Dear Lido Community!
Following the latest development concerning the slashing incident of April 13th 2023, and particularly the post of Izzy from Lido from July 27th 2023 we would like to take the opportunity to lay out our position on the matter.
As you probably know, eleven validators associated with our node were slashed on that day due to a bug affecting our operation. They have been re-imbursed since and we, with the support of the community, have taken considerable effort to prevent the occurrence of similar incidents both to us and other NOs in the future.
To do this, we have actively engaged in the forums over the past months, providing transparent explanations of our actions and their progress, and setting into motion a discussion about what we and others could generally improve running their node. We value the feedback and support received during this period, which you can see here:
We also greatly appreciate the work of Lido’s Node Operator Management, and the efforts NOM has put forth to support us before, during and after the incident. Also, we want to express our gratitude towards NOM, and Izzy in particular, for their positive appraisal of our remediation actions. We are happy to see that our efforts to repair the damage and to further the security of the Ethereum network have been fruitful and are very much appreciated by the community.
For everyone who does not know yet, we also want to mention that in addition to our role as a Lido NO, our team is actively involved in the Stereum project. Stereum contributes to the decentralization of the Ethereum ecosystem by providing an Ethereum node setup software which facilitates staking. We have successfully integrated various Lido services, including KAPI and Ejector, into Stereum. By doing so, we are actively working towards building a stronger, more decentralized Ethereum network. This goes beyond our responsibilities as a NO and contributes to building towards Lido’s own decentralized future.
Even more, we are one of the most involved operators intensively driving minority client usage (consensus and execution).
We are proud of these contributions, and again want to thank Izzy for explicitly mentioning the value they add to Lido’s operation.
Of course, we are not happy that notwithstanding our best efforts, this slashing incident has occurred to us - but we like to see it as a major investment into a better future, creating a precedence on which we all jointly had to react upon by now setting up a common process of how to deal with incidents like these and the parties concerned.
We support the train of consequences proposed by Izzy in full, because we believe that open communication, collaboration, and a common set of rules are essential in addressing and resolving any kind of incident effectively. This includes crisis management - if needed - as an important part of the path to developing a resilient and trusted Ethereum environment.
What we are unhappy with, though, is the idea of still limiting the number of keys with which we can operate. For the contributions described above we do need more keys to move forward with our development. We understand the position that some kind of punishment had been in order, which was the immediate freezing of our key limit.
Thus, our current key limit has been set upon us as a direct response after the incident back in April, an understandable precautionary measure at the time - until things would be fixed again. But now that they are, this key limit starts to affect our work.
Generally, a key limit bears major disadvantages, as there is less decentralization of keys present. It slows down the long-term development of Stereum, it worsens security assumptions - and in our estimation all this does not only affect us, but also Lido’s future growth and decentralization efforts, and thus the whole Ethereum community.
All this is to say that we now would like to take a major step forward, rounding up the incident of April 13th 2023, and concentrate on what we do best: putting our hearts into the development of Stereum as a trusted contribution to Lido’s operation, and a strong Ethereum network and community.
We are fully aware of our responsibility, and we kindly request your support in the upcoming DAO vote as to remove our key limit. We believe that the initial key limit has served its purpose, we have already faced its consequences and it has been a significant period since the incident occurred.
Having continuously demonstrated our commitment to ensuring the security and reliability of Lido stakers & the Ethereum network, we are willing to do so in the future - and we now need your support to proceed!
Thank you all for your consideration.
Stefan Kobrc & the RockLogic Team