What to know:
- Lido Core launched Curated Module v2, allowing Ethereum validators to increase staking capacity from 32 ETH to 2,048 ETH.
- The upgrade aims to improve validator efficiency and decentralization while potentially reducing Ethereum validator counts from 880,000 to 628,000 over time.
- New security features introduce stricter bonding and penalty rules for node operators to strengthen network reliability and accountability.
Lido Core has unveiled an upgrade for its staking framework for Ethereum, featuring enhanced capabilities designed to increase the efficiency of the validators and boost decentralization.
The upgrade enables validators to work with higher staking amounts while requiring fewer validator addresses on the network. As per the protocol, the upgrade will be automated by Lido Core, and hence, the stETH holders need not perform any action.
Lido Core Introduces Curated Module v2
The new Lido Core update includes the integration of Ethereum’s 0x02 withdrawal credentials via the introduction of Curated Module v2. As a result, the protocol will enable the validators to boost their actual amount of staked ETH from 32 ETH up to 2,048 ETH.
Thus, by increasing the number of ETH for each validator, the update is expected to reduce the complexity of the validators’ tasks and enhance staking infrastructure efficiency without affecting the staking process via Lido.
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Validator Count Could Drop by Nearly One-Third
In Lido’s opinion, the new system may bring about a decrease in the number of validators on the Ethereum network, lowering their number from the current 880,000 to 628,000, but the migration process is yet to begin, and these numbers should be considered speculative.
Thanks to the decreased number of validator accounts, Lido Core assumes that Ethereum will see less processing of validator messages by the consensus layer.
Lido stated that the update is only affecting the Ethereum Consensus Layer, while the Execution Layer that manages transaction processing and gas fees will remain the same.
Consequently, the transaction speed and fees will not be affected by the Lido Core update.
New Security Measures for Node Operators
Moreover, more stringent accountability protocols have been introduced for the node operators, including bonding and penalties for encouraging proper performance and increasing network security.
Another thing that could be added in the future is more weight being put on the operator’s performance, fees, and contributions to the Ethereum network. Lido is convinced that these measures will lead to better node operators joining the protocol.
According to Lido, Curated Module v2 is the next step forward in the development of Lido Core.
Lido also clarified that there will be no need for any user with stETH tokens to migrate their funds or change their staking positions manually. The Lido Core upgrade will happen totally at the protocol level, enabling users to earn from their staking on Ethereum uninterrupted.
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