0x02 CSM Rollout plan update
Given that the Ethereum entry queue is still very long (>23 days at the moment of writing), ongoing stake migration from CMv1 to CMv2, and a continued focus on protocol efficiency, resilience, and security, Lido contributors propose the updated rollout plan for 0x02 CSM.
Phase 1. Seed deposits for the very first keys in the module
It is proposed to launch 0x02 CSM with the stakeShareLimit = 1 BP (0.01% of protocol TVL) and a top-up queue limit of 32 validators. This will ensure that all of the initial stakeShareLimit is utilized by seed deposits (initial 32 ETH deposits) only. Top-up deposits are only possible for active validators. With the current Ethereum Entry Queue, it will take 23+ days for these keys to get activated. Hence, stakeShareLimit = 1 BP (0.01% of protocol TVL) is reasonable to allow for the seed deposits on these ~32 keys during Phase 1.
Phase 2. Gradual increase of the stakeShareLimit
Once the first batch of 32 keys is seed deposited and activated on the Ethereum Consensus Layer, CSMC (Community Staking Module Committee) will propose an increase of the stakeShareLimit (via ET motion) to the value that can be immediately (provided sufficient stake inflow to the protocol) filled by allocating top-up deposits to the already active keys. As soon as the first key is fully topped up, it will be removed from the top-up queue and free up the space for the additional seed deposit. Since seed deposits have priority over top-up deposits, this key will be the next in line to get a seed deposit. The process will continue in the same way until 0x02 CSM reaches its stakeShareLimit.
Once stakeShareLimit is reached, and a sufficient number of new validators are active to receive top-ups, CSMC will repeat the process of proposing a stakeShareLimit increase via ET motions.
Operator UX in the proposed plan
For the Node Operators in 0x02 CSM, the proposed plan means that if they get seed deposits during one iteration of the stakeShareLimit increase, they will receive top-up deposits that will bring their validator to 2046 ETH (2 ETH leeway is by protocol design and aimed to avoid validator overfill), not earlier than in the next iteration of the stakeShareLimit increase.
The picture below illustrates the approximate validator deposit cycle in 0x02 CSM. If you upload your key when there are available spots in the top-up queue, you will start with step two without a stakeShareLimit increase required to get a seed deposit.
Given the extended entry queue, the proposed solution is aimed at balancing:
- Ensuring the fastest start for the brand-new validators in 0x02 CSM
- Not interrupting the current CMv1 to CMv2 stake migration
Changes to the upcoming on-chain vote
To implement the plan described, the following changes and additions should be made to the planned 0x02 CSM activation on-chain vote:
- Change initial
stakeShareLimitfrom originally proposed 200 BP (2%) to 1 BP (0.01%) to ensure a smooth start, with further increases tostakeShareLimitvia ET motions - Add a call to set
topUpQueueLimitto 32 items
Community feedback and questions
The proposed updated rollout plan is now open for community discussion. Lido Contributors will be happy to provide more detailed answers to any questions you might have in this thread or in the official Lido Discord.