Update: Proposal for Permissionless Staking Module on Lido
Introducing the SSV Network’s Proposal for Lido’s Permissionless Staking Module
This article has been updated to include information on Clusterform’s role in filing the proposal.
Clusterform, an independent subsidiary of SSV Labs, has proposed a new permissionless staking module for Lido, aiming to expand the scope of node operators who can use the Lido protocol in a scalable and decentralized manner.
The Proposal
The firm proposed a permissionless staking module that leverages SSV Network’s Distributed Validator Technology (DVT) to integrate node operators (NOs) into the operator set of Lido on Ethereum.
If approved, the proposal would add the first third-party module for the Lido Staking Router, further decentralizing the set of node operators using Lido, according to a March 4 announcement shared with Cointelegraph.
Key Features of the Proposal
- Permissionless staking module for Lido
- Leverages SSV Network’s Distributed Validator Technology (DVT)
- Integrates node operators (NOs) into the operator set of Lido on Ethereum
Benefits of the Proposal
The module aims to enhance staking accessibility and security, according to Alon Muroch, the founder and CEO of SSV Labs.
“For NOs, a permissionless pathway to run stake for Lido as well as a seamless way to integrate DVT — strengthening their own operations.”
“For Ethereum, having more stakes run through DVT makes Ethereum more resilient and decentralized (different geographies, clients, and infra setups),” he added.
Institutional Interest in Ethereum Staking Grows
Institutional appetite for Ether staking products has been growing since Donald Trump’s victory during the 2024 US presidential election, partly due to expectations of a more crypto-friendly regime in the country over the next four years.
The proposal comes three weeks after the debut of Lido v3, an upgrade designed to offer greater flexibility and composability for institutional Ether (ETH) staking participants.
Current Challenges in Staking Infrastructure
Staking infrastructure still needs significant improvement to attract more participation from large financial institutions.
“Current infrastructure still has risks like single-points of failure and coordination issues,” Muroch said.
“By using SSV, coordination is programmatically taken care of (e.g., using DKG), which reduces human error, and by utilizing DVT, institutions can increase performance and reduce risk of downtime by distributing node operations between multiple nodes instead of relying on just one node.”
Conclusion
The proposed permissionless staking module for Lido, developed by Clusterform and SSV Labs, aims to increase the accessibility and security of staking for node operators (NOs) and institutional investors. The module leverages SSV Network’s Distributed Validator Technology (DVT) to integrate NOs into the operator set of Lido on Ethereum, enhancing the overall decentralization of the Lido protocol.
FAQs
Q: What is the purpose of the proposed permissionless staking module?
A: The proposed module aims to expand the scope of node operators who can use the Lido protocol in a scalable and decentralized manner.
Q: How does the module leverage SSV Network’s Distributed Validator Technology (DVT)?
A: The module utilizes DVT to integrate node operators (NOs) into the operator set of Lido on Ethereum, enhancing staking accessibility and security.
Q: What are the benefits of the proposed module?
A: The module aims to enhance staking accessibility and security, increase the number of node operators using Lido, and further decentralize the Lido protocol.
Q: What is the current state of staking infrastructure?
A: Staking infrastructure still needs significant improvement to attract more participation from large financial institutions, with current risks including single-points of failure and coordination issues.
Q: How does the proposed module address these challenges?
A: The module uses SSV’s coordination mechanism (DKG) to reduce human error and utilizes DVT to distribute node operations between multiple nodes, reducing risk of downtime and increasing performance.
