Lido proposes new onboarding round for Ethereum node operators

Popular liquid staking solution Lido Finance announced plans for a new onboarding round to expand the Ethereum version of its protocol, following the successful launch of Lido V2. 

The previous onboarding round took place in June 2022, expanding the number of node operators participating in the protocol on mainnet to 29. The proposal, put forward by the Lido Node Operator Sub-Governance Group (LNOSG), seeks to strengthen the network and accommodate community demands for an increased node operator set.

The onboarding round aims to enhance client diversity, reduce the overall footprint of node operators relying on public cloud infrastructure and increase the presence of node operators outside of the United States and Europe to foster a more robust and decentralized ecosystem.

Assessment process and timeline

To streamline onboarding, Lido has devised a two-part evaluation system. The initial stage will focus on return-applicant node operators demonstrating exceptional performance in previous LNOSG evaluations. This approach enables expedited onboarding for qualified candidates. Another evaluation round will follow, focused on proposing additional new node operators.

LNOSG will then assess various key areas to determine the suitability of node operators. These areas include expertise in validator software and managing infrastructure at scale, key generation and management, infrastructure and client diversity, geographic and jurisdictional distribution, business continuity and disaster recovery.

Given that over 50% of Lido node operators on Ethereum connect to the Lighthouse or Prysm consensus clients and 84.5% to the Geth execution client, applicants are encouraged to utilize minority clients that improve client diversity. Considering that nearly half of the validators operated by Lido node operators run on public cloud platforms, reduced reliance on such providers is also highly encouraged. Additionally, the proposal urges applicants to locate validators in regions that enhance Ethereum's geographic distribution.

Applications are open until July 13, and following the evaluation of applications by the LNOSG, the LidoDAO will consider shortlisted candidates for approval. It is important to note that being shortlisted does not guarantee onboarding, as the DAO has the final decision and may modify or reject the proposed list based on community requests and further review.

Once approved, the onboarding process typically takes 1 to 3 weeks. Therefore, Lido expects the new set of operators to be live on the Ethereum mainnet in August.