Lido Proposes Ethereum (ETH) ePBS MEV Policy With 1 ETH Builder Deposit

A Two-Tier Bid Market

Lido has proposed a rebuild of its maximum extractable value (MEV) policy, the surplus captured by deciding which transactions enter a block and in what order, for its staking operations on staking infrastructure it runs across Ethereum (ETH). The rebuild is timed to proposer-builder separation (ePBS), a design planned for Ethereum's proof of stake protocol that creates distinct roles for the validator proposing a block and the builder assembling its contents. The draft, posted on Lido's governance forum by a contributor to the Node Operator Mechanism (NOM) working group, sets up two bid paths. Bids whose payments the Ethereum protocol guarantees would stay open to any qualified builder without separate Lido approval. Bids carrying additional payments promised outside the protocol would be restricted to builders and intermediaries on a Lido allowlist. Nothing has been adopted yet, and the policy would bind every Lido node operator equally.

Under the open path, a builder registers a public key and posts a deposit of at least 1 ETH, and the epoch containing that deposit must be finalized before participation. Registered builders sign bids with the registered key, hold a balance able to cover the promised payment, and meet protocol conditions covering the slot, the parent block and the gas limit. Every Lido validator must keep peer-to-peer bid reception running so all validators reach the open market; bids arriving over P2P can carry only protocol-guaranteed payments, while direct builder API connections or compatible middleware offer a second route in. Bids that include out-of-protocol extra payments enter a separate review track, and a winning extra-payment bid from a builder outside the allowlist is marked as a possible policy breach. The proposal landed as the Ethereum price gained 5.6% over the past 24 hours.

Entries on the current relay allowlist keep their eligibility after the ePBS transition only under standing conditions: operating as a protocol-registered builder or relaying bids exclusively from registered builders, publishing and updating the builder public keys and indexes used in bids, running an ePBS-compatible builder API on the Hoodi testnet, and keeping public bids plus delivered payload data available to Lido's monitoring system. New applicants, individual builders included, pass through standard registration and review by the Curated Module Committee (CMC). The existing allowlist layout carries over, with node operators setting at least one “must use some” entry and selecting further entries from the general list as needed.

Rewards from Lido block proposals, covering both the protocol-guaranteed payment and any extra payment, must be routed to a designated EL Rewards Vault. A validator sends signed preference data naming that vault ahead of each proposal slot and writes the same address into every accepted bid. The rules reach all nodes able to propose Lido blocks, backup and replacement nodes included, while distributed validator technology (DVT) clusters apply one shared configuration to all members within their middleware's ePBS support. Direct block building stays permitted, but an operator is flagged for review if the monitoring system observed a qualified external bid above the operator's own minimum while a direct block was produced. The system also compares the selected bid against the highest qualified bid observed and flags results below a set ratio, proposed initially at 90-95%; a wrong reward address, or an extra payment that fails to reach the vault in full, lands on the same list. Earlier forum discussion weighed the trade-off underneath the design: protocol-level deposits make promised payments harder to renege on, but they raise the capital burden on builders, and no measured premium was put forward showing that trust-based payments actually lift validator rewards. Lido intends to put the proposal, alongside the transition of the existing allowlist, to a vote in November. Even with approval, the policy would switch on only after the Glamsterdam upgrade is completed on the Ethereum mainnet.

The Premium Nobody Has Measured

The mechanical half of the draft reads as settled: the two-tier split, the 1 Ethereum (ETH) entry deposit and the 90-95% monitoring ratio are all written down. The economic half is not. Whether protocol-guaranteed payments produce a measurable reward premium for Lido's stakers, or simply move capital costs onto builders who may recover them through lower bids, was never demonstrated with data in the forum thread. That question is what the November vote effectively tests, and even a yes leaves activation waiting on Glamsterdam, keeping any change to live block production at least one upgrade away.