Proposal: Adjusting the Simple DVT Module Share Limit
This proposal seeks DAO approval to raise the Simple DVT Module (SDVTM) target share from 4% to 4.3% in order to:
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Resolve a difference created by net stake outflows since the 4% limit was set; 4% now maps to fewer validators than when originally set, limiting deposits into 15 under-filled SSV Cohort 3 clusters, as well as 4 clusters that saw exits and operator set rotations;
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Align all clusters with the capacity previously approved by the DAO.
No changes are proposed to reward shares, onboarding flow, or per‑cluster key limits; this proposal is solely for adjusting the parameter for the SimpleDVT Module share cap.
Motivation
The SDVTM has recently reached its 4% stake share cap, as set on July 26, 2024. Since then, the protocol has experienced large net stake outflows, decreasing the absolute number of validators represented by the same percentage limit. This has given rise to a small, but impactful bottleneck: the module cannot simultaneously maintain the current share limit, and at the same time finish scaling up clusters that have not reached the targeted number of active validators (80 for regular clusters / 500 for super clusters).
Currently, almost all clusters have validators activated to their limits. After a prolonged period of net stake outflows from the protocol, SSV Cohort 3 began receiving deposits and today each of the 15 clusters sits at 77–78 active keys, awaiting a few activations in order to reach 80 active keys, as in the other regular DVT cohorts.
In parallel, Lido x Obol: Yielding Yellowthroat exited all validators following an August incident as a precaution and currently has 0 active validators, awaiting re‑deposits. Furthermore, following Kiln’s security incident in September, four Simple DVT clusters also went through precautionary changes: one SSV super cluster completed a reshare with a rotated operator set, and three clusters exited and prepared new DKGs, with replacement operators rotating in. Given the large exit queue, final exits are expected around November 3, after which these clusters would be ready for deposits.
Accordingly, adjusting the SDVTM share limit from 4% to 4.3% aligns the initial expectations and previously approved limit with the current market conditions, and also removes the blockers described above. This should provide just enough room to fill up SSV Cohort 3 to 80 keys, as well as allow for re-deposits for the clusters that saw exits and operator rotations. The status of these clusters is summarized below.
Clusters Snapshot
| Cluster | Type | Status |
|---|---|---|
| SSV Cohort 3 Clusters (15 clusters) | Regular clusters | 77-78 active keys each, waiting to be filled up to 80, as the other DVT cohorts |
| Lido x SSV: Arid Anubis | Super cluster | Reshared, fully operational |
| Lido x SSV: Blissful Bear | Regular | Exited (est. Nov. 3rd.), rotated operator set, new set of keys ready |
| Lido x Obol: Brave Bison | Regular | Exited (est. Oct. 27th.), rotated operator set, new set of keys ready |
| Lido x Obol: Jubilant Jackal | Regular | Exited (est. Oct. 21st.), rotated operator set, new set of keys ready |
| Lido x Obol: Yielding Yellowthroat | Regular | Exited, 0 active validators, new set of keys ready |
Next Steps
It is suggested that the community review this proposal and provide feedback over the next 7 days. If no major issues are identified and not rectified during this timeframe, this proposal will be submitted for inclusion in the next on‑chain Aragon vote.
By supporting this change, the DAO can promptly complete scaling up SSV Cohort 3 clusters, as well as make sure the rotated clusters continue to operate the expected number of validators. This will continue to ensure a more decentralized, resilient, and secure Lido Node Operator set and continued progress toward the GOOSE goal of Attracting the Best Validator Set.