# Lido Warns Ethereum Upgrade Could Divert Staking Deposits to Builders

By Simon Yoon

Canonical URL: https://www.tokenpost.com/news/technology/35689
Published: 2026-10-20T13:32:47.000Z
Updated: 2026-10-20T13:32:47.000Z
Section: Technology

> The risk concerns deposits queued during Glamsterdam’s transition. Developers declined a proposed protocol change.

Lido engineering lead Dmitry Gusakov warned that Ethereum’s Glamsterdam upgrade could route queued staking deposits to block builders during its transition, exposing a gap in protections used by staking protocols.

At a developer meeting, Gusakov described builder and validator deposits sharing a public key while queued at the fork. A pending deposit sharing that key could be credited to the builder without creating the validator the staking protocol expects.

Under Ethereum’s current rules, the first valid deposit for a validator public key fixes its withdrawal credentials, which determine where withdrawals go. Some staking protocols protect deposits by first sending a small amount of Ether (ETH), checking that the validator appears with the intended credentials, and then sending the remainder. That check may fail if no validator appears and the pending funds are instead credited to a builder.

Lido proposed keeping validator and builder deposits separate during the one-time onboarding process. Core developers declined the change because Glamsterdam had already activated on the Sepolia testnet and Hoodi client releases were being prepared. Changing the process now could require another Sepolia deployment and additional testing. The concern applies to deposits queued at the fork, rather than routine deposit processing afterward.