Community staking module

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The Lido DAO's Community Staking Module (CSM) aims to decentralize Ethereum staking by attracting independent node operators, offering competitive rewards and a user-friendly experience, with a mainnet launch targeted for 2024. While the initiative has garnered support for its potential to enhance network security and fairness, it also faces concerns over its fee structure, the impact on staking diversity, and systemic risks to Ethereum.

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_Behrens27.

Posted 25 days ago

Last reply 9 days ago

Summary updated 9 days ago

Last updated 04/12 00:24