The Ethereum network has seen a rise in staking since major network upgrades, Merge and Shanghai, but this has come at the cost of higher centralization and lower staking yields, according to a new report by JPMorgan. The top five liquid staking providers — including Lido, Coinbase, Figment, Binance and Kraken — control more than 50% of staking on the Ethereum network, with Lido alone accounting for almost one-third.The decentralized liquid staking platform Lido is seen as a better alternative to centralized staking platforms, associated with centralized exchanges like Coinbase or Binance. However, the JPMorgan report noted that even decentralized liquid staking platforms involve a high degree of centralization, with a single Lido node operator accounting for more than 7,000 validator sets, or 230,000 ETH. The report also mentioned a case when Lido’s DAO rejected a proposal to cap the staking share at 22% of Ethereum’s overall staking to avoid centralization.Apart from higher centralization, post-Merge Ethereum is also associated with an overall staking yield decline. The standard block rewards declined from 4.3% before the Shanghai upgrade to 3.5% currently, and the total staking yield has declined from 7.3% before the Shanghai upgrade to around 5.5% currently. Ethereum co-founder Vitalik Buterin has admitted that node centralization is one of Ethereum’s main challenges, and finding a perfect solution to handle this problem may take another 20 years.

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Information	Details
Geography	Global
Countries
Sentiment	negative
Relevance Score	8
People	Vitalik Buterin, Nikolaos Panigirtzoglou
Companies	Ethereum, Figment, Chainalysis., Coinbase, Kraken, Binance, Decentralized Autonomous Organization (DAO), Lido
Currencies	BUSD, Lido Staked Ether, Ethereum, Bitcoin, Coinbase Wrapped Staked ETH
Securities	None