this Curve pool you will receive trading fees in CRV. They are accrued automatically every trading transaction and you do not need to do anything here. To claim your rewards: - Visit the [Withdraw](https://curve.fi/?ref=blog.lido.fi#/ethereum/pools/steth/withdraw) page. - Here you can choose to either "Withdraw" or "Unstake" your tokens. To exit the pool entirely, click “Withdraw". Upon doing so you will receive your rewards and withdraw your tokens from Curve back to your chosen Ethereum wallet. ### How do I withdraw stETH from Curve Curve allows you to unstake and withdraw at any time, in the token of your choice. When unstaking from gauges you effectively unstake your stETH so you no longer earn steCRV tokens. - **Unstake**: To no longer stake your stETH in a Curve gauge to earn fees and additional steCRV LP tokens. - **Withdraw**: To withdraw your tokens from Curve to your wallet. After unstaking your tokens you can now withdraw them from Curve. - To exit the pool entirely, click “Withdraw and claim”. Upon doing so you will receive your rewards and withdraw your tokens from Curve back to your wallet. - Fill in the total amount of tokens you wish to withdraw (*share of liquidity*) or the precise token amounts (in ETH and stETH). You can also choose the combination of tokens to withdraw to your wallet - the split between ETH and stETH. Upon confirmation of withdrawal using your Ethereum wallet, your tokens will be withdrawn from Curve to your wallet. ## Frequently Asked Questions ### What is stETH? stETH is Lido's [liquid staked Ethereum token](https://www.lido.fi/ethereum?ref=blog.lido.fi). By holding stETH, you earn network rewards from Ethereum validator activities. ### Why should I deposit my stETH to Curve Finance? By depositing your stETH into Curve Finance and acting as a liquidity provider you earn a share of all trading fees on the stETH/ETH pair on Curve Finance. ### Are there any risks to being a liquidity provider on Curve? As with any DeFi protocol, there are a number of risks you need to be aware of when acting as an LP on Curve Finance. For a full overview of risks, check out '[Curve stETH Risks](https://classic.curve.fi/steth/risks?ref=blog.lido.fi)'. ## What’s Next? There are many plans for stETH to be used in a variety of DeFi protocols in the future such as lending protocols, farming strategy protocols, aggregators, and many more to come. These are outlined in more detail here: [Possible DeFi protocol integrations with Lido and their respective incentives](https://research.lido.fi/t/possible-defi-protocol-integrations-with-lido-and-their-respective-incentives/50?ref=blog.lido.fi). We highly encourage users to submit their proposals on the Lido forums to share their ideas to the community. ### Introducing LDO - The Lido DAO Governance Token URL: https://blog.lido.fi/introducing-ldo/ Last updated: 2026-06-24T11:36:13.000Z The LDO token governs all Lido DAO governance and network decisions to ensure its prolonged stability and decentralized decision-making to facilitate the growth of fair, trustless and transparent liquid staking. - LDO - the Lido DAO Governance token - is now live. - The LDO contract address is here: [etherscan.io/token/0x5a98fcbea516cf06857215779fd812ca3bef1b32](https://etherscan.io/token/0x5a98fcbea516cf06857215779fd812ca3bef1b32?ref=blog.lido.fi) - For now, founding members of the Lido DAO have LDO tokens. These are locked for 1 year, after which they will be vested over 1 year. - 36% of LDO are unlocked in the [DAO treasury](https://blog.lido.fi/lido-dao-treasury-fund/). Anyone can make a proposal on how they can be used. If you have any initiatives you think will benefit the Lido protocol, share your thoughts in our governance platform: [research.lido.fi](https://research.lido.fi/?ref=blog.lido.fi). The Lido DAO is pleased to announce the distribution of the LDO token - the Lido DAO governance token. LDO has been distributed to early stakers across Lido. To check your balance, visit [airdrop.lido.fi](https://airdrop.lido.fi/?ref=blog.lido.fi). ## Lido Ecosystem & DAO overview Lido is a DAO community which builds a liquid staking service for Ethereum. Inspired by the growth of the Ethereum ecosystem, Lido lets users stake their ETH tokens in a non-custodial and transparent manner to contribute to the stability of the Ethereum ecosystem as a whole. Lido’s Ethereum staking protocol has been built as a DAO to preserve Lido’s upgradability and stability whilst maintaining decentralised infrastructure. The Lido DAO governs a set of liquid staking protocols, deciding on Lido’s key parameters whilst spearheading Lido network upgrades. Members of the Lido DAO have the responsibility to govern Lido to maintain its ongoing efficiency and contribute to the overall growth of the Lido community. There exist a number of reasons for why a DAO is the most optimal structure for Lido. Lido as a service is highly dependent on the development of the Ethereum beacon chain and its staking protocol. With a number of uncertainties surrounding the roll-out of Eth2.0, Lido is required to be upgradable. When faced with these uncertainties, the DAO-based governance approach will allow for Lido to remain flexible and adjust its staking service as necessary. In addition to this, Lido’s design as a DAO will allow for the accumulation of service fees which can be managed and distributed transparently to cover development and insurance costs in a manner aligned with community interests. With the mission to make staking simple, liquid, and decentralized for the end user, the Lido DAO has the following responsibilities: - Launching Lido: - Deploy protocol smart contracts; - Set fees and other protocol parameters; - Select the threshold signature scheme participants among reputable individuals or organizations willing to provide the service; - Facilitate the multi-party computation ceremony to create the threshold signature account for staking rewards; - Assign initial DAO-vetted