Over the past months, several teams across Lido have been analyzing what it will require to migrate and consolidate the Curated Module from its legacy architecture (CMv1) into CMv2, which will support 0x02 validators. This is, in part, due to the required evolution of Lido’s largest module to an efficient and mostly autonomous state, but also in order to support the Ethereum network’s roadmap.
This post summarizes the financial implications we’ve analyzed of this migration, the expected operational constraints, and practical levers we have for reducing costs. The goal is to raise awareness within the broader community and stakeholder groups of the resource requirements to support these changes, and open discussion on the strategic approach to this upgrade.
How Lido Approaches Upgrades
Understanding this dynamic is key to contextualizing the upcoming CMv2 migration and exploring strategies to make these necessary upgrades more efficient over time.
Base-layer evolution on Ethereum inevitably creates downstream requirements for all onchain staking solutions, such as Lido, and navigating those changes is a core part of maintaining a resilient, future-proof staking protocol. In practice, truly immutable systems are impractical in the current environment. Ethereum’s continuous evolution means the Lido protocol must also update to ensure feature parity, and to preserve user safety and network alignment.
For a protocol of Lido’s size, each upgrade begins with scoping the required changes and mapping out the impacts to affected parties, followed by designing both the technical and operational adjustments required for compatibility. This work then moves through multi-stage internal and external testing, often involving several rounds of coordination with Node Operators, researchers, and auditors.
The result is a substantial investment of engineering hours, operational overhead, and external review. These recurring costs are, in many ways, a “decentralization premium”: the price of maintaining a distributed (and increasingly permissionless) validator set that remains adaptive to Ethereum’s roadmap.
| Category | What | Estimated cost (USD) | Notes |
|---|---|---|---|
| R&D | EIP review, impact analysis, protocol design tradeoffs, stakeholder alignment | $300k - $600k | Dedicated research team, design work spans months / multiple teams |
| Protocol design & implementation | Core engineering work | $600k | Considers ~600 engineering hours work for ~10 people |
| Devnets & testnets | Local and ephemeral devnets, canonical testnet (Hoodi) | $300k - $450k | Including full infra simulation and NO participation |
| Security audits | External audits (typically 2+ firms), formal review of changes | $500k – $1M | Assuming isolation and minimum two audits before mainnet |
| Governance & release ops | DAO proposals, onchain voting, deployment plans, upgrade scripts | $100k – $200k | Onchain governance, deployment rehearsals, and upgrade execution |
Meaning, $1.8M - $2.8M estimated cost per hardfork that entails substantive changes to the consensus layer related to staking and/or validator operations (not including opportunity cost). It should be noted that these costs could be reduced by lowering assigned headcount and robustness of security practices, but this would most likely extend the time to execution.
A Breakdown of CMv2 and the Migration
The motivation for CMv2, and the design choices behind it, are laid out in detail in the Future of the Curated Module | CMv2 Landscape post, but at a high level it is driven by factors both internal and external to the protocol. To remain aligned with Ethereum’s scaling goals, the Lido protocol must support new validator primitives (0x02 validator type), which enable dramatically reduced validator counts through consolidation, unlocking certain operational efficiencies and positioning the Curated Module for long-term sustainability.
Beyond compatibility, CMv2 introduces improved accountability mechanisms for Node Operators, creates clearer economic incentives, and enhances operational flexibility with new features for NOs. All of these contribute to a more robust and future-proof validator set.
For CMv2 to function as intended, its rollout requires a full migration of all stake currently held in the existing Curated Module (which today accounts for roughly 92% of all Lido stake, (~25$B TVL) into CMv2 once it has been deployed. CMv2 will be launched as an entirely new module, making a complete transfer of stake and validator operations necessary to realize its design goals.
The migration to CMv2 is expected to begin around spring 2026 and, under ideal network conditions, should take roughly between 4.5 - 6 months to complete.
This transition will unfold in two consecutive stages, each carrying distinct operational and financial implications that shape the overall cost and pacing of the migration process.
