In a move that could expand the accessibility of ETH staking, Lido Finance, a leading liquid staking provider, has launched its “community staking module.” This initiative, following approval from Lido DAO community members, is designed to make Ethereum staking more inclusive — breaking the traditionally high technical and financial barriers to solo staking.
CMS will eventually become Lido’s first permissionless staking module, LidoDAO tech lead and community member Dmitriy Gusakov told The Block in an interview. At launch, the protocol will be restricted to participants in Lido’s “early adoption” period launched in early October, which includes Ethereum and Gnosis solo stakers, Obol Techne credential holders and others.
Once the mainnet is activated, anyone with 1.5 ETH will be able to become a node operator by bonding their tokens to earn validator rewards. That’s approximately $3,800 at current prices, though the subsequent set of validators will have a lower bond requirement of 1.3 ETH. Either way, that is much lower than the 32 ETH (~$81,000) it usually takes to spin up an Ethereum node.
Lido's CMS product is being launched during a period of debate about the future of Ethereum staking — the process by which the second-largest blockchain is secured — especially solo staking.
Among the chief concerns are whether solo stakers actually provide the same security benefits as larger, professional and often-centralized staking services that tend to concentrate the distribution of power on Ethereum.
Advocates for solo staking include Ethereum c0-creator Vitalik Buterin, who argues individual stakers decentralize the validator set, which helps the network remain censorship-resistant. However, people are incentivized to join staking pools due to the financial and technical roadblocks of spinning up a full node.
“With a user-friendly setup, CSM will be one of the most accessible Ethereum staking solutions for solo stakers. Unlike other solutions that require a higher bond, secondary forms of collateral, or complicated ticket mechanisms, CSM allows participants to use only ETH, making it an attractive option for those interested in contributing to Ethereum's decentralization,” Lido wrote.
Gusakov noted that launching the community staking module is a step towards addressing some of the controversy that’s trailed Lido since the protocol burst on the scene. Many argue Lido’s command of the staking market share has made Ethereum less secure and that there’s too much concentration of power among a few major token holders. Lido currently accounts for less than 30% of the staking marketshare, according to Dune Analytics.
“Ethereum is a protocol, and the community staking module is a protocol,” Gusakov said, arguing that Lido has been moving towards its goal of decentralization. Over 370 unique node operators joined the CMO testnet launched last June.
LidoDAO members pledged 60 million LDO tokens voting in approval of the release and activation of the CMO. It appears only a single voter putting up about 80 LDO tokens voted against the integration. The same account was the only person to vote against the proposal during the "objection phase."
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