Complete guide to Lido's Community Staking Module (CSM): Discover how it works and its advantages

Staking on Ethereum has taken a significant leap forward with Lido's Community Staking Module (CSM), designed to enable community stakers to participate in network validation in a permissionless way. This initiative aims to democratize staking, making it more accessible and strengthening Ethereum’s decentralization.

Whether you’re an Ethereum enthusiast or simply someone looking to earn rewards on your ETH, the CSM is worth exploring!

The Community Staking Module (CSM) is a solution developed by Lido DAO that allows individual node operators to run Ethereum validators using a permissionless model.

Traditionally, running a validator on Ethereum requires 32 ETH, which can be a challenging or outright unattainable goal for many. Lido’s Community Staking Module (CSM) simplifies this by allowing node operators to contribute a reduced initial bond of just 2.4 ETH (1.5 ETH for early adopters, and 1.3 ETH after the first validator). The protocol then takes care of providing the remaining balance needed to reach the 32 ETH requirement.

This not only lowers the barrier to entry but also encourages more people to contribute to Ethereum’s security.

Participation modules

The CSM not only makes staking more accessible but also offers several notable benefits:

• Lower entry barrier: With a general bond requirement of just 2.4 ETH, staking is now open to more people who previously couldn't participate.
• Higher rewards: As a CSM operator, you can enjoy additional rewards from Lido’s model. You earn rewards from the validator’s 32 ETH, plus staking rewards generated by your bond in stETH. This can amount to up to 2.3x more compared to traditional solo staking!
• Enhanced decentralization: More operators mean a more secure and resilient Ethereum, reducing the risks of centralization.
• Bond flexibility: You can lock your bond in ETH, stETH, or wstETH, depending on your preference.
• Stable rewards: Lido’s reward smoothing system helps balance payouts, reducing performance disparities across different Lido modules and ensuring a fairer distribution of rewards among operators.

Advantages of Lido's CSM

The CSM is an impressive solution, but operating a node comes with certain responsibilities. Here are some key points to keep in mind:

1. Technical knowledge: Advanced skills in Ethereum, networks, and system administration are essential.
2. Infrastructure: Your hardware must be reliable, as any interruptions (like power or internet outages) can impact your rewards.
3. Maintenance: Even if everything runs smoothly at first, issues can and will arise over time.

While tools like DAppNode can simplify the setup process, running a node remains a technical challenge for those without prior experience. If you’d rather avoid these technical challenges, don’t worry—there’s an option for you…

At Stakely, we’re working to bring you a solution that combines the benefits of the CSM with the simplicity of a managed model.

This service will be available in the coming weeks and will allow you to participate in Ethereum staking without worrying about the technical operation of a node. For just $5 a month, you’ll enjoy:

• Initial setup: Your node ready to go in just minutes.
• Ongoing maintenance: Say goodbye to technical headaches—we’ve got it covered.
• Optimized rewards: Earn a 7% APR thanks to our infrastructure and the advantages of the CSM.
• Bulletproof security: Rest easy knowing your validators are protected by our staking insurance.

Want to be among the first to use this service? Contact us at [email protected] for more information and be among the pioneers taking advantage of everything our product has to offer.

Discover how Stakely can help you earn the rewards you deserve without the technical complications. With Stakely, staking couldn’t be easier!