node operators. - Propose and update Lido’s parameters; - Approve incentives for parties that contribute towards DAO’s goals (e.g., stETH liquidity providers); - Propose and update Lido’s implementation for incoming Ethereum 2.0 features using DAO treasury funds; - Assign oracles to deliver reward/slashing rate feed to help establish stETH token balances; - Scout and qualify new node operators and penalize the existing ones slashed by Ethereum 2.0’s rules; - Manage the Lido DAO’s insurance and development funds; - Manage unbonding and withdrawals once available in Ethereum 2.0; It is our belief that a DAO is the optimal approach to launching Lido, balancing the benefits of full centralisation and decentralization to provide the most adaptable experience for users of Lido. The Lido DAO is actively voting on a number of parameters, including the addition of node operators and the number of validators for each node operator. The votes can be tracked in real-time on [mainnet.lido.fi](https://mainnet.lido.fi/?ref=blog.lido.fi#/lido-dao/0x2e59a20f205bb85a89c53f1936454680651e618e/). ## The LDO token Our mission with the Lido DAO is to distribute all decision-making to create a trustless staking service built around community-growth and self-sustainability. This is achieved through the LDO governance token. The launch of LDO is a significant step towards achieving this goal, driving decentralised ownership and facilitating development of a distributed, independent governance structure to lead the Lido DAO. To have a vote in the Lido DAO, and to contribute to the determination of any of the topics outlined above, one must hold the LDO governance token. Holding LDO gives DAO members a vote in the future of Lido, allowing each DAO member to have a personal say in the community. LDO voting weight is proportional to the amount of LDO a voter holds. The more LDO a user holds, the greater the decision-making power the voter gets. The exact mechanism of LDO voting can be upgraded just like the other DAO applications. The LDO token will be used across all current and future DAO [votes](http://mainnet.lido.fi/?ref=blog.lido.fi), giving every token holder a say in the direction and growth of the Lido DAO. ## LDO Token Allocation Upon the launch of the Lido DAO, 1 billion LDO tokens were minted. At time of writing, founding members of the Lido DAO possess 64% of LDO tokens. These are locked for 1 year, after which they will be vested over 1 year. At the time of writing, the only unlocked LDO in existence are 0.4% airdrop distributed to early stakers and DAO treasury tokens. Anyone can make a proposal on how they can be used via [research.lido.fi](http://research.lido.fi/?ref=blog.lido.fi). The allocation of these tokens is as follows: - DAO treasury - 36.32% - Investors - 22.18% - Validators and signature holders - 6.5% - Initial Lido developers - 20% - Founders and future employees - 15% ## LDO Emission Schedule With the recent [proposal](https://research.lido.fi/t/proposal-ldo-treasury-diversification-part-2/506/2?ref=blog.lido.fi) for LDO treasury diversification to institutional and angel investors, community members are asking about future LDO token distributions that will take place afterwards. This article post is for sake of clarity. There is currently no concrete emission/release schedule for LDO tokens residing in the treasury fund. As per a previous article [post](https://blog.lido.fi/lido-dao-treasury-fund), Lido intends to distribute the supply of LDO in the treasury fund to help fund ecosystem development where opportunities may arise. All of these distributions will be completely discussed transparently to the community beforehand, utilizing snapshot votes to probe sentiment. Token distributions range from a variety of developmental purposes, (eg. liquidity provider rewards, integrations/partnerships with other projects, securing lido through slashing insurance, etc). **LDO Circulating Supply** - 4,800,000 (Curve 4th emission LPs) - 240,000 (LEGO treasury for grants) - 500,000 (DeversiFi liquidity markets) - 5,000,000 (Curve 3rd emission LPs) - 100,000 (ARCx LP rewards) - 250,000 (1inch LP rewards) - 50,000 (Unslashed Finance insurance) - 5,000,000 (Curve 2nd emission LPs) - 5,000,000 (Curve 1st emission LPs) - 4,000,000 (Airdrop rewards) *\* These numbers are updated on a weekly basis.* Founding members are also distributed LDO, with the respective amounts: 221,800,000 LDO for investors, 65,000,000 LDO for validators and signature holders, 200,000,000 LDO for initial Lido developers, and 150,000,000 LDO for founders and future employees. They will have their LDO tokens unlocked on December 17, 2021, followed by a one year vesting period. These restrictions apply to developers, validators, investors, founders and employees. ## LDO - Frequently Asked Questions ### How do I get LDO? LDO is available on a variety of exchanges such as Uniswap, SushiSwap, 1inch, DeversiFi, Hoo, Hotbit and Bilaxy. ### What’s the token release schedule for LDO? There is currently no concrete emission/release schedule for LDO tokens residing in the treasury fund. As per a previous article [post](https://blog.lido.fi/lido-dao-treasury-fund), Lido intends to distribute the supply of LDO in the treasury fund to help fund ecosystem development where opportunities may arise. All of these distributions will be completely discussed transparently to the community beforehand, utilizing snapshot votes to probe sentiment. ### When will the LDO rewards on Curve end? The rewards will continue until the 12th of May. The Curve rewards are voted on by the Lido DAO on a monthly basis. Expect a proposal and vote to continue rewards before the end of current rewards. ### Can I stake LDO? You currently cannot stake LDO. You can, however, provide LDO as liquidity in respective liquidity mining programs (eg. SushiSwap, 1inch). ### What are the use cases for LDO? The LDO token is the governance token for Lido DAO. It is used