Lido launches the largest upgrade, integrating over 8 million ETH staked, with the number of validators expected to decrease by one third

Ethereum's largest liquid staking protocol Lido announced the launch of the largest protocol upgrade since the V2 upgrade in 2023, which will integrate over 8 million staked ETH (approximately $16.5 billion) and migrate to the new validator architecture following the Ethereum Pectra upgrade. This migration is expected to reduce the number of Ethereum network validators by about one-third, lowering the load on the consensus layer.

Lido stated that after the upgrade is completed, the number of attestation messages per epoch across the entire Ethereum network is expected to decrease by about 29%, thereby improving network operational efficiency. This upgrade will migrate professional node operators to the Curated Module v2 (CMv2) architecture. Unlike before, which mainly relied on operator reputation and historical performance, CMv2 requires Lido-selected node operators to lock ETH as collateral for the first time, providing economic guarantees for node operational performance.

Lido indicated that all 34 selected node operators are expected to complete the migration, and no operators have exited due to the new collateral requirements. Lido's staking lead Isidoros Passadis stated that this upgrade will streamline the validator set supporting Lido's core staking business while enhancing security through capital constraints. Lido expects that this migration will result in a decrease of approximately 0.28% in annual staking yields for the protocol. Validators will continue to earn rewards before exiting the migration, with any yield loss likely occurring only during the brief period before balances are transferred to the new validators.