# Proposal: DVT & DVV Incentive Allocation Changes
**URL:** https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076
**Category:** Proposals
**Created:** [January 5, 2026, 2:51pm UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076 "2026-01-05T14:51:27Z")
**Posts on this page:** 10
**Page:** 2
### Author:  [@khanhwizardpa](https://research.lido.fi/u/khanhwizardpa)
#### Post date: [January 19, 2026, 3:55pm UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/22 "2026-01-19T15:55:56Z")
yeah, really excited for what is comming next đ
---
### Author:  [@governance-data-bot](https://research.lido.fi/u/governance-data-bot)
#### Post date: [January 19, 2026, 4:25pm UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/23 "2026-01-19T16:25:15Z")
## Snapshot vote started
Weâre starting the [DVT & DVV Incentive Allocation Changes](https://snapshot.box/#/s:lido-snapshot.eth/proposal/0x8b8619f09213b868708b25cb2512023234e5e160cba5c291f4e9d944d2ccd3fa) Snapshot, active till Mon, 26 Jan 2026 16:00:00 GMT. Please donât forget to cast your vote!
---
### Author:  [@GozmanGonzalez](https://research.lido.fi/u/GozmanGonzalez)
#### Post date: [January 20, 2026, 10:22am UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/24 "2026-01-20T10:22:05Z")
> [@KimonSh](#):
>
> ## Summary
>
> This proposal introduces a variable incentiveâsharing mechanism for Distributed Validator Technology (DVT) incentives accrued to the Lido protocol that better reflects the real cost of operating DVTâbased validators under current market conditions for Node Operators in the Curated and Community Staking Modules.
>
> Instead of a fixed incentive split, Node Operator (NO) and staker allocations would dynamically adjust based on the SSV Network Fee and total incentives accrued, while ensuring sustainable NO economics and a reasonable allocation to stakers.
>
> SSVâs Network Fee & Incentivized Mainnet will be viewed as a proxy for the direct cost of running DVT based validators, and as such, the proposed share split of the incentives would be equally distributed for Node Operators utilizing Obolâs DVT technology. There would be no change to the Simple DVT Module allocations as DVT provider fees are covered via Node Operator validation rewards.
>
> ## Background
>
> In light of recent market conditions impacting DVT validator incentives as well as related community discussion, this post outlines a proposed change to the Mellow Distributed Validator Vault incentive structure.
>
> The SSV DAO has passed a proposal [[DIP-49]](https://snapshot.org/#/s:mainnet.ssvnetwork.eth/proposal/0x5300de7fd0df8c07b06b1e4ad71bdf036945b26787b0157d70ab80fee3ad4126) that sets a maximum ETH/SSV price ratio of 700 in the formula for determining the network fee, with the goal of aligning the network fee relative to the potential incentives. This potential change, along with the recent update to the Incentivized Mainnet Program (IMP) in [[DIP-39]](https://forum.ssv.network/t/dip-39-incentivized-mainnet-program-revision-4/2006) which introduces a 15% annual cap on the total incentives that may be allocated to the IMP, as well as the current total costs of operating DVs, requires an update to the initial Mellow DVV incentives structure.
>
> Given these developments, a costâreflective, variable mechanism is proposed for both Curated and Community Staking Modules, with identical treatment across SSVâ and Obolâbased Node Operators.
>
> ## Proposed Incentive Mechanism
>
> - Under the DIP-49 SSV framework, DVT incentives should cover the direct cost of operating DVT validators.
> - No more than 50% of total incentives should flow to Node Operators, as 50% is the maximum share of fee to incentives undes the DIP-49 framework.
> - At least 50% of total incentives should flow to Mellow DVV stakers.
> - The same logic and percentages apply equally to SSV and Obol Node Operators.
>
> ### Allocation Logic
>
> 1. **SSV Network Fee Coverage** (as a proxy for the cost of running DVs)
>
> - Up to 50% of total incentives may be allocated to Node Operators to cover the SSV Network Fee.
>
> 1. **Surplus Incentives**
>
> - Any incentives remaining after the Network Fee is covered are distributed as follows:
> - 90% to Mellow DVV stakers
> - 10% to Node Operators
>
> 1. **Bounding the Node Operator Share**
>
> - Minimum NO share: 15% of total incentives
> - Maximum NO share: 50% of total incentives
>
> This ensures that Node Operators are protected when incentives are low and operating costs are high, while stakers benefit disproportionately as incentives increase.
>
> Under this structure, the incentive split is no longer fixed for the Curated and Community Staking Modules. Instead:
>
> - When DVT costs are high relative to incentives, the Node Operator share increases (up to 50%) to preserve sustainability.
> - When incentives increase or costs decrease, the Node Operator share declines, directing more value to stakers.
>
> The result is a selfâadjusting mechanism that maintains longâterm viability across both DVT providers. The Node Operator incentive shares will be dynamically calculated at the same time that the SSV IM incentives distribution is calculated on a monthly basis, and the incentives rate will apply for participants of both DVT providers.