to vote on protocol parameters and govern the constantly growing Lido DAO treasury. You can learn more here: [blog.lido.fi/introducing-ldo/](https://blog.lido.fi/introducing-ldo/) ### What is the LDO vesting period? The tokens can be used for governance purposes but can’t move for one year from Dec 2020\. In the year after that they will be unlocked and vested linearly on a per-block basis (so, in 1 year and 1 day about 0.3% of their total will be unlocked). ### Why are transfers of LDO tokens more expensive than other ERC20 tokens? LDO tokens cost more when transferring because it's a Minime ERC20 token - for its usage with the Aragon DAO features - which has a bit more expensive mechanics under the hood. It has to track the balance history to prevent "vote-transfer-vote again" exploit. ## What’s Next If you haven’t already, stake your Ethereum using Lido on [stake.lido.fi](https://stake.lido.fi/?ref=blog.lido.fi). ### Guide: Staking Ethereum With Lido URL: https://blog.lido.fi/staking-ethereum-with-lido/ Last updated: 2026-06-24T11:41:15.000Z Lido is live! You can now stake your ETH with Lido to contribute to the security of the ETH network whilst earning daily rewards for doing so. Visit stake.lido.fi to get started. 🏝️ ## Summary - Stake Ethereum with Lido to earn up to a maximum of 18.10% a year in staking rewards. - Stake whatever amount you want - there are no minimum Ethereum staking deposits with Lido. - Receive stETH when staking - a tokenised version of your staked ETH - which value updates daily to reflect your earned staking rewards. - Stake directly from your Metamask, Ledger or other wallet of preference. - When you stake with Lido you stake across a set of proven validators with a track-record of excellence in the field of staking to minimise slashing and hostage risks. ## What is Lido Lido is a liquid staking solution for ETH 2.0 backed by a number of the industries leading blockchain staking providers. Lido allows users to stake any amount of ETH - without the need to maintain complex infrastructure - whilst preserving the liquidity of their ETH through the stETH token. This lets users stake their ETH whilst participating in on-chain activities of their choice, e.g. lending and farming. When you stake with Lido you receive stETH tokens on a 1:1 basis representing your staked ETH. This stETH balance can be used like regular ETH to earn lending rewards, and are updated on a daily basis to reflect your ETH staking rewards. The goal with Lido is to solve a number of the problems associated with ETH 2.0 staking - illiquidity, immovability and accessibility - making staked ETH liquid and allowing for network participation with any amount of ETH. ## How to stake Ethereum with Lido **1.** Visit [stake.lido.fi](https://stake.lido.fi/?ref=blog.lido.fi) and press 'Connect Wallet'. **2.** When shown wallet options, choose preferred option. With your wallet connected you should be able to view your ETH balance within the Lido widget. **3\.** Enter the amount of ETH you want to stake. When ready, press Stake. Note that you will be able to view your Transaction Fee, stETH Balance and Annual Percentage Rate prior to confirming. **4\.** Confirm the transaction in your wallet. **5\.** Your wallet now contains the amount of ETH you staked - in stETH - visible in your wallet. Your stETH balance is updated daily to reflect staking rewards. ![](https://blog.lido.fi/content/images/2020/12/Staking-with-Lido.gif) Staking your ETH using [Lido](https://stake.lido.fi/?ref=blog.lido.fi) ### Ethereum staking rewards The Ethereum staking reward rate is variable and changes based on the total amount of ETH staked. If the total amount of ETH staked is low then the reward rate will be higher, with a maximum annual reward rate of 18.10%. ![](https://blog.lido.fi/content/images/2020/12/Screenshot-2020-12-19-at-18.54.39.png) Ethereum staking rewards To track the current Ethereum staking rate, visit [stakingrewards.com/earn/ethereum-2-0](https://www.stakingrewards.com/earn/ethereum-2-0?ref=blog.lido.fi). ### Lido staking fees Lido applies a **10% fee** on staking rewards, split between node operators, the DAO and Reserve Fund. This fee can be changed by the DAO pending a successful vote. If you have a question, stop by the [Lido Staking FAQ](https://help.lido.fi/en/collections/2946726-general?ref=blog.lido.fi). If you can't find what you're looking for then we encourage you to submit a question. If you're having trouble staking your Ethereum using Lido, please refer to the following guide: - [Stake Ethereum using Metamask](https://help.lido.fi/en/articles/5230600-staking-eth-using-metamask?ref=blog.lido.fi) - [Ethereum staking fees](https://help.lido.fi/en/articles/5230596-what-fee-is-applied-by-lido-what-is-this-used-for?ref=blog.lido.fi) ## Using your stETH token When you stake ETH with Lido you receive stETH to reflect your staked Ethereum. This stETH token represents your staked ETH, with its value changing daily to reflect earned staking rewards. Once transactions are enabled on Eth2, you can redeem your staked ETH using your stETH. - **Contract address**: [0xae7ab96520DE3A18E5e111B5EaAb095312D7fE84](https://etherscan.io/address/0xae7ab96520de3a18e5e111b5eaab095312d7fe84?ref=blog.lido.fi) - **Symbol**: stETH - **Decimals**: 18 **If you are having trouble viewing your stETH balance after staking, follow these instructions:** [**Adding stETH To Metamask**](https://help.lido.fi/en/articles/5230599-why-can-t-i-see-my-steth-on-metamask?ref=blog.lido.fi)**.