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Staking via Lido V3

Below is the core lifecycle of how a user interacts with Lido V3 through a stVault. You can find more information about the following flows in the official Lido V3 documentation.

→ Official docs: Validator Lifecycle
https://hackmd.io/@lido/stVaults-design#4-Flows

1) Deploy a stVault

To start using Lido V3, users create a stVault via vaultFactory. The stVault must be configured by:

  • setting the Admin of the stVault by assigning the DEFAULT_ADMIN_ROLE to an Ethereum wallet or smart contract.

  • setting the Node Operator of the stVault by assigning the NODE_OPERATOR_ROLE to an Ethereum wallet or smart contract.

  • setting the Node Operator Manager of the stVault by assigning the NODE_OPERATOR_MANAGER_ROLE to an Ethereum wallet or smart contract.

  • setting the Node Operator Fee.

2) Deposit and Stake ETH via the Vault

After deployment, a user can deposit ETH into the stVault to create new validators. Note that validator top-ups cannot be made from the stVault and need to be made from a wallet or other sources.

The staking flow is heavily affected by the PreDeposit Guarantee (PDG) Policy:

3) Validators and Withdrawals

Lido V3 is compatible with EIP-7002, and validators created via stVaults are of the 0x02 type.

This means that:

  • consensus rewards compound on validators
  • vault owners can trigger partial and full withdrawals with a smart contract call to their vault without relying on the node operator.

4) Mint stETH Against the Vault’s Stake (Liability Shares)

Users can optionally mint Lido shares, and therefore stETH, using the vault's total value to back the minted shares. The maximum number of shares a vault can mint is defined as the vault "minting capacity". Minting stETH creates a liability on the vault - "liability shares" - which can be repaid by burning stETH or rebalancing the vault. The latter involves the transfer of ETH from the vault to Lido Core.

In practice:

  • Deposits and staking rewards → increases minting capacity.
  • Withdrawals -> decrease iminting capacity
  • Minting stETH → increases liability shares
  • Burning stETH -> decrease liability shares
  • Rebalancing ETH or shares from the vault to Lido Core -> decrease liability shares.

Vault owners can also decide to mint Wrapped stETH (wstETH) directly from the vault.

Useful Links

Updated about 18 hours ago

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