The proposal presumably aims to address concerns of Ethereum staking becoming growingly centralized
At least five Ethereum liquid staking providers have either imposed or are preparing to impose a self-limit rule in which they promise not to own over 22 per cent of the Ethereum staking market — seen as a move to make sure the Ethereum network remains decentralized.
Among the Ethereum staking providers either already committed or preparing to commit to the self-limit rule include Rocket Pool, StakeWise, Stader Labs and Diva Staking, according to Ethereum core developer Superphiz.
Puffer Finance, another liquid staking service, also declared its commitment to the self-limit.
The proposal presumably aims to address concerns of Ethereum staking becoming growingly centralized.
As to why the self-limit was proposed at 22 per cent, Superphiz stated that as 66 per cent of validators need to agree on the state of Ethereum, setting the limit below 22 per cent means no less than four major entities must collude in order for the chain to reach finalization.
Finality is the point where transactions on a blockchain are considered immutable, presumably ensuring that transactions within a block cannot be changed.
The concept was proposed by Superphiz in May 2022 when he questioned whether a staking pool would be prepared to put the health of the chain before its own profits.
Interestingly, the biggest Ethereum liquid staking provider, Lido Finance, voted by a 99.81 per cent majority not to self-limit back in June.
They have expressed an intention to control most of the validators on the beacon chain, Superphiz stated in a post August 31.
Lido presently dominates the Ethereum staking market, accounting 32.4 per cent of all staked Ether, while the next entity, Coinbase, accounts for just 8.7 per cent of the market, as per data from Dune Analytics.
