Lido’s 1,500 ETH reserve target could slow stETH withdrawals during liquidity crunches

Lido’s protocol maintains a buffer of ETH to handle both stETH withdrawal requests and new validator deposits. A 1,500 ETH reserve is currently prioritized for validator deposits, which may limit the liquidity available for stETH withdrawals during periods of high demand. On September 25, the Curated Module Committee gained the authority to adjust this priority, though the 1,500 ETH target remained unchanged as of September 27. The committee has proposed a plan to temporarily remove this protected reserve, potentially reallocating it for future staking modules, though the impact on withdrawal wait times remains dependent on buffer inflows and the volume of pending requests.