BlockBeats report: On July 27, Ethereum’s largest liquid staking protocol, Lido, announced the launch of its largest protocol upgrade since the 2023 V2 upgrade, integrating over 8 million staked ETH (approximately $16.5 billion) into the new validator architecture following Ethereum’s Pectra upgrade.
This migration is expected to reduce the number of Ethereum network validators by approximately one-third, lowering the load on the consensus layer. Lido states that after the upgrade, the total number of attestation messages per epoch across the entire Ethereum network is projected to decrease by about 29%, enhancing network operational efficiency.
This upgrade migrates professional node operators to the Curated Module v2 (CMv2) architecture. Unlike previous systems that relied primarily on operators’ reputation and historical performance, CMv2 now requires Lido-curated node operators to lock ETH as collateral, providing economic assurance for node performance.
Lido stated that all 34 selected node operators are expected to complete the migration, with no operators exiting due to the new collateral requirements. Isidoros Passadis, Lido’s Staking Lead, said this upgrade will streamline the set of validators supporting Lido’s core staking business while enhancing security through capital constraints.
Lido estimates that this migration will reduce the protocol's annual staking yield by approximately 0.28%. Validators will continue to receive rewards until they exit the migration; yield losses may only occur during the brief period before balances are transferred to the new validators.