Lido launches the biggest upgrade: it will consolidate more than 8 million ETH stakes, and the number of validators is expected to drop by one-third

According to news, Ethereum's largest liquidity staking protocol Lido announced the launch of the largest protocol upgrade since the V2 upgrade in 2023, which will integrate more than 8 million staked ETH (approximately US$16.5 billion) and migrate to the new validator architecture after the Ethereum Pectra upgrade.

The migration is expected to reduce the number of validators on the Ethereum network by about one-third, reducing the load on the consensus layer. Lido said that after the upgrade is completed, the number of attestations (attestations) for each epoch of the entire Ethereum network is expected to decrease by about 29%, thereby improving network operation efficiency.

This upgrade migrates professional node operators to Curated Module v2 (CMv2) architecture. Unlike previous ones, which mainly relied on operator reputation and historical performance, CMv2 for the first time required Lido selected node operators to provide financial guarantees for node operation performance by locking in ETH as security deposit.

Lido said that currently all 34 selected node operators are expected to complete the migration, and no operators have withdrawn due to additional security deposit requirements. Isidoros Passadis, head of Lido staking, said the upgrade will make the pool of validators supporting Lido's core pledge business more streamlined, while improving security through capital constraints.

Lido anticipates that the move will reduce the agreement's annual staking earnings by around 0.28%. Validators will continue to receive rewards until they exit the migration, and loss of revenue may only occur for a short time before the balance is transferred to the new validator.