[DIP-22]: Incentivized Mainnet Exception for Lido SimpleDVT Participants

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Important Notice: This exception applies to known Lido SimpleDVT participants identified by cluster owner addresses and will not alter any other parts of the Incentivized Mainnet program. For all other participants, nothing changes, and their rewards are not affected in any way by this exception.

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Introduction

To facilitate the integration of Lido's Decentralized Validator Vault (Vault) with the SSV Incentivized Mainnet (IM) program (IMP), we propose a special exception for Lido SimpleDVT participants.

This will involve deploying a dedicated Merkle distribution contract for the ssv.network DAO, configuring the IM calculation script to reallocate the rewards of SimpleDVT clusters, redirecting them to the distribution contract, and making the rewards claimable by SimpleDVT participants at the end of the program and according to the rules set out in this proposal.

Motivation

Recently, the Lido DAO passed two significant votes pertaining to:

1. Increased Capacity: Increase the capacity of the Simple DVT module to a 4% share limit, with 2% allocated to validators utilizing SSV’s DVT implementation.
2. Vault Implementation: Implement a vault solution via the Mellow protocol to serve as a focal point for user staking and DVT incentives, accelerating the addition of new validators to the Simple DVT Module. This vault is known as the Decentralized Validator Vault.

Abstract: Integration of Lido SimpleDVT with the IM program

The Vault aggregates deposits over time, assigning points based on the amount of ETH and the duration of deposits. At the end of the SimpleDVT campaign, the total points will determine each depositor’s share of IM $SSV rewards. This system ensures a fair and proportional distribution based on user participation.

Contributors will present the SSV DAO or the IM administrator with the total and relative number of points obtained based on the amount of ETH and the duration of deposits in the Lido protocol at the end of the Vault program. Once the contributors present the SSV DAO with the relevant point system, the SSV DAO can calculate a "points to $SSV" rate based on the accrued IM rewards and proportional to incentives of other providers.

At the end of the Vault program, the contributors will provide the IMP administrator with a list of recipients' addresses and rewards/points in a way defined by the Lido DAO vote and agreed upon by the IMP administrator. Based on this and the reward distribution logic outlined in this proposal, the IMP administrator will calculate a matching merkle tree. Once the merkle root is updated at the end of the Vault program, participants can claim their rewards through a dedicated self-claim page or direct interaction with the distribution contract.

Administration

The proposal suggests delegating the continuous operation of the IMP and this exception to @EridianAlpha (discord: eridianalpha) (hereinafter: “Administrator”), in accordance with and under the terms and conditions defined in Incentivized Mainnet Program Proposal and its extension in [DIP-18].

Mechanics

Based on the motivation and abstract above, this is a request for the SSV DAO to approve the following exception, modified mechanics, and implementations to integrate SimpleDVT with the IMP:

1. Distribution Contract: A distribution contract will be deployed by SSV Labs to the Ethereum mainnet. This distribution contract has to be functionally identical to the existing IM contract at address 0xe16d6138B1D2aD4fD6603ACdb329ad1A6cD26D9f. As soon as the distribution contract is deployed, its ownership will be transferred to the ssv.network DAO.
2. Adjusted Calculation: When the contributors provide the relevant Vault and SimpleDVT addresses to the IMP administrator, the IMP administrator will configure the regular IM calculation script to map the accrued rewards by SimpleDVT clusters (identified by cluster owner addresses) and Vault participants and redirect those rewards to the distribution contract. The configuration and adjustments to the scripts and calculations shall be made public and reported together with the regular IM reporting by the IMP administrator.
3. Points Calculation: Lido Contributors will communicate the total points issued to the IMP administrator, along with a machine-readable list of point rewards mapped to recipient addresses.
4. Distribution: Based on total points, the IMP administrator will calculate the "points to $SSV" rate, compute a corresponding merkle tree, and set the merkle root for the distribution contract accordingly.
5. Claim Page: Following the experience ssv.network DAO users have had with the existing IMP, the ssv.network DAO will create a dedicated claim page for the claiming of the program’s rewards. To this end, the ssv.network Grants Committee will find a suitable provider to implement a claim page identical in functionality and scope to the existing IMP. If an identical page would not completely serve the purpose of this proposal, the Grants Committee is free to request a chosen service provider to add the necessary functionality so that the claim page is operable. Claiming through direct interaction with the distribution contract is possible beyond the lifecycle of the claim page.

Effectiveness

SimpleDVT program participants will start accruing IMP rewards from August 1st, 2024. SimpleDVT program participants will stop accruing IMP rewards at the end of the IMP or the Lido SimpleDVT program, whatever comes first. If the IMP is still in effect after the Lido SimpleDVT program ended, the affected clusters will revert to being an ordinary participant under the regular IMP rules and continue to accrue regular IM rewards. Unclaimed rewards will be returned to the DAO Treasury one year after the end of the SimpleDVT program.

Reward Distribution

If the accrued rewards in the distribution contract are insufficient to match the $ per point value of the other providers, the DAO will only distribute what’s in the distribution contract, following a 90/10% allocation as proposed by Lido. The SSV DAO is free to top up the difference voluntarily but requires a full DAO resolution.

If the accrued rewards exceed the total $ value of the other providers (baseline), 90% of that baseline will be distributed to SimpleDVT vault participants. The remaining rewards in the distribution contract will be distributed to the Node Operators in their corresponding SSV Simple DVT clusters, potentially exceeding Lido’s proposed target allocation of 10% for Node Operators.

Additional Information

• Lido Integration Request: SSV x Lido Simple DVT Expansion
• Incentivized Mainnet Proposal: Snapshot Proposal
• Decentralized Validator Vault Proposal: Lido Proposal