Lido CSM
Last updated
Last updated
The is the first module with permissionless entry, allowing any node operator to operate validators by providing an ETH-based bond as security collateral
Recall that running bonded validators via the Lido CSM does not require setting up a separate service on your hardware.
Instead, you simply tweak the parameters of the following steps of the native solo staking setup.
while setting the withdrawal_address to the .
Mainnet:
Holesky:
For the validator client, set the fee_recipient flag to the Lido Execution Layer Rewards Vault either or
Mainnet:
Holesky :
Import the newly generated CSM keystores
For the ,
the-min-bid flag may be configured either at MEV-Boost level or at the CL client, the current acceptable maximum value for min-bid is 0.07 and may change.
On the consensus layer client, set the builder-boost-factor (or equivalent flags) to 100%. i.e., local and builder payloads should be treated with equal weights.
The -relay flags should be set to a list of values only using relays from the the (refer to "Key settings to note" section).
Mainnet: Select "Mainnet Active + Vetted" tab. You can choose only from relays tagged with (must use some) and (may use), and must choose at least one tagged with (must use some).
Holesky : Select "Holesky Only" tab
pertaining to your CSM keystores onto the Lido CSM Widget and provide the required bond amount in ETH/stETH/wstETH
Mainnet:
Holesky :
Wait for your CSM validator keys to be deposited by Lido and make sure your node remains online in the meantime!
As an overview, the Lido CSM deposits valid validator keys uploaded by node operators if the minimum bond required has also been provided.
Solo stakers receive rewards from 2 sources:
Bond rebase: staking rewards generated from the bonded tokens ((w)stETH)--e.g., 90% * ETH PoS staking yield * total ETH bond provided
Node Operator rewards: 6% share of rewards from the active validator keys deposited by the Lido Protocol with possible reductions for bad performance--e.g., 6% * ETH PoS staking yield * total validator keys deposited (32 ETH each) - poor performance penalties
Rewards smoothing across all Lido modules (e.g., block proposer rewards, sync committee rewards)
Rewards socialisation among validators whose performance exceeds a certain threshold and underperforming validators will receive no node operator rewards for the given frame
The required bond amounts can be provided by anyone, although it will most likely come from the node operator using the CSM (CSM operator) themselves.
The bond provided serves as a deterrence against dishonest behaviours and poor performance by the node operator. e.g.,
MEV theft: If detected, a fine will be imposed by burning part of the node operator's bond and an amount of bond equivalent to the stolen amount will be locked until it is made whole.
Slashing events: Slashing penalties will be deducted from the bond amount and burnt
Sustained poor performance: If the effective balance of any validators fall below 32 ETH, the shortfall will be deducted from the bond amount and burnt
These events will cause the net bond balance of the CSM operator to fall below the required threshold.
In this scenario, the CSM node operator will cease to accrue rewards on their validator keys deposited by Lido CSM until:
The CSM node operator tops up the shortage
New rewards generated by the CSM node operator fills up the shortage--e.g., All new rewards will be used to replenish the bond shortage until it is back to the required level
On the other hand, because the bond is provided in stETH (which rebases in quantity), the bond balance of CSM operators will increase over time, above the required threshold.
Excess bond balance, together with accrued rewards, will be claimable by CSM operators from the CSM Web App.
There are 2 main addresses used by CSM operators.
Rewards Address: This is the address that all accrued rewards and excess bond amounts will go to when claimed. Rewards Addresses can change Manager Addresses but Rewards Addresses can only be changed by itself.
Manager Address: This is the address that can trigger the claiming of all accrued rewards and excess bond amounts to the Rewards Address. The Manager Address can also upload/remove new/existing deposit data files. The Manager Address cannot change the Rewards Address.
Upon creation of a Node Operator these addresses are set equal, but they can be changed afterwards.
It is recommended to use different addresses for security reasons. A hot wallet may be used for the Manager address to simplify daily operations, while a cold wallet is preferable for the Rewards address to enhance security. Node Operators are solely responsible for the security of the private keys related to these addresses.
For example, CSM operators with their hot wallet addresses included in the Early Adoption list can change their Rewards Address to a more secure address
During the validator key generation step, generate a number of validator keystores along with the deposit data file while setting the withdrawalAddress field to the Lido Withdrawal Vault.
During the validator client setup step, set the fee_recipient flag to the Lido Execution Layer Rewards Vault.
Method 1: Set the fee_recipient address per validator key
Method 2: Spin up a new validator client service specifically for your CSM validator keys so that you can retain your own fee_recipient address for your solo staking keys.
Set the -min-bid flag or set it to 0.07
Mainnet: Select "Mainnet Active + Vetted" tab. You can choose only from relays tagged with “must use some” and “may use”, and must choose at least one tagged with “must use some”.
Holesky : Select "Holesky Only" tab
To verify that your validator pubkeys have been successfully registered onto the builder network, look out for the following lines in your logs.
Validator client logs: Validator *** 1 out of 1 validator registration(s) were successfully sent to the builder network via the Beacon Node.
Mev-boost logs: level=info msg="http: POST /eth/v1/builder/validators 200" duration=0.076901 method=POST
You can verify the latest MEV Relay List for the Lido CSM below.
Steps to verify list of approved MEV Relays:
Go to the Etherscan link above and it will bring you to the MEV Relay Inclusion List used by the Lido CSM
Under Contract>>Read Contract>>4. get_relays>>Query
A list of relay endpoints will appear under this section 4. get_relays. Verify that you are only using relay endpoints from this list.
Follow this guide from until you have your and set up
while setting the withdrawal_address to the .
Mainnet:
Holesky:
Set the fee_recipient flag to the Lido Execution Layer Rewards Vault either or
Mainnet:
Holesky :
For the ,
the-min-bid flag may be configured either at MEV-Boost level or at the CL client, the current acceptable maximum value for min-bid is 0.07 and may change.
The -relay flags should be set to a list of values only using relays from the the (refer to "Key settings to note" section).
pertaining to your CSM keystores onto the Lido CSM Widget and provide the required bond amount in ETH/stETH/wstETH
Mainnet:
Holesky :
Join here:
Join here:
Further, CSM operators will enjoy 2 additional rewards features described in more detail :
More details on bond mechanics .
More details on Rewards vs Manager addresses .
These settings are part of the expectations for all node operators participating in the CSM. Read more .
Mainnet:
Holesky:
You will then upload your deposit data file in the . Make sure you complete the remaining steps on this page before that.
Mainnet:
Holesky :
For existing solo stakers, you can set the fee_recipient address in one of 2 ways in :
During the MEV-Boost setup step, set the -relay flags only to the
Holesky:
Mainnet:
Teku CL (action: set to 100),
Prysm CL (action: set to 0),
Lighthouse VC (action: set to 100),
Nimbus CL (action: set to 0), ,
Lodestar VC (action: --builder.selection = ‘maxprofit’),
