Lido has announced a significant upgrade with the introduction of the Staking Router v3, officially known as LIP-35. This enhancement fundamentally alters how Lido manages validator balances, processes deposits, and transitions stakes through various modules.
#Why is the Timing Relevant?
The timing of this upgrade is aligned with Ethereum’s Pectra upgrade, which implemented EIP-7251. This proposal allows validators to hold a maximum effective balance of 2048 ETH, an improvement from the previous limit of 32 ETH. The existing system utilized by Lido, which was based on a count mechanism, lacked the necessary capability to accommodate this increase in flexibility. Thus, the new version aims to address this gap.
#What Are the Changes Underlying the Upgrade?
At the heart of this upgrade is a significant transition from a count-based accounting method to a balance-based one. Previously, all validators were viewed as uniform entities; the new system allows for more accurate tracking of actual ETH balances. This adjustment is crucial as it ensures precise calculations for totalPooledEther, which is vital for determining the stETH exchange rate.
In addition to the accounting changes, Lido introduces a TopUpGateway, a new mechanism designed to manage predeposits and top-ups. This feature employs on-chain Merkle proofs, a cryptographic approach enabling the protocol to confirm deposit authenticity without relying on a single authority.
Furthermore, a deposit reserve has been established to handle ETH during migrations and routine deposit operations. This comprehensive setup also includes a consolidation pipeline allowing proof-verified stake migration primarily between Curated Module versions 1 and 2. The stake migration process will occur over several phases, extending into early 2027.
#What is the Timeline and Governance for This Upgrade?
On June 3, 2026, Lido officially announced the upgrade. Stakeholders will have an opportunity to vote on this initiative via Snapshot at the end of June, allowing LDO holders to express their approval before the changes are implemented.
Currently, audits are in progress, anticipated to conclude by early July 2026. If the Snapshot vote affirms the proposal and the audits yield no serious concerns, the planned deployment on the mainnet is set for July 2026. Currently, public testnet activities for these consolidations are already being conducted in conjunction with the broader development of version 3.
#How Does This Set the Stage for Future Developments?
The Staking Router v3 serves as a fundamental component for future upgrades, including LIP-33, which will feature subsequent versions of the Community Staking Module and Curated Module. The balance-based accounting system and consolidation capabilities introduced in v3 will be critical for the smooth operation of these advanced modules.
Moreover, allowing validators to manage an effective balance of up to 2048 ETH enables larger staking operators to consolidate numerous former validators into a smaller number. This capability reduces operational complexity, decreases gas fees, and simplifies monitoring tasks.
#What Risks Should Stakeholders Consider?
As this multi-phase migration enters 2027, stakeholders should remain alert to potential execution risks. The coexistence of old and new systems for several months will require careful management. The outcome of the forthcoming Snapshot vote will provide insight into community alignment surrounding this roadmap. Investors are advised to monitor audit outcomes, as these results will help clear the path for the scheduled July deployment.