Lido launches its largest upgrade to date, set to consolidate over 8 million staked ETH and reduce the number of validators by an estimated one-third.

Ethereum’s largest liquid staking protocol Lido has announced its biggest protocol upgrade since the 2023 V2 update, integrating over 8 million staked ETH (valued at roughly $165 billion) and migrating to the new validator architecture following Ethereum’s Pectra upgrade. The migration is expected to cut Ethereum network validators by around one-third, reducing consensus layer load. Lido said that post-upgrade, the number of attestation messages per epoch across the entire Ethereum network is projected to drop by approximately 29%, boosting network operational efficiency. The upgrade shifts professional node operators to the Curated Module v2 (CMv2) architecture. Unlike the previous model that relied primarily on operators’ reputation and historical performance, CMv2 for the first time mandates Lido’s curated node operators to lock ETH as collateral to provide economic guarantees for node operation performance. Lido added that all 34 curated node operators currently plan to complete the migration, with no operators exiting over the new collateral requirement. Isidoros Passadis, head of Lido Staking, noted the upgrade will streamline the validator set supporting Lido’s core staking business while enhancing security via capital constraints. Lido projects the migration will lower the protocol’s annual staking yield by roughly 0.28%. Validators will continue earning rewards until completing migration exit, with yield losses only possible during the short window before their balances are transferred to new validators.