** stETH is a liquid token which can be traded, sent, lent and more, allowing you to participate in DeFi activities even after staking. ## What's next? Over the coming weeks we will be seeing the growth of the Lido and stETH ecosystem, with stETH evolving as a building block for other applications and protocols. As more and more applications begin to allow for interaction with stETH, the benefits of liquid Ethereum staking will become more and more obvious. In addition to this we aim to see the growth in [Lido DAO discussions](https://research.lido.fi/?ref=blog.lido.fi), with incoming proposals on validator admissions, fee distributions and more. Have a suggestion you'd like discussed? Submit it!f ## The Lido DAO community Let's connect! If you have any questions, suggestions, concerns or feedback, we'd love to hear from you. - [Twitter](https://twitter.com/lidofinance?ref=blog.lido.fi) - [Lido DAO Forum](https://research.lido.fi/?ref=blog.lido.fi) - [Telegram](https://t.me/lidofinance?ref=blog.lido.fi) | [Announcements](https://t.me/lidonews?ref=blog.lido.fi) - [Discord](https://discord.com/invite/vgdPfhZ?ref=blog.lido.fi) - [Reddit](https://www.reddit.com/r/LidoFinance/?ref=blog.lido.fi) - [Github](https://github.com/lidofinance?ref=blog.lido.fi) - [Lido Primer](https://lido.fi/static/Lido:Ethereum-Liquid-Staking.pdf?ref=blog.lido.fi) ### The Lido Withdrawal Key Generation Ceremony URL: https://blog.lido.fi/lido-withdrawal-key-ceremony/ Last updated: 2023-09-22T13:29:47.000Z The [Lido](https://lido.fi/?ref=blog.lido.fi) DAOs first set of withdrawal keys were generated during a ceremony that took place between December 13th and 16th, 2020, performed by a group of the industry’s most trusted builders. Chorus One, Staking Facilities, Certus One, Argent, Banteg (yearn.finance), Alex Svanevik (Nansen), Anton Bukov (1inch), Michael Egorov (Curve/Nucypher), Rune Christensen (MakerDAO), Will Harborne (DeversiFi) and Mustafa Al-Bassam (LazyLedger) came together over a four-day event to generate threshold signatures for Lido’s withdrawal keys in a secure environment on air-gapped machines. Everything went smoothly and participants and the broader Ethereum community are thanked for their efforts and constant support. > After a lot of QR code scanning and a couple of sleepless night, the distributed key generation ceremony for [@lidofinance](https://twitter.com/lidofinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) is complete. > > DKG identifier: ae7f71bb34b74eab0cea8c2931d4b0b2 > PubKey: tnrKcfBLZzA3tUAJt2Dxlh84NuVxQUHIkq/bdewINNzmeE2ccu2K19syjP+P6fE+ [pic.twitter.com/6umMmEUJ9j](https://t.co/6umMmEUJ9j?ref=blog.lido.fi) > > — banteg (@bantg) [December 15, 2020](https://twitter.com/bantg/status/1338914169408655365?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) **DKG identifier**: ae7f71bb34b74eab0cea8c2931d4b0b2 **PubKey**: tnrKcfBLZzA3tUAJt2Dxlh84NuVxQUHIkq/bdewINNzmeE2ccu2K19syjP+P6fE+ ### Why was a ceremony necessary? [Ethereum 2.0](https://ethereum.org/en/eth2/?ref=blog.lido.fi) doesn’t have any contract execution functionality right now, which means you can’t deploy smart contracts or set up a multisig. When you stake your ETH you need to specify an ETH 2.0 key called withdrawal credentials. In order to make liquid staking work, a solution was necessary for who will hold this key and, more importantly, how to transition it to the Lido DAO. That is why a distributed custody solution for the beacon chain was developed by Lido and audited by Sigma Prime: [https://github.com/lidofinance/dc4bc](https://github.com/lidofinance/dc4bc?ref=blog.lido.fi). All deposits into Lido are delineated by 32 ETH and assigned to node operators who validate using these deposits. Funds are deposited to the Lido protocol smart contract and then are locked into the Ethereum proof-of-stake deposit contract. Initially, withdrawal credentials for deposited ether will be set to Lido’s threshold signature of distributed custody. This threshold signature account controlled by the Lido DAO is specified as a staking withdrawal address. In practice, this means that users would need to trust this withdrawal address to return the ETH to which they have a claim. This is not the preferred solution but is a (temporary) reality for all the liquid staking protocols due to ETH 2.0’s staking design, and so it was designed and developed in the way that seemed like the best practical solution at the time. The reason Lido’s participants went to the lengths of a several-day distributed custody key generation event was to decrease the amount of trust required. The withdrawal key was split into 11 different parts, each held by a different participant. Instead of one party now having access to these withdrawal keys, it would instead require collusion of many parties from those who participated in the ceremony. Many other liquid staking protocols are instead relying on a single party to hold these keys which is believed to be an inferior solution. > Verifying: I have submitted my public keys for participation in the Distributed Key Generation ceremony for [@lidofinance](https://twitter.com/lidofinance?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) withdrawal credentials: lI+5jYVEif+dmJpWAi0v2eZd0oAQ3yMHQ7/cF1cODbrkr/R0U0K6IgZX9INuhiNu [https://t.co/5rj43I6Wjs](https://t.co/5rj43I6Wjs?ref=blog.lido.fi) > > — Mustafa Al-Bassam (@musalbas) [December 13, 2020](https://twitter.com/musalbas/status/1338116087536291841?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) The preferred solution would require eth1 withdrawal addresses to be accepted by the Ethereum community. If/when this happens, the withdrawal credentials will instead be set to an upgradeable smart contract that will handle withdrawals when they are enabled -- an entirely non-custodial liquid staking solution. This should happen in the near future and the feasibility to migrate to this kind of solution as soon as it's practical will be evaluated from time to time. ### Why Lido’s distributed custody is a better approach Distributing custody based on threshold signatures by some of the most respected and reputable people in DeFi seems like a much better solution for Lido to adopt at this time than having the withdrawal credentials owned by one single holder. When it becomes technically feasible to transition to a fully non-custodial solution, the only purpose of this distributed custody will be