In order to democratize solo staking on Ethereum (ETH), the Lido DAO has launched a new functionality allowing its validator to be deployed at a reduced price. How does it work?
Lido launches community staking module on Ethereum
Since Ethereum's transition to Proof-of-Stake (PoW), 34.5 million ETH are now used to secure the network, or more than 28.6% of the total capitalization of the asset. While it is perfectly possible to host your own validation nodes at home, it must be recognized that the majority of said nodes are administered by specialized operators, to which individual investors delegate their ETH.
In order to democratize a little more the “ solo staking “, the decentralized autonomous organization (DAO) of Lido voted to launch a community staking module (CSM).
💡 How to stake on Ethereum (ETH)?
Thanks to this new feature, it is now possible to launch your own validator node solo with “limited” resources. Indeed, instead of the 32 ETH deposit initially necessary, this minimum is set in a range between 1.3 and 2.4depending on the number of validators deployed. The missing portion of guarantee necessary for the operation of this node can then be supplemented by the community, as is currently the case for mutuality staking services.
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Thus, the CSM can be seen as a way to better decentralize Ethereum :
The ultimate goal of this module is to enable entry without access restrictions for operators of Lido nodes on Ethereum and to give freedom to the participation of solo stakers in the protocol, thus increasing the total number of operators of independent nodes throughout the Ethereum network.
To fund this functionality, Lido also provides 10% fees on the staking rewards generated. In detail, 4% is allocated to the DAO treasury while the remaining 6% is paid to the CSM.
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As of this writing, there are exactly 1,078,529 validators active on Ethereum. At the same time, ETH is trading at $2,500, up 2.4% in 24 hours. For its part, the LDO of Lido is valued at a price of 1.03 dollars, for a capitalization of 923 million dollars.
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Source: Lido
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Since 2021, I have devoted my free time to seriously educating myself on cryptocurrencies in order to acquire maximum knowledge and credibility. I often have the opportunity to conduct interviews with influential figures in the blockchain industry. I also conduct in-depth analyzes on Web3 themes to offer exclusive content to Cryptoast readers.
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