Lido v3 primer
What Lido v3 introduces
Lido v3 introduces stVaults - staking vaults enabling users to leverage isolated staking positions to mint stETH. stVaults have 4 properties:
- Permissionless to create: anyone can deploy one through Lido's vault factory.
- Operator of your choice: the vault is run by a node operator you select, not one assigned by Lido governance.
- Isolated risk: each vault has its own ETH, its own validators, and its own accounting; trouble in one vault doesn't reach another or the main Lido pool.
- Optionally liquid: a vault can mint stETH against its own staked ETH, turning locked stake into a liquid, composable token without unstaking.
Note: The shared Lido pool and stETH still exist. Lido V3 connects vaults to the rest of the ecosystem. The stETH minted by a vault is the same stETH used everywhere else in the protocol.
For Lido's own walkthrough of the model, see Basic stVault.
What a staking vault is
A stVault is a modular and composable smart contract used to stake ETH and mint stETH. It is the single object everything else in Lido v3 is organised around.
The Lido v3 protocol contracts
stVaults are operated with other contracts which together make Lido V3. Some are deployed once per vault; others are protocol-wide singletons shared by every vault on the network.
| Contract | Scope | What it does |
|---|---|---|
| Staking Vault | Per vault | Holds the vault's ETH and validator keys; the withdrawal-credentials target for its validators. |
| Dashboard | Per vault | The owner's control surface: role-based access to fund, withdraw, mint, burn, rebalance, and manage fees. |
| VaultHub | Protocol-wide | The registry every vault connects to; tracks connections and liability, applies oracle reports, and mints/burns stETH at the protocol level. |
| VaultFactory | Protocol-wide | Permissionlessly deploys a Staking Vault + Dashboard pair in a single transaction. |
| LazyOracle | Protocol-wide | Applies each vault's oracle report (value, rewards, fees, liability) and timelocks suspicious value jumps. |
| OperatorGrid | Protocol-wide | Holds the node-operator tier grid: reserve ratios, share limits, and fee parameters per tier. |
| Predeposit Guarantee | Protocol-wide | Secures validator deposits so a vault's stake can't be diverted by a malicious operator. |
Lido publishes the deployed addresses of all protocol contracts per network in Lido's deployed contracts. Northstake surfaces the per-vault addresses on each vault's Addresses tab.
Minting stETH and the reserve ratio
The "liquid" side of a staking vault is its ability to mint stETH against its own staked ETH. A vault that does this takes on a liability (the stETH it owes back to the protocol) and must keep more ETH locked as collateral than the value of that liability. The size of that extra buffer is set by the vault's reserve ratio.
The reserve ratio is what keeps a vault solvent. If a vault's collateral falls too close to its liability (past its forced-rebalance threshold) the vault is considered unhealthy, and the protocol allows it to be rebalanced (some stETH burned against vault ETH) to restore the buffer. A healthy vault keeps its collateral comfortably above its liability.
Lido's operational guides cover this in depth: Health monitoring explains the metrics to watch, and Health emergency covers restoring an unhealthy vault. For how Northstake handles fees on a vault's stake and minted stETH, see Fees.
Validator deposits and the Predeposit Guarantee
A vault's validators can be funded directly from the stVault or through the Predeposit Guarantee (PDG). Via the PDG, rather than committing a full 32 ETH at once, the node operator first makes a small predeposit that reserves the validator and proves on-chain that the vault controls its withdrawal credentials; only then is the rest of the stake committed to activate it. This stops an operator from diverting a validator's withdrawal credentials away from the vault and hence prevents a malicious node operator from stealing funds from stakers.
For more on the validators lifecycle and the PDG contract and flow, see Validator lifecycle and PDG flow.
Oracle reports and freshness
Lido v3 does not track a vault's value, rewards, fees, and liability continuously on-chain. Instead, an oracle periodically publishes that data, and each vault's report must be applied to the vault: a permissionless step anyone can perform.
Sensitive operations (minting stETH, withdrawing ETH, rebalancing) require a fresh, up-to-date report. An operation attempted against a stale report might revert until a current report is applied. Lido's Applying the oracle report guide walks through the mechanism.
Node operator tiers
A vault's economics are not fixed by the protocol: they depend on the vault tier, which in turn depends on the verification of the node operator. There are several levels and these are enforced on-chain via the Operator Grid. A tier sets the vault's reserve ratio and how much stETH it may mint (its share limit).
Operators that complete Lido's identification process are assessed and placed into tiers with better terms than permissionless stVaults. See Lido's Identified node operators guide, and Supported staking providers for the Northstake roster.
How Northstake builds on Lido v3
Northstake's Staking Vault Manager (SVM) is a unified interface to create and manage stVaults at scale and with ease. The standard SVM caters to stakers while the SVM Pro is best suited for service providers and enterprise users such as node operators, custodians, and exchanges.
From here:
- The Staking Vault Manager: what SVM is and does
- SVM vs SVM Pro: which product fits your use case
Related
- Staking vaults: dedicated vs. pool vaults, Northstake view
- Validator lifecycle and PDG flow: validators from deposit to withdrawal
- Roles and permissions: the two-party vault owner / node operator model
- Lido's materials: index of the official Lido documentation relevant to SVM
- Lido stVaults documentation: Lido's own documentation hub
Updated about 6 hours ago