Lido on Ethereum
Scorecard
Keep track of the latest updates on how Lido is performing against its goal of being decentralized, trustless, governance-minimized and ethos-aligned with the Ethereum community.
Lido DAO’s purpose is to keep Ethereum decentralized, accessible to all, and resistant to censorship.
Lido DAO’s mission is to make staking simple, secure, and decentralized.
And the endgame is a world in which Ethereum is the co-ordination and value layer of the internet.
As the Protocol specification and related technologies evolve, the commitment to achieving a vision of trustless, governance-minimized, and ethos-aligned liquid staking remains steadfast.
The scorecard below shows how the Lido ecosystem is doing. Feedback from everyone is welcome on the research forum.
Already succeeded
| Scorecard Attribute | Category | Self-Assessment | Comments |
|---|
Doing well, but can improve
| Scorecard Attribute | Category | Self-Assessment | Comments |
|---|---|---|---|
| Distributed geographically | Validator set | Okay | As of Q4/2024, around 22% of validators are operated by North-America (US+Canada) based Node Operators, but there remains an over-reliance on European based entities. Improvements have been noted in not only the addition of Asian and South American-based operators, but also the distribution of validators across under-represented geographies. However, the community can continue to promote geographical diversity. Latest stats can be found here. |
| Best practices in security and key management | Validator set | Okay | In the Curated Operator module, keys are managed by professional node operators. As of the Q4/24, 23.1% of validators in the module utilize Attestant’s Vouch CL client. While Vouch utilization does not directly correlate to usage of Attestants Dirk key manager that includes threshold signing, it is roughly indicative. In the Simple DVT Module, participants utilize Obol and SSV Network based DVT. All validator keys are created through a Distributed Key Generation process, with no single Node Operator (or other party) controlling a full private key at any point of their existence. |
| Node operators are disincentivized from acting maliciously | Validator set | Okay | Currently, if Node Operators don’t process exits on time (in other words, try to block users from obtaining their withdrawn ETH), they suffer penalties (automatically enforced by the protocol, as well as reputational). There have been 0 incidents of non-exit, and one case of delay. Triggerable Execution Layer exits, expected in early 2025 via the Pectra hardfork, will make it possible to exit validators based on a DAO vote. |
| Lido DAO can’t suddenly change the validator set | Validator set | Okay | As it stands, LDO holders cannot force Node operators to exit. Even if triggerable exits were live today, it would still take the DAO half a year, at a minimum, to rotate all validators (due to the mechanics of how the staking queue works). In order to create additional checks and balances on Lido governance, dual governance has been proposed. It gives stakers the ability to withdraw their ETH in the event of a proposal that would change the validator set, while also enabling them to express concerns about it. The onchain vote to deploy Dual Governance is estimated to occur in early 2025. |
| There’s a robust set of governance delegates | Governance | Okay | Public Delegate Platform and Delegate Incentivization Program were established in August 2024. In Q4, 2024 Lido DAO has 7 delegates with more than 2M LDO delegated to each on-chain, which makes them eligible for incentives. You can see all the public delegates here and check delegates' voting participation here. |
| DAO goals are easily accessible | Governance | Okay | The GOOSE framework is utilized to set one-year and three-year goals. The goals for 2025 were adopted in November 2024, marking a new focus for the upcoming year. |
| Distributed variation of on-premises infra and cloud providers | Validator set | Okay | Reliance on public cloud has remained stable at 50% in Q4/2024. The usage is balanced against forms of Bare Metal (Colocated, On-Premises or Dedicated Hardware). Details can be found in the Lido VaNOM web-app. |
As of Q4/2024, around 22% of validators are operated by North-America (US+Canada) based Node Operators, but there remains an over-reliance on European based entities. Improvements have been noted in not only the addition of Asian and South American-based operators, but also the distribution of validators across under-represented geographies. However, the community can continue to promote geographical diversity. Latest stats can be found here.
