Lido launched Curated Module v2 on Monday to improve validator efficiency and decentralization on its staking infrastructure. The liquid staking protocol, which lets users earn Ethereum staking rewards through its stETH token, added support for Ethereum's 0x02 withdrawal credentials. The upgrade aims to reduce Ethereum's validator count from about 880,000 to roughly 628,000, a decrease of about one-third, according to a Lido update. Lido stated the change is designed to affect Ethereum's consensus layer by reducing the number of validators and validator messages required to maintain the network, while not changing execution-layer activity that determines transaction fees and gas costs. The protocol operates within Ethereum's liquid staking ecosystem, where validators can now increase their effective balance from 32 ETH to up to 2,048 ETH under the new system.
Lido Adds Support for Ethereum 0x02 Withdrawal Credentials
The Curated Module v2 upgrade introduces support for Ethereum's 0x02 withdrawal credentials, according to a Lido blog post. The change allows validators to increase their effective balance from 32 ETH to up to 2,048 ETH. Lido stated this technical modification enables validators to consolidate their staking positions while maintaining network participation.
Upgrade Projects One-Third Reduction in Ethereum Validator Count
Lido said the migration could reduce Ethereum's validator count from about 880,000 to roughly 628,000. The migration has not started yet, and the figures are based on Lido's projections. The protocol stated the reduction in validator count would decrease the number of validator messages required to maintain the network. Lido specified the change is expected to affect Ethereum's consensus layer and is not designed to change execution-layer activity, which determines transaction fees and gas costs.
Lido Introduces Bonding and Penalty Mechanisms for Node Operators
The update introduces new accountability measures for Lido's node operators, including bonding and penalty mechanisms. Lido said future stake distribution could place more weight on factors such as operator performance, fees and contributions to Ethereum's ecosystem. The protocol described Curated Module v2 as introducing new operator incentives, bond-based security mechanisms and governance improvements.
Protocol-Level Implementation Requires No Staker Action
Lido stated no action is required from stakers because the upgrade will be handled at the protocol level. The implementation applies to the protocol's infrastructure layer, allowing existing stakers to continue earning rewards through stETH tokens without manual intervention.
FAQ
What did Lido launch on Monday?
Lido launched Curated Module v2, an upgrade to its staking infrastructure that adds support for Ethereum's 0x02 withdrawal credentials and allows validators to increase their effective balance from 32 ETH to up to 2,048 ETH.
How will Lido's upgrade affect Ethereum's validator count?
Lido said the migration could reduce Ethereum's validator count from about 880,000 to roughly 628,000, a decrease of about one-third. The migration has not started yet, and the figures are based on Lido's projections.
Do Lido stakers need to take action for the upgrade?
No. Lido stated no action is required from stakers because the upgrade will be handled at the protocol level.
