Lido begins consolidating $16 billion worth of staked ETH as Curated Module v2 rolls out

Major Ethereum staking project Lido is consolidating around a fifth of all staked ETH onto Ethereum's larger post-Pectra 0x02 validators, as part of a major protocol upgrade on Monday.

This represents a consolidation of more than 8 million ETH, worth about $16 billion.

These 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.

In addition to boosting the amount of staked ETH on 0x02 validators to roughly 52%, from about 32% today, 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.

Curated Module v2

In particular, 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.

Launched in 2020, Lido is a so-called liquid staking protocol that provides technology to make it easier to stake ETH, securing the Ethereum network. Its Curate Module was its first permissioned staking module, made up of DAO-approved professional node operators and Ethereum client teams who run validators on behalf of stETH holders.

CMv2 will now require 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.

“An upgrade like this, for a protocol of Lido's size, require extensive technical and operational scoping, followed by multi-stage internal and external testing and coordination with Node Operators, researchers, auditors and more,” Lido wrote earlier this year.

Ethereum staking environment

Lido represents a significant infrastructure provider for Ethereum. The project has actually faced criticism in the past for its concentration of staked ETH.

Alongside CMv2, 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.

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.

Expand Chart

 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.