Proposal: CSM stake share limit increase
CSM has reached its stake share limit. This means new CSM validators can be deposited only if Lido protocol TVL increases or some current validators exit. This fact limits the future growth of the Lido on Ethereum Node Operator set. Also, about 50 new Node Operators are in the CSM deposit queue.
If the conditions below are met, it is proposed that the CSM stake share limit (stakeShareLimit) be increased from 2% to 3%.
To maintain consistency of the stake share limit parameters in the Staking Router, it is proposed to set the priorityExitShareThreshold to 375 BP (3.75%), maintaining the existing ratio.
Since CSM is not the only staking module in Lido on Ethereum, stake distribution in the other modules should be accounted for while increasing the CSM stake share limit. The following conditions should be met before increasing the CSM stake share limit:
- SimpleDVT module should have all of the depositable validators deposited;
- Curated Node Operator Pier Two should get at least a minimum viable number of active validators (1000) not to operate on the loss (after the rotation, they are sitting at zero active keys following the Snapshot vote on Nov 2024).
Should the CSM v2 release be approved by the Lido DAO and be ready before the conditions above are met, the CSM Stake Share Limit can be increased alongside the v2 on-chain release, regardless of whether those conditions have been fulfilled.