A proposal for partnering with Nethermind to design a mechanism for good validator set maintenance. Phase 2

Proposals
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To remain successful, Lido should become more permissionless and invite more operators. However, that opening is with risks, Sybils and white-labeling being one of the most prominent. We took a look at Lido’s self-assessed scorecard (https://lido.fi/scorecard) and noted the following:

  • There’s a way for new operators to enter the set and prove themselves. Current score: Needs improvement. Lido is actively researching ways to allow permissionless operators to join its validator set, including working with SSV Network and Obol on DVT, as well as exploring ways for solo stakers to participate in the protocol.

However, onboarding operators permissionlessly is tricky. Or, more precisely, it is tricky to permissionless onboard the operators and

  • Have good scores in the following (same scorecard):
    • Operators run their own nodes (no white-labeling) (currently: Good)
    • No operators with over 1% of total stake of Ethereum through Lido (currently: Okay)
    • Distributed geographically and jurisdictionally (currently: Okay)
    • Distributed variation of on-premise infra and different cloud providers (currently: Okay)
    • Client Diversity (currently: Okay)
  • To make sure that the operators make together a good-quality set of operators (cf. https://hackmd.io/K6udDz1nSZOoX8t-vE98qg )
  • To fulfill “Increase Ethereum’s technical, geographical, and jurisdictional resilience” (cf. https://research.lido.fi/t/lido-on-ethereum-community-validation-manifesto/3331)

Given all the above, I’m afraid I have to disagree that the risks are higher than the rewards.

Regarding the Starkware situation. We (as a company, it was a different team) identified the issue and solved it. The RnD in that project was really “D”, and that went back to “D”. Our team showed the ability to perform proper research, e.g., in https://research.lido.fi/t/a-proposal-for-partnering-with-nethermind-to-design-a-mechanism-for-a-good-validator-set-maintenance/3000 not to mention other projects run for clients and organizations like EF. (I will introduce the team shortly in a separate entry.)

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