>
> **Illustrative scenarios**
>
> The table below shows indicative splits under a range of IMP and network fee rates scenarios:
>
> | Scenario | Incentive Rate | Network Fee | Node Operator share | Stakers share |
> | --- | --- | --- | --- | --- |
> | 1 | 1.50% | 0.75% | 50.00% | 50.00% |
> | 2 | 1.80% | 0.90% | 50.00% | 50.00% |
> | 3 | 2.00% | 1.00% | 50.00% | 50.00% |
> | 4 | 3.00% | 1.00% | 40.00% | 60.00% |
> | 5 | 5.00% | 1.00% | 28.00% | 72.00% |
> | 6 | 6.00% | 1.00% | 25.00% | 75.00% |
> | 7 | 9.00% | 1.00% | 20.00% | 80.00% |
>
> Assuming SSV incentives return to approximately 6%, with an SSV token price around $10, this model results in:
>
> - A 25% Node Operator incentive share, representing a modest improvement over current Curated and Community Staking Module splits.
>
> At the extremes:
>
> - Low incentive environments (â¤2%): Node Operators may receive up to 50%, with no surplus beyond cost coverage.
> - High incentive environments (â9%): Node Operator share approaches the 15% minimum, with the majority of value accruing to stakers.
>
> ### Next Steps
>
> It is suggested that the community and Node Operator utilizing the Lido protocol review this proposal and provide feedback over the next week. If it seems there is alignment, the proposal is suggested to be considered for inclusion within the next Snapshot vote window in mid January.
This proposal is well thought out because it starts from real operating costs instead of assumptions. Running DVT validators can quickly become unsustainable when incentives drop or network fees rise, and this model openly addresses that risk rather than ignoring it.
The variable incentive split creates a fair balance. Node Operators are protected during low-incentive periods through a higher share, while stakers benefit more as incentives increase. The minimum and maximum bounds give operators stability without letting their share grow too large.
Using the SSV Network Fee as a cost reference makes sense under the recent protocol changes, and applying the same rules to both SSV and Obol operators keeps things consistent and avoids unnecessary friction.
Overall, this approach feels practical and fair. It supports long-term operator sustainability while still prioritizing staker value as conditions improve, which makes it a solid candidate for broader community discussion and a Snapshot vote.
---
### Author:  [@PGov](https://research.lido.fi/u/PGov)
#### Post date: [January 20, 2026, 3:35pm UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/25 "2026-01-20T15:35:21Z")
Weâre in favor because the proposal replaces a brittle fixed split with a cost-aware mechanism that tracks the actual economics of running DVT validators under todayâs SSV incentive and fee regime. The core design is straightforward.
We also like how the surplus logic pushes most upside to stakers once costs are covered, which helps ensure the program remains staker-forward in âgoodâ incentive environments. The scenario table makes the behavior intuitive: in low incentive environments, operators are protected up to the cap; in high incentive environments, the operator share compresses toward the floor and most value flows to stakers.
On the main critique raised (âthis seems overly complicated; why not just reimburse costs and send the rest to DVVâ), the response basically confirms that this is what the mechanism does in practice, while also allowing a small, rule-based upside for operators when network fees are below the DIP-49 implied ceiling. We like that the thread includes concrete worked examples for a CSM operator (10 validators) comparing current vs proposed under both current and targeted incentive rates.
---
### Author:  [@cp0x](https://research.lido.fi/u/cp0x)
#### Post date: [January 20, 2026, 9:28pm UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/26 "2026-01-20T21:28:53Z")
I voted FOR.
The incentive scheme for using DVT/DVV is changing.
Now the SSV Network fee is deducted first, and only then are the incentives distributed between the staker and the NO.
This means that if costs are high and incentives are low, the NO will not go into the negative (as could happen previously).
A proper, flexible approach to DVT/DVV incentives.
---
### Author:  [@Kuzmich](https://research.lido.fi/u/Kuzmich)
#### Post date: [January 20, 2026, 9:42pm UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/27 "2026-01-20T21:42:14Z")
I have a question about this changes.
I understand the approach to solving the problem.
However, looking to the future, Lido canât offer incentives forever, and itâs necessary to find an approach and the right profitability for DVT and DVV instruments so that the difference in revenue covers the costs of using the SSV Network.
Considering that Obol doesnât charge any fees at all (different approaches, but they both solve the overall problem of decentralization), weâre essentially encouraging SSV Network to painlessly increase the price of its services without facing competition.
How do you plan to move away from DVT incentives in the future?
---
### Author:  [@stefa2k](https://research.lido.fi/u/stefa2k)
#### Post date: [January 21, 2026, 6:42am UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/28 "2026-01-21T06:42:31Z")
> [@Kuzmich](#):
>
> Considering that Obol doesnât charge any fees at allâŚ
They charge fees. Source: Weâre a curated set NO and will need pay Obol fees in order to use their tech.
However, I think your question is still important to ask.
/E: typo
---
### Author:  [@Izzy](https://research.lido.fi/u/Izzy)
#### Post date: [January 21, 2026, 6:47am UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/29 "2026-01-21T06:47:02Z")
Happy to offer my thoughts here.
