One Month of CSM Mainnet Adoption: A Look Back

December 03, 2024 in Community Staking by Lido

The Lido Community Staking Module (CSM) 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 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.

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 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. 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, eth-docker, EthPillar, Nethermind Sedge, and Stereum provided native support to help Node Operators seamlessly set up CSM validators on mainnet.
Performance Tracking: With the release of Beaconcha.in V2, CSM Node Operators can now conveniently view their validator performance via direct links provided in the CSM widget. Additionally, operators can track their overall performance using the RAVER score system on Rated Network.
Grants & Initiatives: The first round of Community Staking Grants was a success, and the Community Lifeguards Initiative sub-committee has launched a second round 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 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.