Lido DAO

Lido Community Staking contributors are seeking the support of the Lido DAO members regarding the upcoming Community Staking Module release on the Ethereum mainnet.

TL;DR

Community Staking Module (CSM) is the first-ever permissionless staking module built for the Lido on Ethereum staking protocol. Initially announced and approved for development in November 2023, the module has already demonstrated outstanding results on the Holesky testnet.

This snapshot aims to get signal approval from the Lido DAO members regarding CSM parameters, their configuration for use in the mainnet release, and the granting of some CSM management permissions to the CSM committee.

CSM design

As outlined in the original forum post and snapshot vote, the main design features of CSM are:

1. Permissionless entry with bond
2. Only ETH (stETH) as a bond token
3. “Non-linear” bond scaling for Node Operators
4. First in, first out stake allocation queue
5. Performance oracle with performance threshold approach for solo-staker friendly rewards distribution

During module development, additional features were introduced:

1. Early Adoption period ensuring exclusive solo and community stakers participation during early stages of the module with beneficial bond curve
2. MEV-stealing penalty reporting by the committee multi-sig and settling using a dedicated Easy Track motions

The final design description is in LIP-26. The module’s code is in the GitHub repository.

CSM parameters

Given the sophisticated design of CSM, a bunch of parameters should be set during the module deployment. The actual values for the majority of them are published on the Lido Research forum and IPFS (CID: QmcNrpzS6oeeMK9SNABrWS4qWtEfUcSiYJqkRD43WuMo2f). A detailed description of the usage of the parameters can be found in the original post and LIP-26.

CSM Committee and multi-sig

A dedicated committee was formed to serve as Lido DAO representative in some management functions of CSM, namely:

• Reporting MEV stealing in CSM on mainnet
• Cancelling MEV stealing penalty if needed
• Starting Easy Track motions to settle MEV stealing penalty
• Setting and Resetting bond curves for particular CSM Node Operators (not adding new ones, only setting one of the existing ones)
• Pausing CSM in case of emergency via Gate Seal

The committee multi-sig consists of two Lido contributors (madlabman, Remus), one Lido Community Lifeguard (enti) and 3 staking community representatives (Lanski, Eridian, POSTHUMAN), with a signing threshold of 4/6.

Next steps

CSM has already undergone smart contract audits conducted by Ackee and MixBytes. The final reports on the audit results are anticipated and will be published on the research forum once they are ready. Concurrently, CSM is undergoing an internal security review.

If this vote is approved, on-chain voting will take place after all audits and security checks have been successfully completed.

What does approval of the snapshot mean?

Approval of the snapshot means approval of the following items:

• Usage of the current Community Staking Module implementation for the mainnet deployment
• CSM deployment parameters
• Delegation of the several management responsibilities to the CSM committee multi-sig