Nethermind NO Curated Validator set transfer to Twinstake

[matilote]

Hello Lido community,

Nethermind and Twinstake jointly submit this proposal to migrate all the active Nethermind-run validators (~7400) in the Curated Set to infrastructure operated by Twinstake. Twinstake was developed as a joint venture between Nethermind and WebN in 2022.

Below you will find:

• Why the migration is being proposed
• How key security and operational excellence are preserved
• How rewards will continue to benefit Nethermind’s client-development efforts
• Answers to community questions raised in previous operator-set transitions

We invite discussion, after which the LNOSG will issue its recommendation and a Snapshot vote will be opened.

Why Migrate?

• Delegating operations to a purpose-built staking provider like Twinstake ensures that validators continue to meet the highest standards of uptime, security, and responsiveness. It also aligns with a broader industry trend: decoupling protocol R&D from operational execution to create clear accountability and unlock deeper specialization.
• As Nethermind continues to excel in client development, protocol research, and other core initiatives, partnering with Twinstake for validator operations creates a strategic collaboration that allows both teams to leverage their respective areas of expertise. This migration reflects a thoughtful allocation of resources and the infrastructure will benefit from the same engineering excellence, now delivered through a purpose-built staking provider while maintaining the potential for future collaboration and expanded service offerings.
• For Lido, this migration reinforces the protocol’s long-term decentralization strategy by strengthening the separation of concerns between protocol contributors and validator operators. At the same time, it ensures continuity in high-quality staking performance from a team already deeply aligned with Nethermind’s operational standards and Lido’s expectations. This setup enhances both reliability and transparency, while also future-proofing the operator set for scale.

Why Twinstake?

• Twinstake is a multi-regional, security-first staking provider founded by Nethermind and backed by leading institutional investors. It operates validators across 20+ proof-of-stake networks and brings extensive experience managing Ethereum validators at scale. Twinstake has built dedicated monitoring, alerting, and analytics infrastructure that enables real-time responsiveness and proactive performance management. Into the future, we propose Twinstake will be the operator. Twinstake’s validator business is highly professional, and Twinstake has significant business interest in maintaining and enhancing its reputation.
• The operational handover is also uniquely low risk. Nethermind has a significant shareholding in Twinstake, and works closely with Twinstake. Twinstake shares infrastructure DNA with Nethermind and includes engineers who have worked on both stacks. The migration benefits from strong continuity in tooling, architecture, sharing security frameworks, operational best practices, engineering culture and team knowledge, ensuring a seamless transition without compromise.
• This migration is not a break in continuity. It is the formalization of an already tightly integrated relationship that improves transparency and sets the foundation for future collaboration.

Key security & custody plan

• Original mnemonic seeds used by Nethermind Seed Owners to derive the keys will be kept in a custody of Nethermind
• Nethermind will migrate its AWS account on which the database with Lido’s private keys, encrypted with Advanced Encryption Standard (AES) Key Wrap Algorithm, is deployed to a Twinstake’s AWS organization. This will not require direct, original key material transfer.
• Once the consolidations are supported by Lido protocol Twinstake is going to consider consolidating validators, further mitigating the risk of multiple party custody.
• Validator signing will be performed by redundant instances of the Dirk remote signer, deployed across multiple AWS regions for resilience and fault tolerance.

Personnel continuity

Validator operations will not be transitioned to an unfamiliar team, with continuity ensured:

• The same senior Nethermind SREs who have historically operated these validators will remain actively involved throughout the migration and beyond. These engineers, with deep domain knowledge of Lido operations will retain on-call responsibility after the transition, ensuring operational continuity and preserving institutional memory.
• Additional Twinstake personnel will be onboarded to Lido-specific workflows and procedures, complementing the existing expertise and expanding long-term support capacity.
• First-line monitoring will be handled by Twinstake’s established 24×7 Network Operations Center (NOC), with escalation paths continuing to route through the original Nethermind engineers.

Maintaining the original spirit: voice

• Nethermind retains a seat in the Lido Node Operator Validator community and will keep submitting client-team feedback, relevant discussions and proposals.
• Nethermind remains committed to supporting Lido’s broader initiatives, including CSM and DVT efforts, the existing DVT infrastructure operated by Nethermind will not be transferred in the scope of this proposal.

This migration does not mark a withdrawal but marks a specialization of responsibilities within a deeply aligned partnership.