to rotate withdrawal credentials to an autonomous withdrawal smart contract. ### Here's what is targeted in the future In the near future, when ETH 1 withdrawal credentials are available on ETH 2, Lido should move away from distributed custody to a fully non-custodial solution. The Ethereum community seems to recognise and agree that a fully centralised solution isn't the best choice to depend on for the security of the largest smart contract platform, and trusts Lido DAO and Lido to always provide the best feasible solution for the Ethereum liquid staking. Any feedback or questions on this is welcome. ### Stake with Lido Lido has launched. Stake with Lido now: [stake.lido.fi](https://stake.lido.fi/?ref=blog.lido.fi). ### Lido Testnet Launch URL: https://blog.lido.fi/lido-testnet-launch/ Last updated: 2023-09-22T13:29:37.000Z Lido is a liquid Ethereum staking solution letting you earn staking rewards with no lock-ups or minimum deposits whilst contributing to the security of the Ethereum 2.0 chain. We're thrilled to announce the launch of the Lido protocol testnet, which allows users to stake and convert testnet ETH to staked ETH(stETH). With this also comes the test launch of the Lido DAO governance tools for the Ethereum staking service. ## **Testnet Objectives** The testnet launch sees the deployment of contracts - on Goerli testnet - to test Lido in dynamic conditions and gain operational experience for participants. An added bonus is that the testnet will demonstrate the simplicity of staking Ethereum with Lido. Objectives with respect to Lido over the coming weeks are to: - Perform distributed key generation ceremony for withdrawal credentials, which will hold all Lido's staked ether; - Deploy the Lido DAO, distribute governance tokens, and set up all necessary parameters via DAO members voting procedures; - Assign and launch oracles, which are responsible for reporting cumulative Lido balances on the Ethereum 2.0 beacon chain to the smart contract; - Assign node operators to whom staking on the Ethereum 2.0 beacon chain will be delegated; and - Start accepting ether deposits in Goerli and check Lido’s operations. In addition to showcasing what has been developed, this testnet launch is an opportunity for Ethereum validators to demonstrate their expertise. Lido stakes through a set of proven validators and, in order to guarantee performance, the validators are best-in-industry. ## **Testnet Roadmap** The roadmap for the coming week is as follows: ### **Wednesday | Nov 25** - The first Lido signature generation ceremony is conducted. - The final testnet version of the protocol is deployed. - The [DAO Token Holder Manual](https://docs.google.com/document/d/1S0cLkS8r3YihZ3vTBsHYFqyIkOT-y-SKhxRIFAsb87E/edit?usp=sharing&ref=blog.lido.fi) is published. - DAO holders vote for initial protocol parameters and for the inclusion of Node Operators and Oracles. At this point, the protocol is ready to accept user funds. There will be a quick run for working validators to earn revenue as early as possible, given the clog in Pyrmont validator entry queue. - A Node Operator with 10 signing keys will be added and accepted by the DAO with the testnets orchestrators (combined, testnet orchestrators votes will reach the quorum to ensure the test run will run to completion). - The testnet orchestrators will perform DAO voting for setting the withdrawal credentials chosen during the ceremony. - Testnet orchestrators will submit 320 ETH and use the protocol to deposit them using the keys submitted in the first step. - One node operator is needed to assist with running that first validator node — please let us know if you’re willing to help. ### **Thursday | Nov 26** - The second, text-based, signature generation ceremony is started. This ceremony will last until Tuesday, Dec 1\. It won’t be used in the testnet, just generated. - Node Operator and Oracle manuals are published. - Oracle Committee Members deploy oracle daemons (at least 5 Oracle Committee Members). - Node Operators generate and submit signing keys (100 keys each, at least 6 operators). - Node Operators deploy validator clients for the submitted keys. ### **Friday | Nov 27** - DAO token holders vote for accepting the signing keys submitted by Node Operators. - DAO token holders initiate depositing the received and buffered user funds to the Beacon chain. ### **Saturday | Nov 28** - Monitoring the system working as intended and performing more deposits. ### **Monday | Nov 30** - Testing integration with Uniswap v1. ## **Testnet Resources** If you are interested in Lido’s progress or to try out testnet staking with Lido, please refer to the following resources: - [Lido: Ethereum Liquid Staking - A Primer](https://lido.fi/static/Lido:Ethereum-Liquid-Staking.pdf?ref=blog.lido.fi) - [Lido Github Repo](https://github.com/lidofinance?ref=blog.lido.fi) - [Developer Chat Support](https://discord.com/channels/761182643269795850/774313727603638292?ref=blog.lido.fi) - [Lido DAO Member Manual](https://docs.google.com/document/d/1S0cLkS8r3YihZ3vTBsHYFqyIkOT-y-SKhxRIFAsb87E/edit?usp=sharing&ref=blog.lido.fi) > Established operators including [@CertusOne](https://twitter.com/CertusOne?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi), [@ChorusOne](https://twitter.com/ChorusOne?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi), [@P2PValidator](https://twitter.com/P2Pvalidator?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi), [@stakefish](https://twitter.com/stakefish?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) & [@StakingFac](https://twitter.com/StakingFac?