Ethereum Staking Providers Implement Self-Limit Rule to Preserve Decentralization
Summary:
Several Ethereum liquid staking providers, including Rocket Pool, StakeWise, Stader Labs, Diva Staking, and Puffer Finance, are implementing or planning a self-limit rule to prevent owning more than 22% of the Ethereum staking market. The move ensures the network remains decentralized. The proposal addresses concerns about centralization in Ethereum staking, with mixed reactions from the community. Lido Finance, the largest staking provider, voted against self-limiting.
Several Ethereum liquid staking providers, including Rocket Pool, StakeWise, Stader Labs, Diva Staking, and Puffer Finance, are either implementing or planning to implement a self-limit rule to ensure that they do not own more than 22% of the Ethereum staking market. This move is seen as a way to maintain decentralization on the Ethereum network. The proposal aims to address concerns about increasing centralization in Ethereum staking. According to Superphiz, an Ethereum core developer, setting the limit below 22% requires collusion among at least four major entities for the chain to reach finality, where transactions are considered immutable. Superphiz proposed this idea in May 2022, questioning whether staking pools would prioritize the chain's health over their own profits. However, the largest Ethereum liquid staking provider, Lido Finance, voted against self-limiting back in June. Lido currently holds a dominant market share of 32.4%, while Coinbase accounts for only 8.7% of the market. The proposal has stirred mixed reactions within the Ethereum community, with some arguing that it is not about Ethereum alignment but rather about economic self-interest, while others express concerns about potential centralization issues.
Published At
9/1/2023 3:16:48 AM
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