On July 27, the liquid staking protocol Lido initiated the Curated Module v2 upgrade, which will transition over 8 million ETH (approximately $16 billion) to new 0x02 validators.
Lido Core 2026 Upgrade
This significant evolution of Lido Core introduces enhancements across staking modules to ensure alignment with Ethereum’s roadmap and promote long-term sustainability of the protocol.
Stakers are not required to take any action as this upgrade occurs at the protocol level.
— Lido (@LidoFinance) July 27, 2026
The 0x02 upgrade will increase the ETH limit per node from 32 to 2048 tokens, enabling Lido node operators to manage a greater amount of staked tokens with fewer network participants. Following this migration, the share of ETH staked under the new standard will rise from approximately 32% to around 52%, while the total number of validators on Ethereum is expected to decrease by about one-third, thereby reducing the load on the blockchain.
Number of Ethereum validators before Pectra, in July 2026, and after migration to CMv2. Source: Lido.Additional Changes with Curated Module v2
Isidoros Passadis, head of staking at Lido Labs Foundation, referred to this upgrade as the most significant transformation of Lido Core since the protocol's second version. The Curated Module has been operational since the platform's launch in 2020 and currently accounts for around 90% of the staked coins on the platform. Until now, the module relied on reputation: the DAO selected professional operators and expected them to cover any losses incurred.
The new version will introduce financial backing, requiring operators to stake their own ETH as collateral, which can be forfeited in cases of slashing, prolonged downtimes, reward violations at execution level, and other failures. While this amount is less than in Lido's open modules, it ties the operator's capital to the quality of their performance and provides measurable protection for stakers, according to developers. The reputational model remains intact and is complemented by this new approach.
Another innovation is the categorization of operators into different groups with varying incentives:
- Decentralization Operators — launch nodes in underrepresented regions and on rare combinations of clients and infrastructure;
- Extra Effort Operators — invest in the protocol beyond validator maintenance: through capital, service roles like Lido's oracle or Deposit Security Committee, and participation in voting;
- Public Good Operators — develop and maintain clients for Ethereum's consensus and execution layers.
The last category reinforces what the DAO has been doing previously: seven client development teams are already working within the Curated Module and, as of July 1, 2026, have collectively earned 8710 stETH (approximately $21 million) in rewards.
Accumulated rewards of Ethereum client development teams. Source: Lido.The third set of changes pertains to governance. Previously, even routine administrative tasks, such as changing an operator's address, required on-chain voting, which slowed down responses to urgent issues. Now, such tasks are delegated to the operators themselves and the Curated Module Committee. The DAO retains control over the operator pool composition, key parameters, and veto power.
The migration from the old module will take time, as the queue for activating validators in Ethereum exceeds 40 days. In January, Lido developers estimated the transition period to be six months, with missed rewards during this time projected at around 738.5 ETH.
The previous module will remain as a backup option and will gradually be phased out. In the second phase of CMv2, the team promises a flexible distribution of stakes among operators, individual fees, and a strike system — a market model where the volume of delegated tokens depends on fees, performance quality, and contributions to the ecosystem.
Changes to Other Modules
At the same time, the third version of the Community Staking Module (CSM) was released — an open module for solo stakers and small teams. This module accounts for over 770,000 ETH and approximately 335 active operators, representing about 8.5% of Lido's total value locked (TVL) and 1.9% of staked ETH.
A key change is the introduction of a new participant type, Identified DVT Cluster (IDVTC), for those launching distributed validators via Obol or SSV. The collateral for this ranges from 1.5 to 0.5 ETH per key, with capital efficiency up to 3.1 times higher than solo staking.
The upgrade also allows specifying multiple addresses for receiving rewards with different shares — necessary for clusters that divide payouts among participants. The public staking share limit can now be adjusted via Easy Track instead of through Aragon voting.
The third module, Simple DVT, is being phased out: following a vote, 72 regular clusters were closed. Their operators may remain in the protocol via CSM — either along the general path with the status of Identified Community Staker or as part of a new IDVTC cluster. The DAO has approved a grant program for them. Super Clusters, involving advanced operators and participants of the Curated Module, will not be affected by these changes.
A separate module for 0x02 validators in the public contour of Lido is expected to launch in the fourth quarter of 2026; the current upgrade does not provide this capability, although the code for CSM v3 already supports the format. Stakers will not need to take any action, as all changes occur at the protocol level.
It’s worth noting that at the end of January, the Lido team deployed the v3 upgrade with a modular stVaults infrastructure on the mainnet.