# Reset conditions for the CSM Node Operators' benefits

This document provides detailed information about possible conditions when benefits (bond curve, etc.) assigned to the CSM Node Operators should be reset back to the default values.

## What are the possible benefits for the CSM Node Operators?
The benefit is an improvement in participation conditions for the Node Operator. For CSM, there are two possible benefits:
- Reduced bond
- Increased staking fee

The current Staking Router architecture does not support variable commission. However, the variable commission can be implemented on a module level by setting `moduleFee` to the maximum possible commission and returning excess rewards to the treasury in the same way described [here](https://hackmd.io/@lido/HJUDqFPsa#Option-A-CSM-Performance-Oracle) for the CSM Referral Program. By default, a minimal fee is set for the node operators. Hence, any fee higher than a minimal fee can be considered a benefit. It is important to note that variable commission has yet to be considered for CSM. This example is primarily theoretical and is provided to make research more general.

Reduced bond, in turn, can only be implemented on the module level. There is already a unique feature called the ["bond curve"](https://hackmd.io/QmMkXEjbR1e8IFgN-6yC_g?view#Bond). Having several curves pre-set for the module allows Node Operators to have different curves. With the assumption that the default curve is the "most expensive" for the Node Operator in terms of bond required per validator, the other curves can be treated as benefits.

Here and after, the term "benefits reset" will stand for setting the default bond curve and fee value (if a variable fee is implemented) for the Node Operator.

## How can Node Operators get benefits?
There are several ways for the Node Operators to get benefits in CSM:
- Get a particular bond curve as an [Early Adopter](https://hackmd.io/pKqiHTYfRzuWDz0l9MTn3A?view#Appendix-1-Incentives-for-the-Early-Adopters);
- Get benefits based on the ad-hoc DAO decision;
- Get benefits as an [LTI program](https://hackmd.io/@lido/Skc9Gufhp) participant (theoretical feature for CSM v2);
One can see that node operators need to meet specific conditions or perform well for an extended period to receive benefits.

## Why can benefits be reset for the Node Operator?
Since benefits are primarily awarded to the well-performers (known solo-stakers, LTI participants, etc.), the reason to reset benefits should be the opposite, namely, inadequate performance or rule violations. However, the Node Operator will get reduced rewards in case of lousy performance. Resetting benefits on top of that might be an overkill.

Let's take another point of view here. Benefits are offered to the node operators to either attract them to join CSM (early adopters' benefits) or make it more appealing for them to operate in CSM for a long time (LTI). Resetting benefits will mean that these Node Operators no longer meet the conditions for the "good" Node Operator, and CSM (or Lido) is no longer interested in incentivizing their participation.

## Benefits reset "watermark"
Let's come up with the list of "bad" things Node Operator can do:
- Violate rules;
- Maintain insufficient bond;


As depicted below, the absolute majority of the bond shortage cases (penalties) are the reason for a rule violation. Hence, It is sufficient to reset benefits upon rule violation detection (or confirmation for delayed penalties).


## Final reset conditions
To summarise all above. There are 4 cases when benefits can be reset for the Node Operator in CSM:
- EL rewards stealing is detected and confirmed;
- Slashing is reported for one of the NO's validators;
- One of the NO's validators is ejected due to insufficient CL balance;
- Based on the DAO decision;

## Appendix 1. Related documents
- [CSM LTI considerations v2](https://hackmd.io/@lido/Skc9Gufhp)