Lido plans to migrate $16.5 billion staked ETH to a new validator architecture, with the number of validators expected to decrease by one-third.

Foresight News reports, according to CoinDesk, that liquid staking protocol Lido has announced the largest upgrade since its 2023 V2, initiating the process of consolidating over 8 million staked Ethereum (stETH, worth approximately $16.5 billion) into the new validator architecture introduced with Ethereum’s Pectra upgrade. This move is expected to reduce the total number of Ethereum validators by about one-third and significantly ease the consensus layer’s load. Lido stated that the integration could decrease the total number of validator messages per epoch across the network by approximately 29%.

This upgrade migrates Lido’s professional node operators to the Curated Module v2 (CMv2). For the first time in Lido’s five-year history, the new system requires curated module operators to back their performance with locked ETH collateral; previously, the system relied only on reputation and track record. Isidoros Passadis, Head of Staking at Lido Labs Foundation, said this is the biggest shift to Lido Core’s staking mechanism since Lido V2. Lido confirmed that all 34 of its current operators plan to transition to CMv2, with none leaving due to collateral requirements. This migration is expected to reduce the protocol’s annualized staking yield by around 0.28%, with validators continuing to earn rewards until their exit.