Lido’s network of just 34 approved node operators manages roughly 8 million ETH, worth about $16.5 billion. This concentration spotlights a centralization issue beneath Ethereum’s liquid staking landscape, despite its large validator count. Dana Love, PhD, highlights that the validator number alone doesn’t reflect true decentralization, as most stake remains under a permissioned group rather than a broad, open market.
Curated Module v2 and Its Bonding Structure
The focus centers on Lido’s proposed Curated Module v2, which requires operators to post ETH bonds as collateral. The first validator key demands an 11 ETH bond, with subsequent keys requiring smaller amounts. This contrasts sharply with the Community Staking Module, where smaller operators post significantly lower initial bonds, reportedly 2.4 ETH for a first validator and 1.3 ETH afterwards. This system favors large, established operators by easing their capital requirements relative to the stake they manage.
Penalties for downtime, slashing, or mismanagement of execution rewards would be overseen by a nine-member Curated Module Committee using a multisig requiring six signatures. This governance setup further consolidates control among a small group, reinforcing the permissioned nature of Lido’s stake management.
