Lido has deployed its Core 2026 upgrade, introducing native 0x02 validator support to its primary staking module, overhauling node operator incentives with ETH-backed bonds, and kicking off a consolidation process expected to reduce Ethereum’s validator count by roughly one-third.
No action is required from stakers, as the upgrade operates entirely at the protocol level.
The release comes at a key moment for Ethereum. The Pectra hard fork introduced EIP-7251, raising the maximum effective validator balance from 32 ETH to 2,048 ETH through 0x02 withdrawal credentials. However, implementing this change at scale required coordinated infrastructure updates.
Lido’s upgrade represents the largest adoption of this new validator model so far.
Curated Module v2: Structural Changes
Since 2020, Lido’s Curated Module has accounted for around 90% of the protocol’s staked ETH. With Curated Module v2 (CMv2), native 0x02 support is now enabled, allowing more than 265,000 validators to migrate from legacy 0x01 credentials through consolidation.
This transition increases the share of ETH held in compounding validators from 32.06% to 52.21%. At the same time, Ethereum’s validator count is projected to drop from about 880,000 to roughly 628,000—reducing attestation messages per epoch by approximately 29%.
That reduction extends beyond Lido. Lower attestation volume decreases the computational and networking load across Ethereum’s consensus layer, improving efficiency for all validators.
In effect, fewer validators mean a more streamlined beacon chain.
The rollout is being executed in two phases. Phase 1, now live, includes 0x02 support, operator classification, bonded security, and simplified governance. Phase 2, still under development, will introduce flexible stake allocation, custom operator fees, and a performance-based strike system.
Operator Incentives: Introducing Bonded Risk
CMv2 fundamentally changes how node operators are held accountable. Previously, the system relied on reputation, with no requirement for locked collateral.
The new model introduces ETH-backed bonds, ensuring operators have financial exposure tied to their performance. These bonds help cover risks such as downtime, underperformance, slashing penalties, and execution-layer reward violations.
Lido has also introduced a Node Operator Type Framework, categorizing participants based on their roles. These include Decentralization Operators, who improve geographic and client diversity; Extra Effort Operators, who contribute capital and governance participation; and Public Good Operators, such as Ethereum client developers.
Seven client teams have already been added as curated operators. As of July 1, 2026, they have collectively earned 8,710 stETH—worth about $21 million—in staking rewards.
Governance has also been streamlined under CMv2. Routine updates that previously required DAO votes can now be handled by operators and the Curated Module Committee. However, the DAO still retains control over key decisions, including operator selection and protocol parameters, with the ability to override or veto changes if needed.
