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Lido Community Signals Intent to Keep Ethereum Staking Uncapped

Last week, Lido Governance proposal Limit the amount of Ethereum Users can bet after facing criticism from the crypto community.

“Who was the first staking provider to publicly promise to limit the operation of more than 22% of validators on the chain?” Tweet Ethereum Beacon Chain Community Manager Superphiz. “Who wants to step up to the plate and prioritize the health of the beacon chain over profit?”

Lido is a liquid staking service that allows users to deposit assets like Ethereum. Solana, polygon, And other yields. Whenever a user bets on these assets, they will receive another bet version of the same token. It can be used elsewhere in the market.

Lido’s staking service has become very popular these days, and there are concerns that a large amount of Ethereum is currently concentrated in one staking pool.

Despite concerns about centralization, voting for this latest proposal has been very one-sided so far, with nearly 99.8% of the Lido community limiting the amount Ethereum Lido can serve. I’m casting a negative vote. Less than 0.2% of holders voted in favor of the proposal.

Voting is expected to end by July 1, 2022.

Lido and Ethereum upgrades

It can be said that these concerns arose just two months before Ethereum. merge event. ETH bet on Lido will be added to the Ethereum Beacon Chain. Proof of stake (PoS) The original blockchain version.

Continue merge At the event scheduled for August this year, all Ethereum will move to the Beacon chain and the long-awaited Ethereum 2.0 upgrade will begin.

Various validators are currently betting about 12.9 million Ethereum on the Ethereum Beacon chain.

Lido accounts for a whopping 31.80% of this total, or about 4,126 million ETH. Dune analysis..

After Lido, other large depositors are: Kraken (8.53%), Binance (6.77%), (3.02%), Stakefish (2.14%).

For the decentralized maximists, Lido’s dominance is a serious concern.

“”Speculative and controversial take: Price cuts by top stake pool providers need to be justified,“” Tweet Vitalik Buterin, co-creator of Ethereum. “”Like when the stake pool controls [more than] 15%, it should be accepted, Be expected To keep raising the commission rate until the pool drops below 15%.“”

Reveal concerns about centralization of Lido

According to Ethereum Foundation researcher Danny Lyon, Lido’s dominant staking position poses risks to the decentralized model of the network and can lead to attacks.

“Lido passing through 1/3 is a centralized attack on PoS,” he tweeted. “We are not good at assessing tail risk, but there are many risks to betting on Lido at these thresholds.”

“”Lido was started for two simple purposes. It is to democratize access to staking and prevent centralized exchanges from gaining the majority of staking Ethereum.“” Tweet Lido responds to allegations of potential centralized attacks. “”In short, it is to keep Ethereum decentralized.“”

Current Proof of work The (PoW) consensus model also has these threats. However, the need for high computational resources protects the network.

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