> However, looking to the future, Lido canât offer incentives forever, and itâs necessary to find an approach and the right profitability for DVT and DVV instruments so that the difference in revenue covers the costs of using the SSV Network.
Lido doesnât offer incentives. The incentives are coming from DVT providers (Obol and SSV). What this proposal refines is how these incentives are allocated between users (stakers) and node operators, to try to find a more sustainable equilibrium given that utilizing these DVT technologies incurs a cost to operators.
> Considering that Obol doesnât charge any fees at all (different approaches, but they both solve the overall problem of decentralization)
This is partly accurate. While the Obol technology itself does not technically mandate a fee to use it (because itâs a network in a loose sense of the word, i.e. a network of nodes and users who utilize the technology, but not a shared networking layer/protocol apart from on a per-cluster basis, and thus thereâs no usage fee tied to network usage), when you go to set up an Obol cluster via the Obol launchpad, if you are setting up a cluster with \> 1 validator, an automated fee-split is configured in the Obol launchpad to include sending 1% of staking rewards to Obol Collective, which funds are [then used in the RAF](https://blog.obol.org/introducing-obol-contributions-stake-contribute-earn/). This can in theory be technically circumvented, but thatâs against the expected usage of the technology. Finally, in special cases, node operators, protocols, etc might reach different agreements with Obol as to the size of the fee or how it should be paid. In the case of Lido all modules â SDVT, CSM, and Curated Module â there are staking rewards being accrued by Obol Collective as a result of validators run using Obol technology.
> weâre essentially encouraging SSV Network to painlessly increase the price of its services without facing competition
What this proposal says is that up to 50% of SSV incentives (plus more but only in cases that this is 50% ends up being more than the network fee required) that the SSV DAO is offering can be allocated towards Node Operators to help them pay for the SSV Network Fees. IMO it does the opposite of what youâre claiming; itâs essentially putting downward pressure on network fees in relation to the incentives (which, again, donât come from Lido), otherwise it ceases to be economically feasible for operators to utilize SSV to run the validators.
Going back to what I think is your larger point, which I think is âgiven that DVT is an incremental cost, to what extent should its use be subsidized or incentivized by the Lido protocolâ? In Lido, currently, this kind of âdecentralization premiumâ ascribed to DVT takes a few forms:
- increased node operator rewards in SDVT (and eventually perhaps in CMv2 for inter-operator clusters)
- reduced bond requirements (basically none in the case of SDVT even though the clusters arenât solely made up of professional NOs), and contributors are looking for ways to extend this idea to CSM as well (given inter-operator clusters and DKG)
- the operational cost of coordination of SDVT clusters, and
- incentives (provided by the third DVT infrastructure providers).
In general, this is a broader markets and value of decentralization question. We can think of DVT as a cost thatâs a part of the validator stack (e.g. node operators who run multiclient setups, such as with dirk and vouch or vero also incur additional costs for this robustness), so therefore should consider âhow much is it worth paying for DVT compared to other forms of running validators in terms of the additional risk mitigations and/or operational efficiencies that it offers?â
Personally I believe that DVT is quite a valuable technology in reducing operational risk and slashing risk (mostly in the case of inter-operator DVT assuming DKG), but itâs hard to price exactly how valuable this mitigation is because disastrous slashing events havenât occurred (which is great, we shouldnât wish it to happen to realize this value).
In the case of SSV (which this proposal focuses on), [discussions](https://forum.ssv.network/t/ssv-staking-request-for-comment/2035) have started for the tokenomics of the network to be changed (i.e. where SSV is staked and network fees will be paid in ETH instead of SSV), which should be easier to align usage of the technology as its cost will be denominated in ETH (basically like how Obol is now from a practical perspective). I think and hope both infrastructures can find some way to balance incentives with their respective network/technology tokenomics, as at the end of the day itâs good for a protocol like Lido to have access to multiple sources of validator robustness (both DVT and non-DVT based).
---
### Author:  [@governance-data-bot](https://research.lido.fi/u/governance-data-bot)
#### Post date: [January 26, 2026, 4:00pm UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/30 "2026-01-26T16:00:12Z")
## Snapshot vote ended
The [DVT & DVV Incentive Allocation Changes](https://snapshot.box/#/s:lido-snapshot.eth/proposal/0x8b8619f09213b868708b25cb2512023234e5e160cba5c291f4e9d944d2ccd3fa) Snapshot has reached a quorum and completed successfully!
The results are:
**For** : 54.5M LDO
**Against** : 205 LDO
â
**Winning option: For**
---
### Author:  [@celticwarrior](https://research.lido.fi/u/celticwarrior)
#### Post date: [January 29, 2026, 3:55pm UTC](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076/31 "2026-01-29T15:55:29Z")
> [@GBeast](#):
>
> erator collective with 3 other DVT operators, who agree to run each others DVT validators for free. No additional costs beyond running 1 DVT operator, but does have organizational overhea
This is exactly the right path forward to encourage DVT usage. a) cover the costs for the NO, b) a small profit, c) remainder goes to the vault.
[Previous page](https://research.lido.fi/t/proposal-dvt-dvv-incentive-allocation-changes/11076.md?page=1)