Lido DAO Accelerates Decentralization

VaNOM Q3 Report Reveals Impactful Changes: More Operators and Client Diversity Transform Lido Ecosystem

The latest Lido Oracle Network Monitoring (VaNOM) quarterly report for Q3 2024 shows significant progress in the decentralization of Lido DAO, a key player in Ethereum staking. With a notable increase in the operator base and a growing diversity of execution clients, the protocol is positioned for a more robust and resilient future.

Since the start of the recent Bitcoin bull run, LDO experiences an increase in trading volume, supporting its price rally / TradingView

Expanding the Operator Base with SimpleDVT

During Q3 2024, the number of active node operators on Lido DAO skyrocketed from 35 to over 236 thanks to the launch of the SimpleDVT module. This increase reflects an effort to include smaller operators, which has led to an increase in the Gini coefficient, which now stands at 0.8452. This shift signals the early stages of a broader decentralization effort by the Lido DAO, with increasing participation of operators on the network.

Client diversity and infrastructure evolution

The report also highlights a clear trend towards diversification of execution clients. Geth usage, which previously exceeded 90%, decreased to 35.6%, while alternative clients such as Nethermind and Besu gained ground, reaching 38.9% and 20.3%, respectively. This diversification not only strengthens the resilience of the network, but also supports decentralization goals.

Prominent operators such as Galaxy Digital, which manages 8,460 validators in a hybrid setup, and Chorus One, which incorporated Reth as a backup option, show a growing interest in client diversity. Although Reth adoption numbers are still modest, its implementation by large operators indicates a move towards greater diversity in the future.

Metrics for staking distribution

The Curated Module, which manages 99.5% of the stake at the end of Q3, features a well-distributed set of validators, with an average of 8,459 keys per operator. On the other hand, the SimpleDVT module, designed to support smaller operators, has a staking cap of 4%, although only 0.45% of the total stake is currently used, spread across 222 smaller operators.

This contrast in stake distribution between modules highlights the structural differences between established operators and new entrants, providing essential context for interpreting progress in decentralization.

Attestation Inventory and the Censorship Resistance Index

Since Q2 2024, the VaNOM report added an Attestation Inventory detailing operators’ commitment to security and compliance. Certifications such as ISO 27001 and SOC 2 allow users to have a clear view of each operator’s operational standards.

Additionally, the new Censorship Resistance Index (CRI) offers a key metric to assess operators’ alignment with network neutrality principles. A low CRI could indicate that an operator is more likely to propose blocks that include filterable transactions, potentially limiting the inclusivity of the network.

LDO Soars in Bull Market

Amid a strong rally in the cryptocurrency market, Lido DAO’s native token, LDO, is seeing a significant surge, trading at $1.70 with a 16.60% increase on the day. Since the start of the recent Bitcoin bull run, LDO is seeing a surge in trading volume, supporting its price rally. Even though LDO has been in a downtrend since March, it is currently breaking above the 25-day, 50-day, and 200-day moving averages, suggesting a potential medium- to long-term bull market. Over the past three months, LDO offered gains of 44.91%, although it still shows a loss of 31.36% over the past 12 months.

Disclaimer: This news is written for informational purposes and does not constitute investment advice. Please conduct your own research before making financial decisions.