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) will join Lido as validators to launch liquid staking on Ethereum. [https://t.co/JOpq7egKrT](https://t.co/JOpq7egKrT?ref=blog.lido.fi) > > — Lido (@lidofinance) [November 18, 2020](https://twitter.com/lidofinance/status/1329151140718632961?ref%5Fsrc=twsrc%5Etfw&ref=blog.lido.fi) If you are an experienced validator interested in contributing to Lido, please get in touch. To register your interest in staking with Lido, [let us know](https://operatorportal.lido.fi/apply-to-be-a-lido-node-operator?ref=blog.lido.fi). ### How Lido’s validator choices help you avoid hostage ETH URL: https://blog.lido.fi/how-lidos-validator-choices-help-you-avoid-hostage-eth/ Last updated: 2026-06-24T11:39:34.000Z As we approach the launch of ETH 2.0, the significance of network validators is becoming more and more apparent. Validators - those who manage staking nodes across ETH 2.0 - are faced with a difficult task which, if not managed thoroughly, can have negative consequences for ETH stakers. It’s important that when you stake ETH, you select a professional and reputable node operator. There are two main risks associated with selecting a node operator: 1. Hostage years 2. Slashing risk We’ll discuss both shortly. These risks important considerations for the validators that will act as the backbone of Lido too. Lido is an ETH 2.0 staking solution that provides a tokenised version of your staked ETH while you are staking. This tokenised stETH is compatible with DeFi and allows you to simultaneously stake ether while also participating in on-chain lending or trading. Lido will maintain a set of node operators who are responsible for validating the ETH staked with Lido. The addition and removal of node operators will be voted on by Lido community governance. When you stake with Lido, your ETH is staked with an operator within the set. This is chosen through a round-robin allocation based on the remaining availability within each validator’s slot. If you stake more than 32 ETH, it’s possible that your ETH is staked with several different validators in the set. Lido’s founding operators will be voted on by community governance in the next couple of weeks. Companies like Certus One, Chorus One, p2p.org, StakeFish, Staking Facilities and many more have indicated interest in becoming the initial operators on Lido, which Lido community governance can vote to accept, and many more of the leading validators across Cosmos, Polkadot, Solana, and others have indicated strong interest. Such high-quality operators would provide a strong backbone for Lido. The reputation and historic record as the best-in-industry of those interested in being operators is important because they are responsible for validating the ETH in Lido. These characteristics are equally important when selecting a node operator if you plan to stake elsewhere. Diving into the details of those risks. ### The hostage years (or “out of business” risk) Since it may take months to years for transactions to be enabled on ETH 2.0 - during which time it is impossible to move ETH - the operator you choose to stake your ETH with is exceptionally important. You must have confidence that they are still going to be operating one or two years in the future. Since your ETH is locked and unmoveable, it won't be possible to re-delegate or switch to another operator in case the one you chose goes out of business. If your chosen operator is a hobbyist, or perhaps a new and unproven organization, and it stopped validating after a few months, your ETH would be stuck earning no rewards until transactions are enabled. For Lido, it is important to only allow professionals that have a reputable history and are very likely to still be doing business up until transactions are enabled on ETH 2.0. Incentives are aligned with these operators. They are part-owners of Lido, and their rewards are paid in real-time in stETH. ### Slashing risk ETH 2.0 is not well suited for amateur validators. There are several reasons for this, the main being that slashing and offline penalties can get severe if they were to happen across multiple validators simultaneously. Slashing is a penalty in which a validator forfeits a proportion of their staked tokens due to node downtime or double-signing. The risk of slashing, combined with the fact the software is unpolished, migration between clients is difficult, and a minimal deposit of 32 ETH being a sizable sum to risk for most of us, all means that staking Ethereum has a risk/reward ratio which is, in our view, only acceptable to professionals. This is another reason why it’s important for Lido’s operators to be highly reputable and with a history of good performance in staking. Lido should, in principle, aim to only work with operators that can maintain the high levels of security and performance. Of course, this may not be enough. Slashing can still happen. In that instance, there are many things Lido can do to prevent the downside from slashing risk. 1. Lido could socialise the slashing loss to all users in order to reduce individual impact. 2. Lido could leverage existing risk capital pools to buy slashing cover from, for example, Nexus Mutual or Shield DAO. 3. Lido could maintain its own Reserve Fund to cover slashing penalties directly. ### Lido’s Founding Node Operators A liquid staking protocol is only as good as its node operators. It is great to have such reputable founding operators willing to participate in Lido. To signal your interest in joining Lido as a validator, please get in touch with us. ### How Lido Works URL: https://blog.lido.fi/how-lido-works/ Last updated: 2026-06-24T11:38:05.000Z Lido DAO is a community that builds liquid staking technology for Ethereum. Lido software allows users to stake the network without maintaining staking infrastructure or losing the utility of their capital. Staking with Lido is primed to start along with Phase 0 of Ethereum 2.0. When a user uses a Lido smart contract to stake ether, a user mints stETH (staked ETH) ERC20 utlity tokens that correspond to the user’s staked ETH balance on the Ethereum Beacon Chain along with staking rewards accrued or penalties associated wity their validator key in the Beacon Chain. When transactions are enabled on the beacon chain - which does not yet have a target date but