Nominators secure the relay chain by selecting good validators and staking DOT.
You may have an account with a certain amount of DOT and want to earn fresh DOT. You can do so as a validator, which requires a node running 24/7. If you do not have such a node or do not want to bother, you can still earn DOT by nominating one or more validators.
By doing so, you become a nominator for the validator(s) of your choice. Pick your validators carefully. If they do not behave properly, they will get slashed – and you will lose DOT as well. However, if they do follow the rules of the network, you can receive a share of the staking rewards that they generate.
While your DOT tokens are staked by nominating a validator, they are 'locked' (bonded). You can receive new DOT tokens in your account, but you cannot stake as a validator or transfer DOT away from your account. You can un-nominate validator at any time to stop staking your funds. Keep in mind that the un-nomination is effective in the next era and that it does not automatically unbond your funds.
There is an unbonding period of 7 days on Kusama and 28 days on Polkadot before bonded funds can be transferred after issuing an unbond transaction.
The Lido protocol creates and maintains its own nominators on the relay chain in a trustless way using the XCM protocol. That means that nominators are controlled only by the Lido Smart Contracts on the Moonbeam parachain, and there are no private keys of nominators that can be used by third parties.
Nominators are controlled only by the Lido Smart Contracts on the Moonbeam parachain
Lido can host several nominators at the same time, with each nominator being able to nominate for up to 16 validators. Users’ stakes are equally distributed across nominators.