Lido’s path to improving decentralization | Sabrina, Lido | ETHTaipei 2025

Transcript

[Music] Hi, good morning everyone. My name is Sabrina. Today I am going to talk about Lido's path to improving decentralization. Okay. Uh yeah I'm a contributor at lido in the node operate mechanism workstream and so I will talk about what is lido and basically uh walk you through what we have built in the past two years and just then where we are now and something we are building for the in the

future. Um so what is Lido? At a very high level Lido is a liquid staking protocol and currently uh we have over 9.3 is staked with us. Um the protocol is basically a middleware that connects stakers and node operators and it is governed on trend by the light. So um uh at the very beginning when Lido was launched in 2020 there was actually no modules and there was only something called a node

operator registry and this later becomes the curated module as we call it now. So back then at the start if you want to become a node operator in the curated module you basically need to wait for like on boarding window to open and when there's on boarding phase anybody or any organization are welcome to submit the applications and in the application you basically will share things like um about your organization about your team and how do you run your infrastructure and about your security

practice and this sort of information and then basically LA contributor would then review all the applications and then trying to set up meetings with all the different teams and so not not to just know the team better and also to understand what their experiences are. It can be outside of Ethereum as well like any other prostate chain and um also we will look at uh how do they like the validators they have run how do they perform in the past. Then so you can imagine this is a

pretty um time consuming process. So in the past there had been a total of five on boarding rounds for Ethereum and we have onboarded 39 different organizations to join the protocol. Um so here I have chosen two images to just show like some characteristic of this module. So on the in the top image it's basically how the stakes is being shared through all the other operators within the curated module and the second the second uh screenshot down is that um as we as I

described so basically this is a quite um selective process like to choose how which operator we work work with. So it's um so we work really closely together and I think something this is pretty cool is that because of the way it's working we were able to really push um how the client diversity has been improved. You can see uh at the bottom it was the blue bar is the is client uses for the gas and it from 84% and you can see after one years of uh one year of progress it went down all

the way to uh I think 46%. Yeah. So in order to address um the kind of shortcoming of a single modular design basically on like so in May 2023 uh Lido V2 went live as a staking router uh right after Chappella upgrade. So what is staking router? basically um introduce a change that it is now possible to design and develop different modules that is um possible to on board like basic modules for uh many different kind of

characteristics. So it is possible to allow a more diverse validator ecosystem and yeah. Okay. So soon after uh the launch of the staking router two new modules were introduced. The first one is a simple DVT module and then followed by um community staking module. All right. So what is the what does simple DVT mean? Uh so DVT stands for distributed validator technology. You can kind of think it as like a multisig

but for validator. So it you will work in a group and basically it will be a threshold either like three out of four, five out of seven or seven out of 10. And in the case for the symbol TVT module, we are all uh uh a cluster of seven. Um so what is special here? So since you are working a group and you have seven people and everybody within the cluster you are free to choose um the clients you run like different is execution client different consensus clients and you can also have um the infrastructure from different part of the

world. Um so it kind of it makes like a a single validator much more resilience in this way. uh we so the module was initially launched with only half percent of the share limit but uh based on the really strong performance we observe uh later it is increased to 4%. So 4% sounds like not a lot, but if you like put to like numbers, it's slightly over 11,600 validators or about 1.1% of the all Ethereum validators that currently

active running today. Um yeah. So what is um really um I think what is this module the most important part from this module is it's due to the characteristic of the simple DVD technology like much more community staker will be able to join uh the lighter protocol and run validators. Okay. Um just a little bit numbers here. Uh so the module was officially launched in February 2024 and we overall it has attract over we have onboarded over 128 solo and community

stakers. Okay. And then finally uh our last uh module which is called a community staking module. It is the first permissionless module within lido and um what are the key points for this community taking second module. So the most diff uh the the biggest change here is that instead of like on boarding practice this anybody can join this module and what is also really cool is the design for this they are very um the UI is user very user friendly and there are also very easy integrations and

online resources that really uh encourage anybody to join. So this module was at the beginning launched last year October with a early adoption phase and it finally went fully permissionless in 2020 in February this year and so far we have um so far there are over 300 independent node operators actually joined and they are running over 5800 validators. Okay. So all right just to show what like so in order like to see how the decentralization go actually going um one of the easiest and way to see is

just to see how many people are actually participating in the protocol and so here is some numbers on three different modules and so some people actually participated in more than one modules as you can see here. Uh just a little note like since community staking modules are completely permissionless we are not able to like 100% sure if there are uh seo there. So that's like we we try uh some algorithm and some research to try to make this number as uh close I mean as as as good as possible but this is this and another thing we can look at and quite often being looked at is what

are the geographic distribution of all the the validators and so on the top uh image it is the distribution for the curated module. What is really cool is that um in one of the I think on the fifth round of downwarding we really want to because like all the validators most commonly are running either in USA or Germany and there was really a lot less uh participation in Asia also in South America and uh that run we managed to find some really cool node arbittors join and they are running in uh Chile, Brazil and Argentina.

And then the second images is for um simple DVD module. As you can see there are um more footprint in different part of the world. I mean if you just count the country is not maybe still not uh super cool but I mean it's so good progress. And now um I don't have the status yet uh but in Q1 uh we hope to publish the report uh maybe in April and this is for the community staking module. We uh kindly uh ask if uh no collaborations are okay with it. They can submit uh information on how they run their infrastructure. So we can share all this information with the

community. Um so that's all the modules we have now and for the and currently there are two more proposals and discussions on where we can go for now continue in the future. Yeah. The first one is called SSVLM and it is basically a proposal for permissionless staking and um for using S SV networks DVT technology. So what is the difference between this one and the current simple DVT module the difference is that uh as I said like the in each cluster you are running by a group of people. So you can imagine there's a lot of coordination that's

needed and in the current simple DVD module all these complexity and coordination are still uh coordinated by someone and in a simple DVT module all these will be abstracted away by the module itself and the second one which is currently no proposal yet but just like uh on the discussion of the features. So um for in order to further scale the ST community staking module and also just to address some of the limitations in V2 there is a concept that's introduced I think it's pretty cool. It's basically to um allow like a very specific way for

node operators. So different operators they will they can participate and kind of join in a specific way. So it's kind of get sealed with like um and then for different operators you will you can set different like for example reward share and this sort of parameters for them. Um yeah so that's um basic my presentation today and um if you are interested in uh seeing how the lid node operator set has been growing uh since the beginning actually you can go check the report you have you can see all the information published since from 2021 um and welcome to reach out if you have

any question later. Thank you. Thank you, Sabrina. Um, please get me whitelisted for the CSMV2. Um, I have been waiting for two months already. Come on. [Music]