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Lido kicked off its largest protocol upgrade since Lido V2 on Monday, rolling out Curated Module v2 and Community Staking Module v3 while beginning to consolidate more than 8 million ETH (worth ~$16 billion) onto Ethereum's larger, post-Pectra validators.
What's the Scoop?
- The consolidation: Lido is migrating over 260,000 Curated Module validators from legacy 0x01 credentials to the newer 0x02 standard, which allows a single validator to hold up to 2,048 ETH instead of 32. The shift lifts the share of ETH secured by these larger "compounding" validators from about 32% to roughly 52%, while cutting Ethereum's total validator count by close to a third and trimming attestation messages by an estimated 29% per epoch.
- New guardrails: For the first time, Curated Module operators must post their own ETH as collateral, which can be seized to cover losses from slashing or operational failures. It's a bond-based backstop layered on top of Lido's existing reputation-based vetting.
- Permissionless level up: CSMv3 introduces a new "Identified DVT Cluster" path with lower bonding requirements, native reward-splitting for operators, and faster governance for adjusting staking capacity limits. Following a DAO vote, 72 regular Simple DVT clusters have been wound down, with those operators routed toward CSM going forward.
