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.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| 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 |
