Lido Protocol Prepares for Ethereum’s Pectra Hardfork with Key Updates – BitRss

The Lido Protocol is undergoing significant adjustments to align with Ethereum’s upcoming Pectra hardfork. This update is crucial for maintaining synchronization with Ethereum’s evolving consensus rules. Key changes include updates to the oracle infrastructure, addressing Ethereum’s new deposit queues and dynamic validator balances, as well as a redeployment of the CS Verifier contract. These changes aim to incorporate revised proof indexing and remove the significantly reduced initial slashing penalty.

Oracle reporter sanity checker parameters will also be refined, reducing the daily limits for validator exits and appearances. To implement these changes, two sequential on-chain votes are planned, one before and one after the hardfork. Fallback measures, such as pausing deposits, are in place to ensure operational stability. Some new functionalities of Pectra are expected to be integrated into subsequent upgrades to the protocol, subject to DAO ($1.96) approval. More details can be found here.

Pectra: Enhancements and Impacts

Pectra is Ethereum’s upcoming network upgrade, combining enhancements from the Prague and Electra hard forks. This upgrade impacts both the consensus and execution layers, introducing significant changes designed to improve validator operations, network efficiency, and user experience. On the consensus layer, Electra expands the effective balance range for validators, raising the upper limit to 2048 ETH ($2,233.21). It also enables validators to initiate full or partial withdrawals directly from their withdrawal credentials address, streamlining fund management.

Meanwhile, the execution layer benefits from Prague’s innovations, including support for more blobs per Ethereum block, improving scalability for rollups. Additionally, Prague enhances EOA (Externally Owned Account) capabilities by account abstraction. Some Ethereum Improvement Proposals (EIPs) included in Pectra span both layers, improving the in-protocol coordination and messaging mechanisms for operations like deposits and withdrawals that require synchronization between the consensus and execution layers.

How Pectra Impacts Lido

The immediate focus for Lido is to ensure that the protocol remains fully operational through and following the Pectra hardfork. This involves removing the initial slashing penalty, which is now approximately 0.008 ETH, compared to the previous 1 ETH deduction. Accounting for this penalty only at final withdrawal is proposed. Additionally, off-chain services such as accounting, the validator exit bus, and CSM ($0.02) fee oracles will be updated to track validator status and compute rewards and penalties.

The addition of deposit queues and modified validator balances in Electra requires new logic to handle dynamic waiting periods for validator activation. The CS Verifier contract will be redeployed to incorporate dual sets of gIndexes due to Pectra’s reorganization of consensus-layer containers. Oracle report sanity checker restrictions have been tightened due to the reduced initial slashing penalty and changes in the validator entry queue.

Looking ahead, future protocol upgrades will address opportunities to optimize the validator footprint of the Lido protocol, ensuring it evolves in step with Ethereum’s ongoing upgrades and broader network improvements. New features such as triggerable exits in EIP-7002 and consolidation logic in EIP-7251 may be adopted through separate proposals.

Why This Matters: Impact, Industry Trends & Expert Insights

The Lido Protocol is updating its infrastructure to align with Ethereum’s upcoming Pectra hardfork, ensuring compatibility with the latest consensus rules and network enhancements.

According to a Stakely report, the Ethereum Pectra hardfork is a major upgrade that combines the Prague and Electra updates to enhance scalability, efficiency, and staking mechanisms. This is evident in Lido’s efforts to update its protocol to accommodate the changes introduced by Pectra, such as the new deposit queues and validator balance adjustments.

A Binance analysis highlights the Pectra hardfork’s potential to significantly impact Ethereum’s scalability and transaction processing speed. This reinforces the importance of Lido’s updates to maintain operational stability and efficiency in the face of Ethereum’s evolving network capabilities.

Disclaimer: The views expressed in this article are those of the authors and do not necessarily reflect the official policy of CoinsHolder. Content, including that generated with the help of AI, is for informational purposes only and is not intended as legal, financial, or professional advice. Readers should do their research before taking any actions related to the company and carry full responsibility for their decisions.

The post Lido Protocol Prepares for Ethereum’s Pectra Hardfork with Key Updates appeared first on CoinsHolder. creator solana token