Where we’re already succeeding
| Scorecard Attribute | Category | Self-Assessment | Comment |
|---|---|---|---|
Legally and physically unrelated | Validator set | Good | |
Operators run their own nodes (no white-labeling) | Validator set | Good | |
Good performance | Validator set | Good | |
Operators should earn well enough to build a profitable, dependable business on staking | Validator set | Good | |
Lido’s hostile takeover via a hard fork is possible | Security | Good | As discussed in our The Next Chapter for Lido article, as a very last resort (in the case of governance capture) we have made it trivial for Ethereum core developers to revoke Lido’s current permissions and transfer them to a community-owned contract. |
Lido can’t change validator set at will | Governance | Good | Lido currently only has soft power over its Node Operators. Withdrawals and triggerable exits will change this balance, but at the same time permissionless elements will be added to the validator set. |
Where we’re doing well, but can improve
| Scorecard Attribute | Category | Self-Assessment | Comment |
|---|---|---|---|
No operators with over 1% of total stake of Ethereum through Lido | Validator set | Okay | A few operators between 1% and 2% |
Distributed geographically and jurisdictionally | Validator set | Okay | Overreliant on Europe and USA |
Distributed variation of on-premise infra and different cloud providers | Validator set | Okay | Not enough on-premise infra setups |
Best practices in security and key management | Validator set | Okay | Threshold based validation would be more robust |
Client Diversity | Validator set | Okay | Prysm is not the dominant client in Lido (>58% minority client usage), but share of smaller clients could be higher.
Additionally, more work to be done on Execution Layer client diversification |
Lido’s smart contracts have the best security possible | Security | Okay | Thorough and multiple audits are undertaken on all smart contract upgrades, but no formal verification or symbolic execution based tests |
Withdrawals are non-custodial and trustless | Security | Okay | Lido validators until July 2021 were created with threshold signature BLS withdrawal credentials; as of July 2021, Lido validators are on smart contract withdrawal credentials. The percentage of all Lido validators with threshold BLS withdrawal credentials is ~15% and steadily decreasing as new validators are added.
Lido intends on rotating these validators to 0x01 (smart contract) withdrawal credentials as soon as possible, i.e. with the Capella Hardfork .
The current Lido withdrawal smart contract is a stub, and will be upgraded to a fully-functioning withdrawal contract once the withdrawal specs are finalized. |
Where our next priorities lie
| Scorecard Attribute | Category | Self-Assessment | Comment |
|---|---|---|---|
Lido governance has significant safeguards | Governance | Needs Improvement | Currently, there is no timelock between DAO vote finalization and execution. Lido is actively working on implementing more safeguards to the governance process. |
There’s a robust set of Lido governance delegates | Governance | Needs Improvement | Lido DAO currently has vote delegation for Snapshot votes; however, the delegate set is limited and significant amount of voting power is undelegated and dormant.
Lido is working on improving the delegate set and educating DAO members about vote delegation. |
Delegation is enabled in onchain Lido governance | Governance | Needs Improvement | Currently, delegation is only enabled for Snapshot votes. Lido is actively researching possible mechanics for onchain delegation. |
There's a way for new operators to enter the set and prove themselves | Validator market | Needs Improvement | Lido is actively researching ways to allow permissionless operators to join its validator set, including working with SSV Network and Obol on DVT, as well as exploring ways for solo stakers to participate in the protocol. |
There's a way to reduce stake to operators who do not conform to Lido standards | Validator market | Needs Improvement | Lido is working on stake (re-)allocation mechanisms based on performance and off-chain attributes, as well as developing and lobbying for solutions to allow for penalizing malicious actors (e.g. triggerable exits). |