What Node Operators Do
Node Operators (NOs) are independent entities participating in the Lido protocol. They run the validators that secure Ethereum. They perform all duties required by the network: proposing and attesting to blocks, participating in sync committees, and maintaining validator uptime using ETH deposited through the Lido protocol.
They operate under a non-custodial model, which means they hold validator private keys, allowing them to perform validator duties, but cannot access or move user funds. The withdrawal credentials for every validator point to a protocol-controlled address called the Withdrawal Vault, meaning validator rewards and principal can only return to this address. This mechanism is defined by the Ethereum protocol itself and enforced by the Beacon Chain deposit contract, eliminating the possibility for any operator to redirect or seize assets. Lido protocol’s validator set is intentionally broad, comprising professional operators, community stakers, and distributed validator clusters. Together, they form a decentralized infrastructure layer.
Validator Lifecycle and Key Control
Before any ETH is staked, Node Operators register validator public keys with the Lido protocol. The protocol checks that each key is valid and unique before it can receive deposits.
When the Lido Buffer has enough ETH to form new validators, the protocol deposits it automatically and securely. A built-in safeguard called the Deposit Security Module verifies deposit data and can pause deposits if something looks off. All deposit information is published on-chain for transparency.
Each validator’s withdrawal credentials are fixed to Lido’s Withdrawal Vault, a protocol-controlled address. This means that, no matter what happens on the operator side, validator rewards and principal always flow back to the protocol, never to individual operators.
Once activated, validators perform their duties on the Consensus Layer until they are exited, either by the protocol when withdrawals require it or by the operator under policy limits. In all cases, funds end up back in the Withdrawal Vault.
Modules and Allocation
Validators of the Lido protocol are organized into separate staking modules. Each module runs its own group of Node Operators and follows its own rules for joining, registering validator keys, and earning rewards.
The Staking Router automatically directs new deposits between these modules to keep growth balanced and improve decentralization over time. The router uses a bottom-up approach: it allocates ETH to the module with the least active stake, as long as that module has free capacity and ready validator keys. This keeps stake growth balanced and naturally favors smaller modules, improving decentralization over time.
The sections below outline how each module works:
The default, battle-tested module. It distributes deposits among professional NOs curated by the Lido DAO based on strict reliability and performance criteria. The curated operators registry is reviewed and adjusted via Lido DAO governance to maintain high standards and adapt to network needs. With no share limits, the module can absorb any amount of stake and serves as the fallback module when other, smaller modules are either at full capacity or do not have depositable validators. Node Operators in the Curated Module run validators as they see fit, including using DVT, with guidance from DAO contributors with regard to optimizing the decentralization of the protocol along the axes of geographic, jurisdictional, infrastructural, and software decentralization. Learn more.
The Simple DVT Module allows Node Operators of all types and sizes - from home stakers to professionals - to work in concert in so-called Operator Clusters to run validators together using Distributed Validator Technology (DVT). DVT improves fault tolerance by distributing a validator’s duties across multiple NOs. This approach reduces slashing risks and enhances security. Simple DVT houses clusters using both Obol and SSV DVT technologies. Learn more.
The CSM is the permissionless module of the Lido Core. Although any NO type can use the module, one of the core aims of CSM is to empower community stakers (individuals running validators in a non-professional capacity), thereby increasing the number of NOs using Lido to run validators and increasing the decentralization of the underlying validator set. As the module is permissionless, instead of reputation, CSM requires a stETH bond from operators. It employs automated performance monitoring and advanced mechanisms for validator withdrawal and slashing proofs, enhancing transparency and decentralization. Learn more.