Lido

**Lido DAO has approved major protocol upgrades** that will enhance its staking infrastructure. The approved changes include: - Upgrading Community Staking Module (CSM) to v3 - Adding new Curated Module v2 on-chain - Built on Staking Router v3 The proposal is now under **Dual Governance review**. If no veto occurs, the upgrades will be deployed to mainnet. **No action required from stakers** - this is a protocol-level upgrade that will be implemented automatically. The vote passed after a governance window that ran July 15-17. Full details: [dao.lido.fi/vote/203](http://dao.lido.fi/vote/203)

Lido has published multiple security audit reports for its upcoming protocol upgrades: **Staking Router v3 & Community Staking V3:** - [Certora audit report](https://github.com/lidofinance/audits/blob/main/Certora%20Staking%20Router%20v3%20Audit%20Report%2007-2026.pdf) - [Statemind audit report](https://github.com/lidofinance/audits/blob/main/Statemind%20Staking%20Router%20v3%20Audit%20Report%2007-2026.pdf) **Easy Track Factories:** - [MixBytes audit report](https://github.com/lidofinance/audits/blob/main/MixBytes%20Lido%20Easy%20Track%20Factories%20(SRv3%20CSMv3%20CMv2)%20Security%20Audit%20Report%2007-2026.pdf) **Off-chain Oracle:** - [Composable Security consultation report](https://github.com/lidofinance/audits/blob/main/Composable%20Security%20Lido%20Oracle%20V8_0_2%20Security%20Consultation%20Report.pdf) Staking Router v3 introduces reallocated stake via consolidations, large validator deposit support, and streamlined validator management for improved protocol efficiency.

Lido has completed security audits for its Core upgrade, maintaining its standard practice of dual independent reviews. **What was audited:** - Smart contracts - Governance components - Off-chain infrastructure The protocol continues its track record of rigorous security practices, having conducted over 100 audits throughout its history with no user funds lost to date.

Aave has increased its supply cap to support a new strategy implementation. **Key Changes:** - Higher deposit limits now available for users - Additional allocation space created for new positions - Cap adjustment follows previous capacity increases in April This expansion continues Aave's pattern of gradually scaling supply and borrow limits as demand grows. Users can now deploy larger positions within the protocol's updated parameters.

EarnUSD has introduced a new strategy allocation featuring PT-srUSDe loops. The approach combines: - Fixed-yield principal tokens (PT) on Strata Markets' senior sUSDe tranche (srUSDe) - Looping mechanism on Aave with boosted leverage through Twyne - Powered by Pendle Finance infrastructure The strategy offers a fixed rate return with first-loss capital protection underneath. This builds on previous integrations where PT srUSDe gained support for 1-transaction looping, unwinding, and position optimization on DeFi Saver.

**Nansen has launched its first Ethereum staking product** - the Nansen ETH Vault, built on Lido V3's stVaults infrastructure. The vault enables users to stake ETH directly to Nansen-operated validators while maintaining liquidity. This marks Nansen's entry into the Ethereum staking market, leveraging Lido's V3 platform for transparent staking operations. **Key features:** - Direct staking to Nansen validators - Built on Lido V3 stVaults framework - Liquid staking functionality More details: [Lido Blog](https://blog.lido.fi/lido-v3-nansen-transparent-ethereum-staking-with-stvaults/) Product overview: [Nansen ETH Vault](https://lido.fi/stvaults-products-overview/nansen-eth-vault)

**Lido has achieved a perfect 12/12 score** on Aragon's Token Ownership Index, demonstrating strong tokenholder governance. **Key developments:** - Tokenholders maintain exclusive control over treasury allocations - LDO Accumulation Program underway with 471 stETH deployed in Batch #1 - Current batch closes May 29 - Automated buyback proposal passed via Snapshot vote - Onchain implementation scheduled for July The Token Ownership Index measures how much control tokenholders actually have over protocol decisions and assets. Lido's perfect score indicates tokenholders retain full authority over treasury management. [View announcement](https://x.com/LidoFinance/status/2057119256928542748)

**Financial Performance** Every quarter through Q1 2026 closed with a surplus, marking consistent profitability. **Key Metrics** - DAO Take Rate reached an all-time high of **6.10% in May** - Up from 4.96% in December, representing a **23% increase** - April results remained flat due to a one-time **$5.7M contribution to DeFi United** The steady quarterly surpluses demonstrate sustainable operations, while the rising take rate indicates improved revenue capture from protocol activity.

**KelpDAO Exploit Resolution Complete** A LayerZero bridge exploit left rsETH underbacked by over 100,000 ETH, directly impacting Lido's EarnETH vault with approximately $20M in rsETH exposure. **Community Response** - The 'DeFi United' initiative successfully raised 132,000 ETH to address the rsETH shortfall - Lido DAO contributed 2,500 stETH to the recovery effort - EarnETH's first-loss protection mechanism burned 144 ETH to fully cover user funds **Current Status** After 27 days of being frozen, the EarnETH vault is now operating normally. All affected users have been made whole through the combined efforts of the DeFi United initiative and Lido's protection mechanisms. The incident demonstrated the effectiveness of Lido's first-loss protection framework and the broader DeFi community's ability to coordinate recovery efforts during protocol exploits. [Full details](https://x.com/LidoFinance/status/2057452890281640296)

**Market Status** ETH has remained flat at $2,120 for several months with no significant price movement. **Staking Dynamics** - Total ETH staked increased faster than anticipated - Growth primarily driven by institutional players Grayscale and BitMine - Entry queue extended to over 50 days since late January **Behavioral Shifts** The 'APR Maxi' segment (yield-focused stakers) decreased from 16% to 10% of the market following the KelpDAO incident. This suggests a more cautious approach among aggressive yield seekers. **Network Activity** Last month saw 84,300 ETH issued versus only 4,100 burned, indicating the network remains inflationary despite renewed staking interest. L2 dominance continues to suppress mainnet activity and fee burn.