Community staking module

What is this about?

The community is actively discussing the Lido DAO's Community Staking Module (CSM), which is designed to increase participation by attracting a diverse group of independent node operators. The CSM is expected to provide smoother EL rewards and MEV, competitive bonds, a user-friendly experience with low gas fees, and higher profitability compared to solo staking¹. The Lido DAO team is aiming for a mainnet launch of the CSM by the end of 2024¹. Community members such as Zahary, Eliasimos, Lanski, and Allen_Ebunker are looking forward to creating interfaces and integrating the CSM into existing products¹¹^,¹³^,¹⁴^,¹⁹. Tools like Sedge from Nethermind, offered by Jorgeth, could simplify the onboarding process for new permissionless operators to the Lido protocol²⁴. Washosk from Ethereum on ARM has emphasized the CSM's potential to balance the Ethereum validator landscape and the importance of including Solo stakers for fairness²⁵. Thorsten_Behrens has discussed Eth Docker's role in simplifying solo staking and its potential integration with CSM, which Lido Finance has already explored through a Proof-of-Concept. He is considering how to ensure compatibility with Eth Docker and the process for accepting a PR into the upstream²⁷.

How is the community reacting?

The proposal has received widespread support and active engagement from the community²^,³^,⁴^,⁵^,¹⁰^,¹⁴^,¹⁵. However, it has also sparked debate over the 10% limit, the 1% stake allocation, and its interaction with Simple DVT²^,³^,⁸. Some members are concerned that the proposal might favor bond over DVT setups, which could reduce staking diversity¹⁴. Micho and Hanniabu have raised concerns about systemic risks to Ethereum and have called for revisions, particularly regarding the fee structure¹⁷^,²⁰. Skozin has defended the proposal, highlighting that solo operators are motivated by more than profit, such as contributing to network security²². Randomishwalk has justified the proposed 7.5% fee to Node Operators, explaining the economies of scale in running validators and aggregating stake²³. A follow-up post by Dgusakov and Mol_Eliza provides a framework for comparing capital efficiency across different bonding designs and fee structures, inspired by discussions with Micho during LidoConnect²⁶.

Why this is positive?

The CSM initiative promotes greater decentralization and inclusivity in the Ethereum ecosystem¹.
Community enthusiasm and commitment to develop user-friendly interfaces and potential integration of tools like Sedge by Nethermind²^,³^,⁴^,⁵^,¹⁰^,¹¹^,¹³^,¹⁴^,¹⁵^,¹⁹^,²⁴.
Skozin's view that the staking operations market is a positive-sum game, allowing operators to participate in multiple protocols efficiently²².
Randomishwalk's rationale for the higher fee structure for Node Operators, recognizing the benefits of scale²³.
Washosk's insights on including Solo stakers and adapting the CSM for fairness in the Ethereum validator landscape²⁵.
Eth Docker's potential integration with CSM, as discussed by Thorsten_Behrens, could simplify solo staking and support network diversity²⁷.

Why this is negative?

Concerns about the 10% limit, the 1% stake allocation, and the potential impact on Simple DVT²^,³^,⁸.
Fears that the proposal may favor bond setups over DVT configurations, potentially limiting staking diversity¹⁴.
Criticisms from Micho and Hanniabu about systemic risks and the need for clearer fee structures¹⁷^,²⁰.
Ongoing debate and the need for a balanced and thorough evaluation of the CSM's implications²²^,²⁶.

Next actions

There are no specific next actions mentioned in the provided summaries. However, the community may continue to discuss the integration of Eth Docker with CSM and the potential acceptance of a PR into the upstream as mentioned by Thorsten_Behrens ²⁷.

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