Lido, the largest liquid staking protocol on Ethereum, said on July 27 that it has begun its biggest protocol upgrade since the 2023 V2 release. The migration will move more than 8 million staked ETH, worth about $16.5 billion, into a new validator architecture introduced after Ethereum’s Pectra upgrade. According to Lido, the change is expected to cut the number of Ethereum validators by roughly one-third and reduce consensus-layer load across the network. The protocol also said attestation messages per epoch across Ethereum should fall by about 29% once the process is complete, improving operational efficiency. As part of the upgrade, professional node operators will be moved to the Curated Module v2, or CMv2. Under the new structure, curated operators must lock ETH as collateral to provide economic backing for node performance, replacing a model that relied mainly on reputation and historical track record. Lido said all 34 curated node operators are expected to complete the migration, with none leaving because of the new collateral requirement. The protocol estimates the transition will lower annual staking yield by about 0.28%.
Lido said on July 27 that it has begun its largest protocol upgrade since the 2023 V2 release, migrating more than 8 million staked ETH, or about $16.5 billion, to Ethereum’s new validator architecture following the Pectra upgrade.
The protocol said the migration is expected to reduce the total number of validators on Ethereum by roughly one-third, easing load on the consensus layer. Once completed, the number of attestation messages across the Ethereum network in each epoch is projected to drop by about 29%, which Lido said should improve network efficiency.
Operators move to CMv2
As part of the upgrade, professional node operators will be migrated to the Curated Module v2, or CMv2, architecture. Under the previous setup, operator selection relied mainly on reputation and historical performance. CMv2 introduces a new requirement: Lido’s curated node operators must lock ETH as collateral to provide economic backing for node performance.
Lido said all 34 curated node operators are expected to complete the migration, and none has exited because of the added collateral requirement.
Yield impact during the transition
Isidoros Passadis, Lido’s staking lead, said the upgrade will make the validator set supporting Lido’s core staking business leaner while improving security through capital constraints.
Lido estimates that the migration will reduce the protocol’s annual staking yield by about 0.28%. Validators will continue earning rewards before they exit for migration, and any yield loss is only expected during the brief period before balances are transferred into the new validators.
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