Lido has launched Curated Module v2, an upgrade to its Ethereum staking infrastructure, allowing validators to increase their effective balance from 32 ETH to a maximum of 2,048 ETH. The protocol anticipates that, if the migration is complete, this adjustment could reduce the number of Ethereum validators from approximately 880,000 to approximately 628,000, thereby alleviating processing pressure on the consensus layer.
The number of validators is expected to decrease.
Lido stated that the migration has not yet started, and the above data is still a prediction based on existing models, not a real-time on-chain result. The protocol believes that after the number of validators decreases, the Ethereum consensus layer will need to process fewer validator messages, and validator management efficiency will improve.
Lido also emphasized that this upgrade will not change how the Ethereum execution layer operates; therefore, transaction processing, gas fees, and user-side network costs are not expected to change. For stETH holders, no additional action is required; the migration will be completed at the protocol layer.
New constraints for node operators
In addition to the validator structure adjustments, Curated Module v2 also introduced new constraint mechanisms for node operators. Lido stated that the new version introduces deposit requirements and a penalty mechanism to increase the accountability of node operators.
Future staking allocation may no longer rely solely on existing methods, but will incorporate more metrics, including node performance, fee structure, and contributions to the Ethereum ecosystem. Lido views this update as part of the next phase of protocol development, aiming to gradually optimize the operational quality of the validator set.
Institutional pledging strategies continue to advance.
The agreement also states that although the updated withdrawal vouchers support a significantly higher validator balance than the original cap of 32 ETH, this does not change the underlying Ethereum staking rules, and the focus of the adjustment remains on validator management.
Prior to this upgrade, Lido had been steadily advancing its institutional staking business throughout the year. Earlier this month, Anchorage Digital integrated Lido into its institutional platform, enabling clients to mint and redeem wstETH within a regulated custody environment without transferring assets off the platform.
Anchorage Digital stated at the time that this access allowed institutions to gain Ethereum staking exposure while continuing to use the platform's existing custody, reporting, governance, and settlement systems. Kean Gilbert, Head of Institutional Relations at the Lido Ecosystem Foundation, also noted that demand for custody-based institutional staking is rising as staking infrastructure and the regulatory environment mature.
Additional information:Gilbert previously stated that Lido has not experienced any smart contract exploitation incidents since its launch in 2020, and has invested over $4 million in audits; currently, the protocol distributes staked ETH to more than 900 node operators, with no single operator responsible for more than 1% of the network share.
