Lido, Giant in Liquid Staking, Transfers 8 Million ETH to New Validators to Alleviate Ethereum Network Load

This stake, valued at approximately $16.5 billion, constitutes about one-fifth of all $ETH currently staked. Node operators will consolidate it by moving it from legacy Ethereum 0x01 validators to 0x02 validators—a format made possible by the Ethereum Pectra hardfork implemented earlier this year, Lido explained.

Pectra allows a single validator to hold up to 2,048 $ETH instead of the previous 32 $ETH limit. This means operators can consolidate thousands of validators into a much smaller number while maintaining the same amount of locked $ETH.

For Lido, this migration will increase the share of locked $ETH on 0x02 validators from today's roughly 32% to about 52%. Furthermore, upon completion, the total number of Ethereum validators will decrease by nearly one-third.

What This Means for the Network

Fewer validators managing the same amount of staked funds reduces the amount of data the Ethereum consensus layer must process per slot. Ethereum researchers aim for a more compact validator set that can achieve finality faster and is cheaper to operate. Lido's consolidation, the largest of its kind to date, immediately pushes a significant portion of the network in this direction.

"This is the biggest change to the operational mechanics of Lido Core staking since the launch of Lido V2," explained Isidoros Passadis, Head of Staking at Lido Labs Foundation. "Node operators securing the majority of the $ETH staked through Lido are consolidating into far fewer validators and for the first time backing that stake with their own capital, making the validator set underlying Lido Core much more compact and secure."

Operators Now Commit Capital to Back Performance

The upgrade, named Curated Module v2, changes more than just validator count. For five years, Lido's Curated Module operated largely on the basis of operators' reputation and track record. Under CMv2, Curated node operators are now required to lock $ETH as collateral to cover risks such as slashing penalties, execution-level reward rule violations, and operational failures.

Collateral has been required for the operation of Lido's permissionless Community Staking Module (CSM) since its launch in 2024. CMv2 marks the first time this requirement extends to professional operators handling the bulk of the $ETH staked through Lido.

A separate update, CSM v3, adds a new operator category called "Identified DVT Clusters." It is designed for vetted community stakers who collectively run validators using Distributed Validator Technology from providers like Obol or SSV. Splitting a validator across independent operators reduces slashing and downtime risk, so the required collateral is smaller relative to the stake amount it secures.

No Action Required from Stakers

CMv2 and CSM v3 are already live. Over the coming months, curated operators will migrate validators from 0x01 to 0x02 following Ethereum's activation schedule. Holders of stETH do not need to take any action, and their assets are unaffected by this migration.

Lido also announced a later phase, expected around Q1 2027, which will launch a marketplace where operators will compete for stake allocation based on fees and performance.