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Initial Seeding of New Validators
To establish CMv2 at the intended scale (~7.95M ETH), approximately 3,882 0x02 keys must be provisioned in order to seed validators in the new module (CMv2). This initial seeding requires about 124,224 ETH in fresh deposits, and the cost structure of this stage depends heavily on protocol timing constraints. These include withdrawal delays for 0x01 validators, variability in skimming schedules, oracle reporting latency, and any backlog in the activation queue. Together, these factors affect how quickly ETH can be recycled into new CMv2 validators and ultimately influence the effective cost borne by the protocol during this onboarding phase. It’s important to note that to reuse any part of our current indices in the new module, it would require significant additional technical work on top of the changes already planned
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Consolidation of Remaining Stake via EasyTrack
After seeding, the remaining ~7.82M ETH must be consolidated into the new validator structure. Consolidation is significantly more reward-efficient than a full exit-and-deposit cycle, but it is still bounded by Ethereum’s consolidation queue limits (currently 298 ETH per epoch), which dictates a theoretical minimum migration duration of about 117 days. This stage also involves on-chain transaction costs for executing ~556 consolidation operations. While relatively modest in gas terms, these operations must be coordinated carefully to minimize disruption, ensure correctness, and maintain reward continuity.
A more detailed timeline and execution plan will be shared with Node Operators as the migration approaches, but even this high-level breakdown underscores that CMv2 is a complex, resource-intensive process.
Estimated Costs of the Migration
Below is a breakdown of the full set of costs we’ve analyzed so far that will affect the protocol throughout the CMv2 migration and consolidation process. These estimates capture both the direct protocol impacts and the broader operational and ecosystem-level effects expected during the transition:
1. Protocol Missed Rewards
These reflect rewards the protocol won’t earn while ETH is temporarily inactive during migration steps.
- Initial seeding missed rewards: ~55.6 ETH
- Missed rewards from new deposits: ~41.9 ETH
- Consolidation-related missed rewards: ~682.9 ETH
- Total protocol impact: ~738.5 ETH, equal to roughly 0.28% of annual Lido rewards
2. Operational Costs
Direct on-chain and operational expenses incurred during the migration.
- Gas costs:
- Upper boundary (2 gwei gas price): ~40 ETH
- Optimized (0.07 gwei gas price): ~1.5 ETH
- Node Operator withdrawal overhead:
- Additional partial withdrawal costs if post-migration stake later requires consolidation
- Impact depends on operator timing and deposit patterns
| Protocol missed rewards | Operational costs | USD* | |
|---|---|---|---|
| Initial seeding | 55.6 ETH | $166k | |
| Consolidation | 682.9 ETH | 40 ETH (1.5 ETH at current gas prices) | $2.04M (missed) / $120k (ops) |
| Total | 738.5 ETH | 40 ETH | $2.215M(missed) / $120k (ops) |
Assuming 1ETH = 3,000 USD
As an additional note, the current Curated Module is expected to remain open for deposits throughout the migration so that Lido’s staking capacity is not artificially constrained. However, any new ETH deposited into the CM during this period will eventually need to be consolidated into CMv2, which introduces extra costs.
For every 100,000 ETH deposited into CMv1, stakers would incur approximately 8.72 ETH in missed rewards, while operational gas expenses would add roughly 0.5 ETH to the total migration cost. Assuming a ~2.8% annualized staking reward rate, 100,000 ETH should generate approximately 2,800 ETH in staking rewards over one year. Thus, it would be equivalent to a ~0.31% dilution of total staking rewards for that stake, due to migration-related operational overhead.
CMv2, and the upcoming migration to the new module, represents a major infrastructure event for Lido. We are currently assessing several optimizations (especially around speeding up the initial seeding phase) but we want to share with the community for extra input on the upcoming plans. We want to hear what other improvements should be considered, both technically and operationally, to reduce costs and streamline execution.
We also invite Node Operators to share what tooling, coordination, or support would help ensure a smoother transition. As Ethereum continues to evolve, Lido must evolve with it to preserve security, performance, and decentralization. Your feedback will directly shape how we get there.