Lido's Deposit Reserve Target Could Slowing StETH Withdrawals in a Crunch

Lido's Curated Module Committee has the power to change how it prioritizes withdrawals and deposits, which could affect stETH holders who seek ETH through Lido's withdrawal queue.

The committee gained this authority on Sept. 25 and as of Sept. 27 had yet to adjust the current 1,500 ETH target for the deposit reserve, which is meant to protect a portion of ETH for new validator deposits during high withdrawal demand.

The committee's first plan would temporarily remove the protected slice of ETH, then consider restoring it for the new staking module, 0x02 CSM. The launch of this module could provide more capacity for depositable validator keys and potentially reduce competition with withdrawals for buffered ETH.