Lido has introduced its Core 2026 upgrade, bringing native 0x02 validator support to its main staking module, revamping node operator incentives with ETH-backed bonds, and initiating a consolidation effort that could reduce Ethereum’s validator count by nearly one-third.
No action is needed from stakers, as all updates are handled at the protocol level.
The timing is significant. Ethereum’s Pectra hard fork delivered EIP-7251, increasing the maximum validator balance from 32 ETH to 2,048 ETH using 0x02 withdrawal credentials. However, adopting this upgrade required coordinated infrastructure changes.
Lido’s update represents the largest rollout of this new validator structure so far.
Curated Module v2: A Major Shift
Since its launch in 2020, Lido’s Curated Module has accounted for about 90% of the protocol’s staked ETH. With the release of Curated Module v2 (CMv2), native 0x02 support is now enabled, allowing over 265,000 validators to transition from older 0x01 credentials through consolidation.
This shift increases the share of ETH held by compounding validators from 32.06% to 52.21%. At the same time, the total number of Ethereum validators is projected to drop from around 880,000 to roughly 628,000—cutting attestation messages per epoch by about 29%.
That reduction has broader network benefits. Fewer attestations mean lower processing and networking demands across the consensus layer, improving efficiency for all validators.
In simple terms, a smaller validator set leads to a leaner and more efficient beacon chain.
The rollout is split into two phases. Phase 1, now live, includes 0x02 support, operator classification, bond-based security, and simplified governance. Phase 2, still in development, will introduce flexible stake allocation, customizable fees, and a strike system designed to rank operators based on performance.
Operator Model: From Trust to Collateral
A key change in CMv2 is how node operators are incentivized and held accountable. Previously, the system relied on reputation, expecting operators to act responsibly without requiring locked collateral.
The new model introduces ETH-backed bonds, ensuring operators have financial stakes tied to their performance. These bonds cover risks such as downtime, slashing incidents, underperformance, and reward-related violations.
Lido has also implemented a Node Operator Type Framework, categorizing operators based on their roles. These include Decentralization Operators, who improve network diversity; Extra Effort Operators, who contribute capital and governance participation; and Public Good Operators, such as Ethereum client developers.
Seven client teams have already joined as curated node operators. As of July 1, 2026, they have collectively earned 8,710 stETH—valued at approximately $21 million—in staking rewards.
Governance has also been streamlined. Routine updates that previously required DAO-wide votes can now be handled by operators and the Curated Module Committee. However, the DAO still retains authority over major decisions, including operator selection and key protocol parameters, along with the power to override changes if necessary.
