Lido Initiates Snapshot Vote To Seek DAO Approval For CSM v2 Deployment With Enhanced Governance And Operational Framework
In Brief
Lido has launched a Snapshot vote seeking DAO approval for the deployment of CSM v2, which introduces enhanced security, decentralization, and validator infrastructure.
Ethereum-based liquid staking platform Lido has initiated a Snapshot vote to obtain approval from the DAO for the deployment of Community Staking Module (CSM) v2.
This proposed upgrade represents an enhancement to the Community Staking Module, aiming to improve its overall security, operational efficiency, and decentralization features. The current proposal requests DAO authorization for the full implementation of CSM v2.
This includes the execution plan, finalized core parameters, the framework for identifying Community Stakers, a revision of the stakeShareLimit, and allocation of operational funding to the CSM Committee to manage reimbursement processes.
The proposal builds upon an earlier DAO-approved framework that confirmed the module’s design and architecture. If the proposal receives support, the process will proceed with an on-chain vote to upgrade to version 2 of the module, accompanied by a coordinated launch of all related components as outlined.
CSM v2 represents a progression in the development of the Community Staking Module, introducing compatibility with EIP-7002 to support more secure and flexible validator withdrawals. It also features an upgraded Performance Oracle for improved tracking of validator activity and performance, as well as the introduction of differentiated Node Operator types designed to establish a more structured and scalable operator model. Upon deployment, the module will support three categories of Node Operators: Permissionless, Legacy Early Adopters (EA), and Identified Community Stakers (ICS).
In order to advance decentralization within both the Community Staking Module and the Lido protocol, the Community Stakers Identification Framework has been introduced. This framework provides a formal process for evaluating applications from users interested in joining CSM under favorable conditions. Applicants are required to verify ownership of their addresses by signing and publishing a message. Each application is assessed based on three criteria: Proof-of-Experience, Proof-of-Engagement, and Proof-of-Humanity. Detailed descriptions of these categories, their sources, and associated scoring systems are available on the Lido Research Forum. If an applicant’s submission meets the required threshold in all categories, the associated address will be included in the next proposed amendment to the ICS list.
Modifications to the ICS list will be conducted through a specific Easy Track motion process. During each update cycle, members of the CSM Committee are responsible for verifying the batch of proposed changes, preparing an updated ICS list, and initiating an Easy Track motion to formalize the update. To streamline the initial rollout, the first ICS list will be derived from current CSM Early Adopter Node Operators who meet simplified evaluation criteria, as outlined in the associated forum post. The proposed initial ICS list is accessible via IPFS and through the Lido Research Forum.
If implemented, this framework will serve as a mechanism for contributors and CSM Committee members to recognize eligible independent community stakers and designate them under the “ICS” Node Operator category. Existing operators within the CSM ecosystem will also have the opportunity to qualify and transition to the ICS designation. Ongoing administration of the framework—including updates, score adjustments, and source management—is proposed to remain under the oversight of the CSM Committee.
A phased increase in the stakeShareLimit is proposed to facilitate broader adoption of CSM v2 capabilities and to further enhance decentralization across the Lido protocol. The initial adjustment will raise the CSM stakeShareLimit to 5% at the time of the CSM v2 release. Following an evaluation of stake distribution and validator performance, a subsequent increase to 10% is anticipated by late 2025 or early 2026.
Lido’s CSM v2 Undergoes Triple Audit Ahead Of Mainnet Launch, Compensation Mechanism Proposed For Unjustified Slashing Events
CSM v2 is currently undergoing a comprehensive security review through three separate audits conducted by Ackee, Statemind, and Code4rena. These audits are intended to ensure the integrity, reliability, and security of the on-chain code. The deployment of CSM v2 to the mainnet is contingent upon the completion of at least two finalized audit reports without any outstanding or unresolved issues.
The module incorporates a built-in mechanism for slashing, which permits the burning of bonded funds when a Node Operator fails to meet performance standards or engages in misconduct. However, the possibility exists for scenarios in which an initial determination results in a penalty, while a more detailed post-event analysis may indicate that the operator acted in alignment with the protocol’s expectations and policies. To address such cases, a provision is proposed whereby the CSM Committee would be authorized to issue compensation to affected operators if a penalty is ultimately deemed unjustified. This compensation mechanism would draw from a dedicated fund, initially backed by 10 stETH provided by the Gas Supply Committee. These funds are specifically earmarked for reimbursing Node Operators whose bonds were slashed under the CSM. In the event that the initial fund is exhausted, any additional compensation would require a funding request submitted to the Lido DAO.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
