Interested in becoming a Lido Node Operator (NO)?
Click to see which networks are currently onboarding new operators:
Lido on Ethereum Onboarding
Onboarding rounds are opened on an ad hoc basis as Lido seeks to balance decentralization, node operator profitability, and the overall security of Lido's liquid staking solutions. Currently, the Lido on Ethereum operator set is permissioned (i.e. operators are chosen by the DAO to run validators) given the resiliency requirements and increased risk of managing validators at scale.
The Lido Node Operator Sub Governance group (LNOSG) periodically opens onboarding rounds to balance these aforementioned factors. To learn more about the guidelines used to assess applicants please see the Lido Operator Set Strategy. Upon the LNOSG’s submission of a shortlist of Node Operator candidates to the DAO, the candidates are voted upon by the DAO and, if confirmed, become Lido Node Operators.
From this point on, user-deposited ETH to be staked by Lido is allocated to validators which are run by node operators.
Best Practices & Requirements
The only requirement is that Node Operators run and maintain their own infrastructure (i.e. no use of white-label services). Exceptions may be made in special cases where an infra provider has a special relationship with the Node Operator and the Node Operator and the infra provider may be considered and treated as a singular entity (i.e. the infra provider would not be allowed to provide similar services to other Node Operators, and the relationship would be public).
Currently, Lido does not specify best practices or standards for Ethereum validators in order to reduce the potential for single points of failure, however an exemplary level of proficiency is expected across the categories of:
- Expertise with the inner workings and maintenance of node software, especially running validators at scale
- Key Generation and Management
- Infrastructure and Client Diversity
- Business Continuity
- Geographic and Jurisdictional distribution
As part of Lido’s roadmap to decentralization on Ethereum, we will continue to hold onboarding rounds as market conditions allow as we work towards permissionless validation. The Lido forums are the best place to keep track of future onboarding announcements and other DAO discussions.
If your organization is already operating validators and is interested in learning more about becoming a Lido Operator please send an email to firstname.lastname@example.org.
Onboarding Process Overview
After submitting your application the Node Operator Management (NOM) and LNOSG will evaluate your application. If it is determined a “proof of team” call is necessary or there are outstanding questions from either the evaluator or applicants perspective, a call will be scheduled with LNOSG members invited to attend.
Upon evaluation of the applicant set, the LNOSG will propose a shortlist to the DAO with the intent to be voted in to the operator set. Upon submission of the shortlist the NOM team will email all applicants with the results of the evaluation, feedback from the LNOSG, and any potential next steps.
Lido takes a 10% fee of all Ethereum staking rewards collected through the platform. This fee is split equally between the Lido DAO (5%) and the Lido on Ethereum Node Operators (5%). The Node Operator’s (NO) portion of the fee is distributed between active NOs proportionally to the number of validators that each NO runs.
The reward for NOs is delivered in stETH backed 1:1 with ETH, meaning liquidity is immediately granted to active NOs despite ETH still being locked on the Beacon Chain.
Lido is currently undergoing a “soft-rollout” of the MEV-Policy adopted through Snapshot voting on September 15, 2022.
The policy calls for Lido Node Operators to adopt MEV-Boost infrastructure across their mainnet infrastructure setups by 2022/10/31. The decision to adopt MEV-Boost aligns with the goal of the Ethereum community to move towards a PBS system where block building is separated from the proposal of blocks. MEV capture is an important income stream that will need to be collected through Lido related validators and returned to stakers in order to continue offering an attractive value proposition. Lido has adopted a policy that seeks to minimize MEV hiding and decrease the power that Lido holds over the network (through separating block building and proposing) while seeking to maximize staking APR.
Operators will source blocks from DAO-vetted relays (see LIP-17 for details about where the vetted relay information will be stored and how they may be retrieved by Node Operators) which are currently undergoing a testing period. To learn more about the relays currently in use, please see Lido on Ethereum: Call for Relay Providers.
Lido’s policy seeks to provide Node Operators flexibility to adopt a block proposal strategy that conforms to their determined legal requirements while protecting both the interests of the broader Ethereum ecosystem and Lido stakers.
Node Operators have no obligation to use censoring or non-censoring relays, but must include as many relays as possible as allowed by the “must-include” and “allowed” relay lists.
While a source of confusion for many, MEV-Boost infrastructure itself does not censor transactions and Lido operators are encouraged to use non-censoring relays when possible. The policy is formulated in a way such that in an ideal scenario all relays (both censoring and non-censoring) would be enabled by all operators, but does not force operators to take risks they feel exposed to.
Post merge, validators began to collect transaction fees in addition to extracted MEV. With the successful passing of LIP-12, transaction fees are now accrued to stETH stakers with the normal 10% protocol fee (5% to the Lido DAO / 5% to NOs) taken.
Node Operators will configure their
FeeRecipient address to the
LidoExecutionLayerRewardsVault with address details found: https://docs.lido.fi/deployed-contracts/#core-protocol
To track contributions to the
LidoExecutionLayerRewardsVault see the public Dune analytics dashboard: https://dune.com/queries/1273676
- Lido Operator Set Strategy
- Node Operator Manual
- Migalabs Analysis of Eth2 Consensus Clients
- Ethereum Launchpad Merge Readiness Checklist
- Somer Esat Guide to Staking on Eth2
- CoinCashew Staking Guide
- Attestant: Introducing Dirk
- Attestant: Introducing Vouch
- Attestant: Protecting Validator Keys
- Modelling the Impact of Altair