Lido has proposed a plan to cut the number of Ethereum validators by about one-third through a staking infrastructure upgrade. Cointelegraph reported on July 28 that the upgrade is focused on improving validator operating efficiency and decentralisation.

In the upgrade, Lido will introduce "Curated Module v2" and support Ethereum 0x02 withdrawal credentials. This could increase the effective balance per validator from 32 ETH to as much as 2,048 ETH.

Lido estimated that if the structure is applied, the number of Ethereum validators could fall from about 880,000 to about 628,000. Cointelegraph said the migration has not yet begun and that the figures are Lido's projections.

With fewer validators, the number of validator messages needed to maintain the network also declines. Cointelegraph said the change affects Ethereum's consensus layer but is not designed to alter execution-layer activity that determines transaction fees and gas costs.

Lido also strengthened rules on node operator accountability. The new system includes a deposit and penalty mechanism, and future staking allocation could more heavily reflect operating performance, fees and contributions to the Ethereum ecosystem.

Lido said the upgrade also includes new operator incentives, a deposit-based security feature and governance improvements. Stakers do not need to take separate action, as the upgrade will be handled at the protocol level.