In the Curated Operator module, keys are managed by professional node operators. As of the Q4/24, 23.1% of validators in the module utilize Attestant’s Vouch CL client. While Vouch utilization does not directly correlate to usage of Attestants Dirk key manager that includes threshold signing, it is roughly indicative. In the Simple DVT Module, participants utilize Obol and SSV Network based DVT. All validator keys are created through a Distributed Key Generation process, with no single Node Operator (or other party) controlling a full private key at any point of their existence.
Currently, if Node Operators don’t process exits on time (in other words, try to block users from obtaining their withdrawn ETH), they suffer penalties (automatically enforced by the protocol, as well as reputational). There have been 0 incidents of non-exit, and one case of delay. Triggerable Execution Layer exits, expected in early 2025 via the Pectra hardfork, will make it possible to exit validators based on a DAO vote.
As it stands, LDO holders cannot force Node operators to exit. Even if triggerable exits were live today, it would still take the DAO half a year, at a minimum, to rotate all validators (due to the mechanics of how the staking queue works). In order to create additional checks and balances on Lido governance, dual governance has been proposed. It gives stakers the ability to withdraw their ETH in the event of a proposal that would change the validator set, while also enabling them to express concerns about it. The onchain vote to deploy Dual Governance is estimated to occur in early 2025.
Public Delegate Platform and Delegate Incentivization Program were established in August 2024. In Q4, 2024 Lido DAO has 7 delegates with more than 2M LDO delegated to each on-chain, which makes them eligible for incentives. You can see all the public delegates here and check delegates' voting participation here.
The GOOSE framework is utilized to set one-year and three-year goals. The goals for 2025 were adopted in November 2024, marking a new focus for the upcoming year.
Meanwhile, the current goals, adopted in November 2023, were adjusted in May 2024 (reGOOSE), remain active and relevant.
Reliance on public cloud has remained stable at 50% in Q4/2024. The usage is balanced against forms of Bare Metal (Colocated, On-Premises or Dedicated Hardware). Details can be found in the Lido VaNOM web-app.
Needs Improvement
These attributes need work, and below is information about what contributors are already doing as solutions and improvements.
Improvement proposals and comments are welcome from anyone.
| Scorecard Attribute | Category | Self-Assessment | Comments |
|---|---|---|---|
| Governance has significant safeguards | Governance | Needs improvement | The governance process includes 3 steps: discussion, off-chain vote, and on-chain execution which make all changes publicly socialized before implementation. |
| There is a way for stakers to resist malicious governance capture | Governance | Needs improvement | Lido on Ethereum, governed by LDO token voting, manages various aspects including the treasury, withdrawal keys, and lists of nodes or oracles, effectively granting root access to the voting app. Dual governance allows stakers to withdraw their ETH in the event of a contentious proposal, while also enabling them to express concerns about its contentiousness. When a specified amount of stETH accumulates in the DG veto vault, execution of LDO governance motions is paused unless the stETH in the vault is withdrawn. The design includes multiple safeguards and potential de-escalation mechanisms. A Snapshot vote on this proposal passed, with on-chain deployment slated for Q1 2025. |
The governance process includes 3 steps: discussion, off-chain vote, and on-chain execution which make all changes publicly socialized before implementation.
A two-step Aragon voting is used with objection periods, where only 'against' votes are possible in the second phase.
Currently, operators act as a check on LDO power since they cannot be forced to exit.
Dual governance allows stakers to withdraw their ETH in the event of a contentious proposal, while also enabling them to express concerns about its contentiousness. Onchain vote to deploy expected in Q1 2025.
Lido on Ethereum, governed by LDO token voting, manages various aspects including the treasury, withdrawal keys, and lists of nodes or oracles, effectively granting root access to the voting app. Dual governance allows stakers to withdraw their ETH in the event of a contentious proposal, while also enabling them to express concerns about its contentiousness. When a specified amount of stETH accumulates in the DG veto vault, execution of LDO governance motions is paused unless the stETH in the vault is withdrawn. The design includes multiple safeguards and potential de-escalation mechanisms. A Snapshot vote on this proposal passed, with on-chain deployment slated for Q1 2025.