- Lido proposed a two-track system for handling maximal extractable value once Ethereum’s enshrined Proposer-Builder Separation upgrade takes effect
- A “trustless” track offers protocol-guaranteed payment and is open to any registered builder, while a “trusted” track is limited to builders and relays vetted by Lido’s Curated Module Committee
- All MEV rewards under both tracks route to the Lido Execution Layer Rewards Vault, with monitoring in place to flag bids falling below 90% to 95% of the best observed bid
Lido, the largest liquid-staking protocol by total value, posted a governance proposal to its research forum on November 4, 2026 outlining how it plans to handle maximal extractable value, commonly known as MEV, once Ethereum’s upcoming enshrined Proposer-Builder Separation upgrade, referred to as ePBS, takes effect. MEV refers to the additional value that block producers can extract by strategically ordering, including, or excluding transactions within a block, and how that value gets captured and distributed is a central economic question for any large staking protocol.
The proposal introduces a two-track structure for MEV payments. The first, called the “trustless” track, guarantees payment at the protocol level and is open to any builder that registers to participate, requiring no prior vetting or approval. The second, called the “trusted” track, handles payments that fall outside the protocol’s built-in guarantees and is restricted to builders and relays that have been vetted and approved by Lido’s Curated Module Committee, a group responsible for overseeing which third parties can participate in more sensitive parts of the protocol’s operations.
Under both tracks, all resulting MEV rewards are directed into the Lido Execution Layer Rewards Vault, consolidating the proceeds into a single pool rather than letting them accrue separately depending on which track generated them. The proposal also describes a bid-value deviation monitoring system, designed to flag any bid that comes in below 90% to 95% of the best bid observed for a given block, a safeguard intended to catch builders who might otherwise submit artificially low bids.
Lido plans to hold a formal vote on the proposal sometime in November 2026, with the new MEV policy taking effect only after Ethereum’s Glamsterdam upgrade, which is expected to carry the ePBS changes, is actually live on the network. The phased rollout reflects how closely liquid-staking protocols need to coordinate their own internal policies with upstream changes to Ethereum’s core protocol.
The proposal represents one of the more detailed public blueprints yet for how a major staking protocol intends to adapt its reward distribution once enshrined proposer-builder separation becomes part of Ethereum’s base layer. The full proposal is posted on Lido’s own research forum.
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