Lido’s 1,500 ETH reserve target could slow stETH withdrawals in a crunch

When stETH holders seek ETH through Lido’s withdrawal queue, the protocol can use ETH in its buffer to finalize their requests. Some of that buffer is also protected for new validator deposits. The more ETH set aside for deposits when both uses compete, the less is immediately available to the withdrawal queue.Lido’s Curated Module Committee gained the power to change that priority on Sept. 25. As of Sept. 27, the configured deposit reserve remained at 1,500 ETH, and the committee had yet to open a motion to adjust it. Its first published plan would remove the protected slice temporarily, then consider restoring it for a new staking module. The timing effect for stETH holders depends on how much ETH enters the buffer, how many withdrawals await finalization and whether validators are ready to accept deposits.Where the buffer goesLido’s contract documentation describes three portions of buffered ETH, allocated in order. A deposits reserve comes first, followed by a reserve for unfinalized stETH requests. ETH left over after both allocations is unreserved and can also fund validator deposits. This order keeps some validator-deposit capacity available when withdrawal demand would othe...