is estimated to be over 18 months away. After withdrawals are enabled, users will be able to receive their ether balance on the beacoin chain when they burn their stETH. Until then, stETH can be transferred and used unlike beacon chain ether. Lido has a lot of moving parts by necessity so the system, along with design goals and constraints, are described below in simple terms. ### Design goals and constraints Staking during the first stages of Ethereum 2.0 means accepting the risk that your ETH will be frozen until transfers are available in Ethereum 2.0 (Phase 1.5 or Phase 2), which is expected to happen next year at the earliest. Until that time, no one will be able to withdraw staked ether or staking rewards and, for example, sell them on an exchange. To validate the beacon chain, a staker needs to deposit 32 ethers, specify a validating public key, and specify a withdrawal address where the staker’s assets and rewards will stay frozen until transfers are enabled. Until then, the only two activities you can do on the beacon chain are to validate and to stop validating. During this time, stakers must run the validation infrastructure, facing the risk of having their stake reduced in the case of misconfiguration. There is a risk of loss or loss of rewards, which occurs if the validator is slashed for misbehaving. This can happen, for example, due to a bug in the validator's node code or due to connectivity issues. This risk makes Ethereum staking especially unattractive in Phases 0 and 1, when the staker has, for a middling reward, to bear market risk while being unable to unstake. Lido aims to allow users to stake ether without losing the ability to otherwise use the utlity of their stake. Lido will be a decentralized infrastructure for issuing a liquid token that has a degree of flexibility compared to self-staking. The primary goals of Lido are: - To offer flexibility to users to earn rewards on deposits smaller than 32 ether, and without restriction on deposits different than a multiple of 32 ether; - To provide the stETH token as a building block for other applications and protocols (e.g., as collateral in lending or other DeFi solutions); - To provide an alternative to exchange staking, self-staking, and other semi-custodial and decentralized protocols. Lido is designed as a simple-to-use protocol with community governance. The protocol has to follow the changes in the underlying blockchain mechanisms. ### Lido’s structural components The following is a broad description of the components of the Lido staking protocol: 1. Staking pool: protocol to manage deposits, staking rewards, and withdrawals a. node operators registry b. withdrawal credentials c. oracles d. rewards 2\. stETH: liquid staking token that maintains balance corresponding 1-to-1 to your share of beacon chain ether 3\. DAO: Aragon DAO that governs protocol parameters ### Staking pool The staking pool is the core smart contract of Lido. The contract is responsible for ether deposits and withdrawals; minting and burning stETH tokens; delegating funds to node operators; applying fees to staking rewards; and accepting updates from the oracle contract. Node operators' manager logic is extracted to a separate contract, NodeOperatorsRegistry. Users will send ether to the staking pool contract to be minted stETH tokens in return. That ether will be distributed between node operators to maintain uniform distribution and deposited to be validated by their validators. Withdrawal credentials for that ether will be set either to threshold signature of distributed custody or, if [withdrawal to eth1 addresses](https://github.com/ethereum/eth2.0-specs/issues/2040?ref=blog.lido.fi) will get accepted by the community, to an upgradeable smart contract that will handle withdrawals when they are enabled. Node operators also validate transactions on the beacon chain. The DAO selects node operators and adds their addresses to the NodeOperatorsRegistry contract. Authorized node operators have to generate a set of keys for the validation and also provide them with the smart contract. As ether is received from users, it is distributed in chunks of 32 Ether between all active node operators. The staking pool contract contains a list of node operators, their keys, and the logic for distributing rewards between them. ![](https://blog.lido.fi/content/images/2020/11/01.png) Oracle is a contract that keeps track of balances of the DAO's validators on the beacon chain. The balances can go up because of reward accumulation and can go down due to slashing and staking penalties. Oracles are assigned by the DAO. Data is sent daily and is used to provide an accurate balance of stETH tokens for users. On days where there have been rewards, a small amount of stETH tokens are minted to the node operators and to the DAO's Reserve and development funds, representing a reward fee. ![](https://blog.lido.fi/content/images/2020/11/02.png) ### stETH token stETH is an ERC20 token that represents staked ether in Lido. Tokens are minted upon deposit and burned when redeemed. stETH token balances correspond to the ethers that are staked using the Lido smart contract. stETH token’s balances are updated when the oracle reports change in total stake every day. ### Lido DAO We believe a DAO is an optimal structure for launching the Lido protocol. If we were to launch Lido without decentralised governance, users would be required to trust a single point of failure to maintain a 1:1 relationship of ETH to stETH. Instead, we believe by distributing governance of such parameters to a decentralised community you reduce the risk to the user. In addition: - Lido is highly dependent on the design and restrictions of the beacon chain; - Ethereum 2.0 staking protocol may change and therefore Lido should be upgradable; - An insurance provider must be selected and terms for slashing insurance must be negotiated; - DAO governance is preferable than one person or a developer's