Summary

This proposal seeks approval from Lido DAO members to upgrade the smart contract to v2 in order to ensure a healthy validator economy and create a sustainable, high-performance validator set for Solana.

If this snapshot vote passes, the proposed smart-contract changes will be deployed to the mainnet.

Suggested changes in smart-contract

While the ideas that lie behind these changes were well described in research forum proposal, we want to list again the key changes:

• The transition from fully dedicated nodes with 100% fee to public ones with a variable fee;
• Increase the maximum number of validators to 6,700;

We also would like to set the variable fee for the validators in the set. Ideas behind that are described on the research forum.

• Set the maximum commission for the validator to 5% to be eligible to receive a delegation from Lido on Solana.

Changes in the rewards distribution model

As an expected result of the changes above, the staking rewards distribution model will slightly change.

• In the current version of the smart contract, all the rewards are distributed simultaneously and precisely between node operators (5%), the DAO treasury (4%), the developer (1%), and the stakers (90%).
• After the suggested changes are made, the 5% (max, could be less than that) goes to the node operator, then from the remaining part subtracts the DAO treasury (4%) and the developer (1%) fees. And then, the remaining part goes to stakers.

As a result, the part of the treasury and the developer slightly decreased, the validator’s part remains the same as before, and the “staker’s” part slightly increased.

Security audit

We conducted an external security audit of the new version of the smart contract. It was made by Neodyme, a well-known industry security researcher. Here you can find the resulting report for this audit.

There were a few findings that have already been resolved on our side.