Lido, the largest liquid staking protocol on Ethereum, rolled out Curated Module v2 this week — an upgrade that could cut the number of validators on the network by roughly one-third. The change introduces new operator rules and validator consolidation mechanisms, aiming to improve efficiency and reduce overhead. If the projected reduction materializes, it would mark one of the biggest shifts in Ethereum’s validator composition since the Shanghai upgrade enabled withdrawals.
What the upgrade does
Curated Module v2 lets Lido consolidate smaller validators into larger ones. Under the current system, Lido’s node operators run many validators with 32 ETH each. The new module allows them to merge those into fewer, bigger validators — potentially cutting the total number of Lido-operated validators by about 30%. That’s roughly one-third of all Ethereum validators, since Lido controls a significant share of the network’s staked ETH.
The upgrade also tightens operator requirements. Node operators must meet stricter performance and reliability standards to stay in the module. Lido says the changes are designed to reduce network load and improve staking yields for Lido’s users.
Ethereum’s validator set has grown rapidly since the transition to proof-of-stake. More validators mean more network traffic for attestations and block proposals. Consolidation could ease that pressure, making the network more efficient. But it also concentrates power — fewer validators means fewer entities controlling a larger share of the network’s security.
The timing isn’t accidental. Ethereum’s next major upgrade, Pectra, is expected to include changes that make validator consolidation easier. Lido is getting ahead of that curve.
What’s next
The upgrade is live now, but the full effect won’t be immediate. Node operators need to migrate to the new module, and consolidation will happen gradually. Lido hasn’t set a deadline for the transition. The real test will be whether the projected one-third reduction actually happens — and whether it sparks a broader trend among other staking pools.
