This post covers the operational procedure for how incentives related to SSV Network Validators in the Simple DVT and Community Staking Modules are allocated following the two Snapshot votes for the integration of the Simple DVT and Community Staking Modules into the Mellow Decentralized Validator Vault.
Incentives Flow
SSV incentives distribution would operate with a monthly snapshot period, aligned with SSV Network’s Incentive Program during which incentives are allocated for SSV validators run by node operators using the Lido protocol, and would be distributed across the following participants:
- Decentralized Validator Vault users
- Simple DVT Module Node Operators, utilizing SSV technology
- Community Staking Module Node Operators, utilizing SSV technology
Incentives claiming would be facilitated by the SSV DAO, while the distribution calculation between the three groups of participants would be provided by Lido contributors and represented within this thread with monthly updates.
Methodology
Per the Integrate CSM into the Decentralized Validator Vault proposal approved by the DAO, the structure of the incentive split is:
| SSV Incentives | |
|---|---|
| DVV user share of incentives (SDVT validators) | 90% |
| SDVT Cluster share of incentives (respective to number of clusters operated using specific DVT infra) | 10% |
| DVV user share of incentives (DVT CSM validators) | 80% |
| CSM Cluster share of incentives (respective to validators operated using specific DVT infra) | 20% |
Executing based on the Lido DAO approved allocation, the following methodology would be applied to calculate incentives split, based on incentives allocation per validator provided by SSV, which would be referred to as:
Total_Incentives = Total_Incentives_SDVT + Total_Incentives_CSM
Simple DVT Module Node Operators:
Aligned with voted allocation, the total amount of incentives allocated to Simple DVT Module Node Operators:
Total_Incentives_SDVT_NO = 10% * Total_Incentives_SDVT
For particular Node Operators, as mentioned in the initial The Decentralized Validator Vault proposal
“The 10% of potential incentives for SDVT participants would be split evenly across respective SSV clusters, with each participant earning a share of any incentives from the provider whose software they utilize based on the number of clusters they participate in.”
Therefore:
Where
- Clusters_SSV - represents the total number of SSV clusters in SDVT
- Clusters_SSV_NOi -represent the total number of SSV clusters in SDVT, where Node Operator i is the participant
Community Staking Module Node Operators:
Aligned with voted allocation, the total amount of incentives allocated to Community Staking Module Node Operators:
Total_Incentives_CSM_NO = 20% * Total_Incentives_CSM
For particular Node Operators, as mentioned in Integrate CSM into the Decentralized Validator Vault proposal
“This proposal suggests that CSM Node Operators receive 20% of DVT provider incentives pertaining to their DVT-based validators utilizing the CSM.”
Therefore:
Incentives_CSM_NOi = 20% * Total_Incentives_CSM_NOi
Where:
- Total_Incentives_CSM_NOi - represents incentives attributed to validators operated by Node Operator i
Decentralized Validator Vault depositors:
Aligned with the voted allocation, the total amount of incentives allocated to DVV users:
Total_Incentives_DVV = Total_Incentives - Total_Incentives_SDVT_NO - Total_Incentives_CSM_NO
For particular users, as mentioned in the initial The Decentralized Validator Vault proposal, each Vault user would be eligible for their share of incentives generated during that time period according to their vault position:
.
Where wstETH(t) - represents the total amount of wstETH attributed to the stalker at the moment of t, which could be reduced based on incentive eligibility conditions:
Incentives Eligibility
In order to dissuade possibly deleterious effects to the protocol due to farming incentives, it was approved via the proposal that analysis be conducted on user interactions with the vault and to create criteria for valid participation. In order to be eligible to receive full vault incentives for the capital provided, stakermust:
-
Hold a position for a minimum of 3 days in the vault through the conclusion of the Snapshot period.
-
Not unstake existing stETH or wstETH that is then restaked via the vault from the moment of vault launch. The incentives are calculated on the base of ETH staked to and persisting within the vault during the relevant snapshot period minus any stETH withdrawn after the launch of the vault.
-
Not sell existing stETH on DEXs/CEXs: this condition does not expel stakers from all incentives, but reduces corresponding amount of capital provided by the volume of sold ETH. Similar to the above, the incentives would be calculated on the base of non-swapped ETH staked to and persisting within the vault during the relevant snapshot period.
Execution
Incentives allocation would be provided in the form of .json files posted on this thread monthly, after publication of the corresponding data on SSV incentives.
The distribution can then be used as input for rewards distribution facilitated by the Administrator of the SSV Incentivized Mainnet Program.
Incentives Distribution Announcement
From: Block 