team for making decisions about changes in Lido; and - A DAO will be able to cover the costs of developing and upgrading the protocol from the DAO token treasury. The DAO will accumulate staking rewards from the Lido smart contract, which can be used in the Reserve and development funds, distributed by the DAO. ### Join Us As we approach launch, we’re opening channels in our discord and inviting collaboration. We think this is a fundamentally important piece of infrastructure in the Ethereum ecosystem, we’d love to build it with you. If you’d like to help build Lido, please email [info@lido.fi](mailto:info@lido.fi). Or, join the Lido [Discord](https://discord.com/invite/vgdPfhZ?ref=blog.lido.fi). Thx, VS ### Introducing Lido URL: https://blog.lido.fi/introducing-lido/ Last updated: 2023-01-30T14:43:53.000Z In the next few weeks, Ethereum is expected to launch ETH 2.0 and begin the transition to proof of stake (PoS) as discussed in the original Ethereum whitepaper. PoS networks are not new. Although Tezos and Cosmos are amongst the 100s of networks that are secured by PoS today, when Ethereum’s transition is complete, it will be the largest PoS network by a significant margin. Ethereum’s PoS launch raises some additional interesting issues: 1. Early stakers will lock their ETH until transactions are enabled on ETH 2.0, which could be a few months or several years. 2. ETH cannot be moved/traded or used as collateral when a user is staking ETH — in other words, staked ETH is illiquid. 3. Users can only stake multiples of 32 ETH. ### Early staking commitment When ETH 2.0 launches it will be a multi-phase rollout. Staking will launch quite early, but the state transitions — including transfers — will not be launched until later phases of the ETH 2.0 transition. Without transactions enabled, it will be impossible to move, trade or spend ETH that has been staked. Practically, this means that any ETH staked on ETH 2.0 early in the rollout will be locked and unmoveable for a period of time — possibly even up to 2 or 3 years. This may deter participation in staking on ETH 2.0 given that users sacrifice the ability to use, sell, trade or do anything else with their ETH for that period of time. ### Illiquidity During the period mentioned above, staked ETH will be non-transferable and illiquid. Even after transactions are enabled on ETH 2.0 and it becomes possible to unstake ETH, ETH that is staked will remain illiquid for the period of time it is staked. This presents an interesting dilemma — adversarial incentives between securing the network through staking and participating in DeFi are introduced. Users will have to choose between the rewards offered from staking or the yield offered from DeFi protocols. This has been best described by Tarun from Gauntlet in his research on [competitive equilibria between staking and on-chain lending](https://assets.pubpub.org/uegr5e8g/61581338612941.pdf?ref=blog.lido.fi) and Haseeb from Dragonfly in [his commentary on the paper](https://medium.com/dragonfly-research/how-defi-cannibalizes-pos-security-84b146f00697?ref=blog.lido.fi). ### Staking 32 ETH multiples Finally, some users may face an additional issue with the requirement to stake multiples of 32 ETH. At the time of this post, a user would need to stake no less than $11,744.32 in order to participate in securing the Ethereum network under ETH 2.0. People that own 5 ETH and want to participate in staking will not be able to do so alone. Equally, people who own 45 ETH will only be able to stake 32 ETH from their holding. ## So… why Lido? ![](https://lh6.googleusercontent.com/fmoT1hguv0Dhj2T1vOjKGBWzP57IS0h2vrgHsX48tXUxRYQfqLUyTOwaXrYJOTr1NY0aZDoXUiZYW3LbNIRnIZOvnrPweZB0vMblpHeF67DZXfSAdHCXrKvate1fg_MZdoaek8c2) Lido is a staking solution for ETH 2.0 built to solve these problems and backed by several industry-leading staking providers. It makes staked ETH liquid and allows participation with any amount of ETH. When using Lido to stake your ETH on the Ethereum beacon chain, users will receive a token (stETH), which represents their ETH on the Ethereum beacon chain on a 1:1 basis. It effectively acts as a bridge bringing ETH 2.0’s staking rewards to ETH 1.0. As a user’s staked ETH generates staking rewards from ETH 2.0, the user’s ETH balance on the beacon chain will increase. stETH balances will update correspondingly once per day allowing you to access on ETH 1.0 the value of your staking rewards received on ETH 2.0. Users can use stETH in all of the same ways that they can use ETH: sell it, spend it and, since it is compatible to be used in DeFi, use it as collateral for on-chain lending. When transactions are enabled on ETH 2.0, users can also redeem stETH for ETH. We believe that stETH will be an important base primitive in DeFi, and a foundational building block for the Ethereum money-lego stack. ![](https://lh6.googleusercontent.com/7kZAupMVay0spe3J-atYNI8hEUVBxm2QBuL3bWrClTTd4uawgwkrEVA_0Q0KuRKSQoESrQutGwpIB1ICq-CYdjCiUtl-7y9RbZmRZkRC25mFRXwlu4S0wcaLV2Jnh-iq5H23fl20) Lido is intended to remove the adversarial incentives of ETH 2.0 by allowing users to stake their ETH while simultaneously participating in on-chain lending with stETH, thus providing them access to additional yield from other protocols and producing a more secure ETH network. ## What happens next? It sounds simple, but there is additional nuance. Over the next few weeks p2p.org CTO @[VS](https://twitter.com/%5Fvshapovalov?ref=blog.lido.fi) will share further blog posts about Lido’s architecture and provide clarity for launch timelines; the code will become open sourced; and the testnet product will become accessible. Meanwhile, follow along on [Twitter](https://twitter.com/lidofinance?ref=blog.lido.fi) / [Telegram](https://t.me/lidofinance?ref=blog.lido.fi) / [Discord](https://discord.gg/vgdPfhZ?ref=blog.lido.fi) or if you’d like to help build Lido, you can email [j@lido.fi](mailto:j@lido.fi) and I’ll be in touch. Until next time.