Lido On Ethereum: Community Validation Manifesto

In an effort to further facilitate the alignment of Lido contributors, stakers, node operators, and LDO token holders, a set of Lido DAO contributors created this Manifesto to serve as a reference point for past, present, and future decision-making regarding Lido’s evolving operator and validator set.

Lido DAO is always aligned with the Ethereum values and puts a lot of effort into bringing Ethereum closer to these values. A list of current and completed activities is presented at the end of this post. In order to put them together and make them as effective as possible, it is necessary to form a clear understanding of the goal we want to achieve.

By publishing this post, Lido DAO contributors want to establish goals for the extension of the Lido node operator set, and receive feedback regarding these goals. At this stage, it is crucial to get opinions from Lido contributors, stakers, node operators, LDO holders, and the wider community as subsequent decisions on the composition of the Lido node operator set will be based on the goals outlined in this Manifesto. We are grateful for your comments, additions, and opinions!

The Manifesto is not a plan of action, but rather forms the basis upon which further actions will be viewed and agreed. Further plans for the short term are also set out in the last paragraph of this post.


Lido-on-Ethereum Community Validation Manifesto

N.B. we are using the term community stakers/validators in the below document to refer to a superset of home stakers. This term encompasses any entity (a person or a group of people) whose values align strongly with Ethereum and whose primary motivation is not financial.

The main purpose of Lido strategy

Lido’s mission is to align with the Ethereum core values of decenstralization, credible neutrality and censorship resistance.

Since its inception in Dec 2020, the Lido DAO has worked hard to bring Proof-of-Stake Ethereum closer to the realization of these values.

The benefits that Lido bring must be tangible and practical. These results must not only be proclaimed, but also demonstrated. Lido has a significant share of the staking market. As a result Lido DAO contributors feel particularly responsible for the changes we bring and the decisions we make.

What does it mean to be aligned with Ethereum values?

We want to do our utmost best to help keep Ethereum:

  • credibly neutral
  • censorship resistant
  • resilient

In order to achieve this, we are committed to the following principles:

Support and nurture community stakers
Ethereum’s ability to recover from a majority attack relies on the existence of a long tail of community stakers, aligned with Ethereum’s values, who are able to fork and keep the original network running whatever happens. We want to do everything we can to help support and nurture this demographic.

Increase Ethereum’s technical, geographical, and jurisdictional resilience
Increasing the diversity of Lido’s validator set across these three dimensions – technical, geographical, jurisdictional – makes Ethereum more resistant to software bugs, wars, natural disasters, government/legal overreach, and censorship attacks. It also helps ensure a wider representation of voices at the social layer.

Create more replicas of the network state
Every extra independent replica of the network state makes Ethereum more resistant to censorship and increases the odds of recovery from a catastrophic event.

In order to embody these principles, Lido needs to achieve the following goals:

  1. Increase both the type and number of independent node operators we support (without compromising on quality)
  2. Develop better and fairer criteria for entry into the Lido set of node operators
  3. Lower the barriers to becoming a node operator
  4. Make it as easy as possible for home stakers to onboard and become professional operators (should they wish to do so)

Current state of goals

In order to proceed to the next steps, let’s evaluate what has already been done in accordance with the goals set, and what we are working on now:

What we have already done to directly further these goals

What are we working on now to directly further these goals

  • Staking router — Staking Router will allow Lido to move to a modular validator set in such a way that a separate smart contract is responsible for its part of the validator subset. This is a technical but important step towards community validation.
  • DVT Pilot with SSV Network and Obol — Adoption of 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.
  • Withdrawer initiated exits — Lido contributors are working on an EIP for a new type of message from a dedicated smart contract to trigger a validator exit that will allow increased trustless handling of node operators in decentralized staking protocols

What we are doing to indirectly bring us closer to these goals

  • Two-Phase Voting — a two-phase voting schema allows us to have timelock + veto-like behaviour for votes. This way, in case something bad happens, the community will have 24 hours during the timelock to react.
  • We support the Ethereum community by bringing a valuable contribution to the network by Lido Ecosystem Grants Organization (LEGO)
  • We make the management of Lido’s node operator set transparent by performing Lido Node Operator Community calls