Infrastructure footprint

• Execution clients: Geth, Nethermind
• Consensus clients: Lighthouse, Nimbus, Prysm which preserves client diversity.
• Hosting: Infrastructure will remain hosted in EMEA, with a 50/50 split across AWS multi-region deployments. Each availability zone will house independent instances of Dirk and Vouch to ensure fault tolerance and geographic redundancy.
• Future roadmap: A long-term plan is in motion to add an on-premise, bare-metal deployment layer to further strengthen infrastructure diversity and resilience. Progress will be reported transparently in the Lido validator operators channel.

Proposed Migration timeline

• Week 1 – Snapshot vote in July
• Week 2 – 3 – AWS Account with encrypted keys ownership transfer & signer deployment
• Week 4 – Rest of validator infrastructure migration in four sub-units (Lido0–Lido3), 2-3 epochs downtime each
• Week 5 – Nethermind infra decommission
• Week 6 - Operator’s Name & Reward address change

A detailed runbook plan is going to be shared with Lido representatives as PDF.

We welcome any feedback.

Thank you for helping us keep Lido resilient, diverse and client-team aligned.
— Twinstake & Nethermind Team

[Sven]

Hi team, thanks for sharing this proposal.

Just confirming that the proposal has been received and forwarded to the LNOSG (Lido Node Operator Subgovernance Group) for review last week. The group is currently reviewing the details and discussing any considerations related to the migration.

We’ll keep this thread updated as the LNOSG forms its recommendation and as next steps progress.

[KimonSh]

Thank you to the Nethermind & Twinstake teams for the proposal.

While there have been acquisitions of Node Operators in the past where the same group of people managed the infrastructure, this proposal is notably different in that Nethermind would like to migrate the validators to be operated by a new team.

After various discussions with ecosystem participants, I’ve aggregated the following questions & comments that would be helpful for you to address:

1. One of the reasons that the Nethermind team was onboarded to Lido was to support development of the Nethermind client and provide a resource to Lido Node Operators. Do you think this acquisition works against one of the major considerations for the original onboarding of Nethermind?

2. Are there any near‑ or mid‑term plans to sell, transfer, or divest TwinStake?

3. Can you provide more information regarding TwinStake’s experience running Ethereum validators?

4. What is the planned duration of the transition period between Nethermind & Twinstake?

5. In the period where mnemonics are held by Nethermind, is there an agreement with respect to assignment of responsibility and accountability in the possible event of an incident?

6. There have been no follow up comments from the TwinStake team up to this point, could they also provide input to this proposal?

The LNOSG is still in the process of forming a recommendation, and an update will be provided here when completed.

[M_Hamburger]

Hello Lido Community,

Firstly, thank you for your thoughtful questions and the engagement. Before addressing the specific points raised, we believe it is important to reiterate the Twinstake-Nethermind relationship.

Twinstake was established as a joint venture between WebN and Nethermind, with both partners remaining majority shareholders in Twinstake. As such, Nethermind will continue to benefit materially from Twinstake’s operation of the validators.

The migration is purely intended to allow Twinstake to focus on its core expertise of running staking infrastructure while leveraging its institutional grade operations to deliver the highest quality service.

Regarding the questions raised:

1. One of the reasons that the Nethermind team was onboarded to Lido was to support development of the Nethermind client and provide a resource to Lido Node Operators. Do you think this acquisition works against one of the major considerations for the original onboarding of Nethermind?

   No, the migration does not work against that original consideration. Nethermind remains fully committed to supporting Lido Node Operators on all matters related to the Nethermind client. As a significant shareholder in Twinstake, Nethermind will continue to benefit economically from Twinstake operating the infrastructure.

   This migration simply shifts operational responsibility to Twinstake’s specialized team, while keeping the economic alignment with Nethermind intact. Future Lido economics should be viewed in this context, as both a benefit to Nethermind and an incentive for ongoing Nethermind client development and contributions to the Lido ecosystem. Additionally, Twinstake intends on proactively engaging with the Lido ecosystem as outlined in the message below in point 6.

   Our participation in the Lido ecosystem continues well beyond the curated set, including:
   Client support: Ongoing maintenance, releases, performance improvements, and incident response for the Nethermind client used by Lido operators.
   Operator enablement: Guidance, documentation, and responsive support for Lido Node Operators.
   Non-curated participation: Active involvement in broader Lido modules, especially DVT initiatives.
   Open collaboration: Regular engagement through standard Lido governance and coordination channels.

   Nethermind remains a long-term, reliable partner for Lido, both in client development and in helping operators succeed, including through DVT deployments. The migration does not conflict with Nethermind’s original Lido mandate, and continued client support and operator assistance remain top priorities.

2. Are there any near‑ or mid‑term plans to sell, transfer, or divest TwinStake?

   There are no immediate plans to sell, transfer, or divest Twinstake. Twinstake remains focused on building long-term infrastructure and operational excellence in alignment with its founding mission. While we recognize that circumstances in the industry can evolve, any future changes in ownership or structure would be approached transparently, with the interests of our partners and the communities we serve as top priority.

