"SSV Proposes Decentralized Staking Module for Lido on Ethereum"

SSV Network has proposed a decentralized staking module for Lido on Ethereum, aiming to enhance the platform's decentralization and staking infrastructure for institutional participants. The proposal, announced on March 4, introduces a permissionless staking module that leverages SSV's Distributed Validator Technology (DVT) to integrate node operators (NOs) into the operator set of Lido on Ethereum.

If approved, the proposal would add the first third-party module for the Lido Staking Router, further decentralizing the set of node operators using Lido. By leveraging SSV Network's DVT, the new staking module aims to enhance staking accessibility and security. Alon Muroch, the founder and CEO of SSV Labs, a core contributor to the SSV Network, stated that the module may further increase Lido's node operator set and improve staking risk mitigation.

The proposal comes at a time when institutional interest in Ethereum staking is growing. Since the 2024 US presidential election, there has been an increase in appetite for Ether staking products, partly due to expectations of a more crypto-friendly regime in the country. The proposal follows the debut of Lido v3, an upgrade designed to offer greater flexibility and composability for institutional Ether (ETH) staking participants. However, staking infrastructure still needs significant improvement to attract more participation from large financial institutions.

Muroch noted that current infrastructure still has risks like single-points of failure and coordination issues. By using SSV, coordination is programmatically taken care of, which reduces human error. Additionally, utilizing DVT allows institutions to increase performance and reduce the risk of downtime by distributing node operations between multiple nodes instead of relying on just one node. DVT helps de-risk the staking process and provides an Eth-aligned option for players that are extra risk-conscious.

SSV Network currently secures over 2 million in staked Ether, worth over $4.7 billion, through over 1,400 globally distributed node operators. The SSV Network's proposal aims to benefit the Ethereum mainnet's decentralization. Elad Gafini, operations manager at SSV Foundation, stated that the proposed module marks a critical step toward secure, trustless participation for all in the staking ecosystem.