Next steps

Taking into account the goals set, we see the following steps toward achieving these goals:

  • Upgrade protocol to enable staking router adapter
  • Integrate DVT solutions
  • Introduce Withdrawer initiated exits EIP and maintain the public discussion
  • Conduct a needs research of community stakers and identify how Lido can meet those needs
  • Propose options of mechanisms for community stakers to enter into Lido node operators set
  • Assess the feasibility and implementation of these mechanisms, as well as the associated risks
  • Choose the most suitable mechanisms for Lido
  • Form a roadmap for the implementation of new mechanisms and share it with the community
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Could you plz share more about this part? or any doc to share. what is the difference from the current design.

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Hey, absolutely magnificent to get everything together in one place.
Maybe worth adding LDO+stETH Dual Governance as a prominent research vector.

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More details about the staking router will be published soon! I’ll provide a link to the relevant post here.

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I like this direction, devteam are also working on staking router proposal witch would allow more easily to include community validators. Stay tuned!

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Also interested in learning more about staking router. Is it going to try to create subsets of diverse node operators in terms of geolocation, infrastructure, etc?

With regards to SSV (DVT tech), where can I find the “rules” for Lido node operators who will be participating by running SSV operator? Will there be any impact if validators outside of Lido choose Lido SSV operators?
Also, who is deciding on the ssv operators fee?

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DVT integration (whether via SSV or SSV Obol) is still in the pilot stages so there’s a long way to go until there’s a clear open-access mainnet-ready integration for either infrastructure and the design and implementation of rules / mechanisms that would guide participation through these DVT infra solutions have yet to be completed.

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We are planing to share a proposal about Staking Router soon. I will add a link here once it is published.

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I support the proposal. Should say, spelling out what Lido is focusing on, and what is important is highly valuable thing to have.

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That is a great one! Happy to share the node selection algorithm approach we have for Lido on Polkadot and Kusama, where applicable. Also, we would consider participation as an independent node operator.

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love this direction @Aleksandra_G. here are my suggested edits for the manifesto section (feel free to take from it what you find useful)

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Thank you, @sacha! Your vision is extremely valuable.
It’s pleasure for me to add your suggestions in the strategy!

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As I promised, here is the link to Staking Router discussion & description :rocket: - LIP-20: Staking Router

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Hi there!

Over the last months, Lido DAO contributors together with multiple Ethereum ecosystem members have made tangible progress regarding the goals outlined in the Manifesto.
I’m thrilled to share some outcomes of this progress:

  1. Deployment, as a part of Lido V2, of the Staking Router smart contract that plays a key role in organizing the validator set through modularization at the smart-contract level. This approach allows for the creation of separate pluggable contracts called modules, which act as subsets of validators.
  2. DVT Pilot: the second round of testing Obol and SSV-based distributed validators took place on Goerli. A bunch of new node operators participated, including solo and community stakers!
  3. Ethereum validators classifier designed by Rated. Check out the mind-blowing research funded by LEGO for designing a filtering mechanism to identify solo stakers on-chain.
  4. Funding for the ongoing research to design a Sybil and white-labeling resistance mechanism from Nethermind.
  5. A protocol rewards risk analysis framework for permissionless staking, introduced by @Mol_Eliza during the Lido Node Operator Community Call #8.
  6. LEGO committee introduced the Community Lifeguard Initiative to foster a vibrant and inclusive community and increase the operators participating in the Lido on Ethereum protocol. The first applicant @Eridian is already onboard!

Also, many thanks to @djrtwo for proposing Execution layer triggerable exits that is believed to be a crucial part of the staking modules.

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Very exciting, thanks for the update @Aleksandra_G !

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Thanks for the update. Great work and progress!

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Great to see this progressing, thanks for the update!

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Hi all!

In the latest update, I’m excited to share that Lido contributors have introduced the proposal for the first permissionless module within the Lido protocol, and the Snapshot vote is currently underway!

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