[DIP-38] Incentivized Mainnet Program Exception for Lido Curated Operators

Abstract and Motivation

Following the Lido DAO’s decision to permit Curated Operators to utilize Distributed Validator Technology (DVT), an exception to the Incentivized Mainnet Program (IMP) is required to distribute incentives for these new participants appropriately.

IMP rewards for all Lido-related DVT participants, including Simple DVT (SDVT), Curated, and the Community Staking Module (CSM) operators, will be handled by the same dedicated Merkle Distributor contract established in DIP-22. This proposal aims to approve the inclusion of Curated Operators within the existing Lido IMP incentive framework and to update the data source for reward calculations. The necessary technical adjustments for proper distribution are largely already in place.

Proposal Particulars

  • Lido Exception
    • Mechanics and Effectiveness
    • Reward Distribution and Claiming

Lido Exception

Mechanics and Effectiveness

Based on the above abstract and motivation, the following exception shall be made to integrate Curated Operators into the IMP:

  1. Distribution Contract: The existing Distribution Contract, as defined in DIP-22 and DIP-30, utilized for SDVT and CSM-allocated IMP rewards, shall be used to store all Lido-related IMP rewards (SDVT, CSM, and the Curated Operators).

  2. Adjusted Calculation and Data Source: The Incentivized Mainnet Administrator (hereinafter: “Administrator”) will facilitate the modification and configuration of the regular IMP calculation script to include rewards accrued by Curated Operators. This will primarily involve confirming and updating the Dune Query link used in the IM script to reflect the new data source that encompasses validators of Curated Operators. The configuration and adjustments to the scripts and calculations shall be made public and reported together with the regular IMP reporting by the Administrator. Outside of this data source update, no other adjustments are needed by the ssv.network DAO, as Lido will handle the incentive split on its own.

  3. Lido DAO contributors, coordinating with contributors from the Mellow Protocol, as the responsible party for rewards allocation, will continue to provide public reporting as agreed in DIP-30 with the following modifications:

    1. On a monthly basis, publish a follow-up post with the distribution data, which can then be used as input to the reward distribution facilitated by the Administrator. Contributors will do their utmost to provide data before the 17th of the following month.
  4. Based on the monthly distribution data provided by Lido contributors, the Administrator will use this input as-is to calculate the rewards using the adjusted IMP script for Lido exceptions, compute a corresponding merkle tree, and set the merkle root for the Distribution Contract accordingly. The ssv.network DAO and the Administrator will assume the correctness of the data provided by Lido contributors and will not make any modifications to the input data.

This exception aims to be effective immediately after the passing of this vote, as Curated Operators using SSV are targeted to be live by the end of July/early August.

Reward Distribution

CSM, SDVT, and now Curated Operator rewards will be claimable monthly in the same manner as defined in the regular IMP and its previous revisions. This is proposed under the assumption that Lido contributors are publishing the necessary information to calculate the rewards in time, according to the Mechanics section. If, for any reason, the calculation is delayed or unforeseen challenges arise, the Administrator should announce the delay during regular reporting and update the reward calculation on the next round.

3 Likes

It makes total sense to include Lido Curated module rewards on the same bag/process as SDVT & CSM. Then, Lido can decide how they want to distribute them to their LST holders.
As long as they pay the network fees, as any validator, all good. Love to see SSV adoption growing by day!

2 Likes

Totally agree, streamlined incentives and more SSV adoption is a win-win. Let’s keep the momentum going!

1 Like

We support DIP-38 and the inclusion of Lido Curated Operators in the Incentivized Mainnet Program. The use of the existing Merkle Distributor contract ensures consistency and simplifies the implementation. Updating the reward calculation script and Dune Query is a practical approach. I appreciate the continued transparency from Lido and Mellow contributors through monthly reports. However, I recommend publishing a hash or checksum of the data for community verification. Looking forward to seeing Curated Operators go live and strengthening DVT adoption.

2 Likes

Voting is now live :vertical_traffic_light:

https://snapshot.box/#/s:mainnet.ssvnetwork.eth/proposal/0xee1a18a2618b51292dcffdfe1bbadccae203be033047ea5df541db9984938e90

@fod
@spookyg
@derfredy
@h.m.23-0neinfra
@markoinether
@axblox
@flo
@thomasblock
@yuting
@damon
@lemmagov
@llifezou
@blockside
@sigmaprime
@kenway
@hashkeygov
@Ethernodes
@p2pgov
@chainupgov
@kiln
@Allnodes

2 Likes

Other Lido modules (SDVT and CSM) have been incentivized previously, so I see no impediment to also opening up to the permissioned Curated module involving professional node operators. From a technical standpoint, there should be no issues since the same Merkle Distributor contract established in DIP-22 is being reused, while from the standpoint of expanding DVT adoption, the entry of new players will bring a greater number of DVT technology users, resulting in improvements to the software itself.

2 Likes

Isn’t the counterargument here that this could rapidly deplete IM funds to the benefit of a very small set of users?

1 Like

Thank you for your question, @Hackworth. My understanding is that this is simply a redirect of IMP rewards that would otherwise go directly to the all registered validators. To my understanding, this will have no impact on the IMP itself and will allow Lido to distribute the rewards generated by Lido funds according to their reward splits, among Lido and the operators.

Do I misunderstand your question, or is there some ambiguous wording in the above proposal?

1 Like

Hi Ben, I think you understood my question correctly, thanks. In the context of our other discussion relating to independent operator sustainability, I’m just pointing out that I think this will result in a large number of new IMP claims, with all of those rewards flowing to Lido and one small group of extremely large operators. I suppose the question is, do we want that, even if it grows the ecosystem? Is that healthy growth?

I ask, though I’m not sure I myself have an opinion of the answer.

1 Like

Oh, got it. Understood!

As it stands, growth is still massive, and the DAO needs to address and extend the IMP soon. This would be the ideal place to discuss the future of the IMP and its overall goals. I think a proposal will be up for discussion in the next 1-2 months. We’ll inform all core contributors ahead of time once the process has started to get early comments. Thanks a lot!

1 Like