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Ethereum Staking Providers Reach Consensus on Self-Imposed Limit to Maintain Network Decentralization
Five Ethereum liquid staking providers have either implemented or are preparing to adopt a self-imposed cap, committing to not exceed 22% of the ETH staking market. This initiative is designed to protect the decentralization of the Ethereum network.
As stated by Ethereum core developer Superphiz, the staking providers Rocket Pool, StakeWise, Stader Labs, and Diva Staking have either already embraced or are in the process of pursuing this self-imposed restriction.
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- Superphiz was the initial proponent of this concept in May of the previous year, questioning whether a staking pool would prioritize the integrity of the blockchain over its own financial interests.
- Regarding the reasoning behind the 22% self-imposed threshold, Superphiz explained that this number was selected because Ethereum necessitates a consensus of 66% of validators to agree on the state of the network.
- Establishing the limit below 22% would guarantee that at least four major entities would need to collaborate for the chain to reach finalization.
- Several additional platforms have committed to a self-limit strategy, including the Stafi Protocol, which tweeted,
“In our continuous commitment to Ethereum’s decentralized ethos, StaFi intends to self-limit to 22% of all validators to ensure maximal Ethereum alignment.”
- Another liquid staking service, Puffer Finance, has also joined this initiative.
- Lido Finance’s significant presence in the Ethereum staking market has raised numerous concerns regarding centralization; however, the staking provider opted against self-limiting, with an overwhelming majority of 99.81% voting against it.
- Currently, Lido commands a considerable share of 32.4% of all staked Ether, based on data gathered by Dune Analytics.
- In comparison, Coinbase holds a notably smaller share of just 8.7% of the market, while Binance follows with 4.52%.
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