3. Can you provide more information regarding TwinStake’s experience running Ethereum validators?

   Twinstake has over 3 years of experience running over 10,000 ETH validators using largely the same processes and setup as Nethermind. We consistently provide industry leading returns and have never been slashed, with robust failover mechanisms, 3rd party technology to avoid double signing, and well designed key management protocols. Our specific infrastructure setup is described in the original post and copied here for ease:

   **Infrastructure footprint

   Execution clients**: Geth, Nethermind
   Consensus clients: Lighthouse, Nimbus, Prysm which preserves client diversity.
   Hosting: Infrastructure will remain hosted in EMEA, with a 50/50 split across AWS multi-region deployments. Each availability zone will house independent instances of Dirk and Vouch to ensure fault tolerance and geographic redundancy.
   Future roadmap: A long-term plan is in motion to add an on-premise, bare-metal deployment layer to further strengthen infrastructure diversity and resilience. Progress will be reported transparently in the Lido validator operators channel.

4. What is the planned duration of the transition period between Nethermind & Twinstake?
   **
   Proposed Migration timeline**
   Week 1 – Snapshot vote in July
   Week 2 – 3 – AWS Account with encrypted keys ownership transfer & signer deployment
   Week 4 – Rest of validator infrastructure migration in four sub-units (Lido0–Lido3), 2-3 epochs downtime each
   Week 5 – Nethermind infra decommission
   Week 6 - Operator’s Name & Reward address change

5. In the period where mnemonics are held by Nethermind, is there an agreement with respect to assignment of responsibility and accountability in the possible event of an incident?

   During the period when Nethermind holds the original mnemonic, Twinstake remains the primary party responsible and accountable for any incidents related to the operation of the Lido curated validator set infrastructure. Nethermind’s role is limited to secure cold-custody of the original mnemonic and does not include operational responsibility.

   In Disaster Recovery scenario, and upon Twinstake’s authorization, Nethermind will retrieve the mnemonic from cold storage and, deterministically derive the required keys from scratch on air‑gapped systems. Nethermind will be granted temporary access to the Twinstake environment to upload the keys in case of disaster.

   Derived keys are securely imported into Twinstake-controlled infrastructure. Nethermind will not retain any copies and will return the mnemonic to cold custody. Twinstake remains operationally accountable throughout.

6. There have been no follow up comments from the Twinstake team up to this point, could they also provide input to this proposal?

   Thank you for raising this important point. The Twinstake team has been closely involved in the drafting and operational planning of this migration from the outset, including serving as a joint signatory on the proposal posted by @matilote. From our perspective, this is not a handoff but the formalization of a deeply aligned partnership that allows both Nethermind and Twinstake to focus on their respective core mandates. We view this transition as a strategic specialization of responsibilities that preserves continuity while enhancing operational focus, transparency, and long term resilience. To reiterate, all communications from the Nethermind team in this thread are also made on behalf of the Twinstake team.

   We’d like to reiterate and expand on Twinstake’s perspective:

   Shared Operations and Knowledge: Many of Twinstake’s engineers have worked directly on Nethermind’s infrastructure and tooling. While Nethermind provided the initial infrastructure and protocol expertise during Twinstake’s formation, Twinstake has since developed into a highly specialized validator operator with deeper focus and scale. Running Ethereum validators is Twinstake’s core area of expertise. The team has built institutional grade processes, automation, and monitoring systems designed specifically for staking operations. Twinstake has been operating Ethereum validators for over three years and manages more than 10,000 validators on behalf of institutional clients. This migration preserves key personnel, tooling continuity, and operational standards, ensuring a smooth transition with no compromise to performance, security, or reliability.

   Professionalization of Operations: Twinstake was purpose-built to deliver institutional-grade staking services. By formalizing the relationship and centralizing validator operations within a dedicated infrastructure entity, we are doubling down on reliability, resilience, and performance.

   Support for the LIDO ecosystem: Twinstake is fundamentally aligned with the success of the Lido ecosystem. We share Lido’s goals of decentralization, client diversity, and high quality validator performance. As a purpose built staking provider, we are committed to maintaining the highest operational standards and contributing constructively to the community over the long term. This includes supporting ongoing initiatives such as client diversity, DVT adoption, Lido v3 and active participation in governance and coordination efforts.

   We’re grateful for the thoughtful feedback and look forward to working with the Lido community to finalize a transition plan that reinforces Lido’s decentralization, diversity, and client-aligned mission.

Regards,
The Twinstake team