Lido is consolidating more than 8 million ETH, worth about $16 billion, onto Ethereum's larger post-Pectra 0x02 validators as part of a major protocol upgrade on Monday. The upgrade rolls out Curated Module v2, which requires professional node operators to post ETH collateral that can be seized to cover slashing losses and operational failures. The consolidation will boost staked ETH on 0x02 validators to roughly 52% from about 32% and reduce Ethereum's total validator count by roughly one third, easing network load. The Pectra hardfork activated in May 2025 raised the maximum effective balance per validator to 2,048 ETH from the previous 32 ETH maximum.
Lido Deploys Curated Module v2 with Bonding Requirements
Lido's upgrade rolls out a second version of its Curated Module offering, the permissioned node-operator layer of the Lido Protocol that handles well over 90% of Lido's staked ETH. CMv2 requires curated professional operators to post their own ETH as collateral, which can be seized to cover losses from slashing, improper execution-layer rewards, and other operational failures. Lido notes this bond is smaller than would be required for fully permissionless modules, but designed to put operator capital directly behind performance, aligning operators with stakers and adding a measurable layer of protection for stakers utilizing the Lido protocol. Chief of Staking at Lido Labs Foundation Isidoros Passadis said this is the biggest change to how Lido Core staking works since Lido V2. When it debuted in January, Lido devs noted the migration could take up to six months to complete, during which Lido would miss about 738.5 ETH in protocol rewards as its staked ETH is unstaked and reallocated.
Ethereum Validator Consolidation Reduces Network Load
The larger validators can hold up to 2,048 ETH instead of the previous 32 ETH maximum, enabling Lido's professional node operators to secure more stake with fewer individual validators. The move will significantly reduce Ethereum's total validator count by roughly one third, easing load on the network, Lido said. While disconnected from R&D efforts at the Ethereum Foundation and recently launched ETH Labs unit, Lido noted the upgrade comes as Ethereum developers continue to research and activate ways to make the base layer leaner and faster, an effort broadly known as Lean Ethereum. Pectra was a major Ethereum hardfork activated in May 2025, which in addition to introducing smart contract improvements also raised the maximum effective balance per validator to 2,048 ETH via 0x02 validators.
Community Staking Module v3 Introduces DVT Support
Monday's upgrade is rolling out alongside Community Staking Module v3, the latest version of Lido's permissionless staking module that is designed primarily for community and solo stakers. CSM v3 introduces a new route for Distributed Validator Technology (DVT) that splits validator responsibilities and keys across the four independent operators, lowering the risk of slashing and downtime. Community Staking Module participants already were required to post an ETH bond. Lido noted the upgrade means the same amount of bonded capital can now support more staked ETH, making the CSM more capital-efficient and accessible for smaller community stakers.
Lido Revenue Declined 23% in 2025 Amid Staking Yield Compression
According to Lido's latest annual report, the protocol's total revenue fell by 23% to $40.5 million in 2025 amid shifts to Ethereum's staking ecosystem, including lower staking yields from network-wide APR compression. Last summer, the Ethereum validator exit queue swelled to an all-time high as record numbers were unstaking their ETH. This trend has now reversed, with Ethereum's validator entry queue spiking, and the percentage of ETH staked rising to nearly 35%, according to The Block's data. Notably, Lido has emerged as a popular choice for institutions looking to offer Ethereum staking exposure. WisdomTree launched the first Ethereum-based exchange-traded product (ETP) in Europe that earns staking rewards using Lido, while VanEck has filed for a Lido staked ether ETF. Anchorage is also allowing its custody clients to access Lido staking.
FAQ
What is Lido's Curated Module v2 upgrade?
Lido's Curated Module v2 requires professional node operators to post their own ETH as collateral, which can be seized to cover losses from slashing, improper execution-layer rewards, and other operational failures. The upgrade handles well over 90% of Lido's staked ETH and is the biggest change to how Lido Core staking works since Lido V2.
How much ETH is Lido consolidating onto 0x02 validators?
Lido is consolidating more than 8 million ETH, worth about $16 billion, onto Ethereum's larger post-Pectra 0x02 validators. This will boost staked ETH on 0x02 validators to roughly 52% from about 32% and reduce Ethereum's total validator count by roughly one third.
What is the difference between 0x02 validators and previous validators?
The larger 0x02 validators can hold up to 2,048 ETH instead of the previous 32 ETH maximum. This was enabled by the Pectra hardfork activated in May 2025, which raised the maximum effective balance per validator to 2,048 ETH.
