The surge in Ethereum stakers has prompted a decrease in Lido’s market share, dropping from 32% in December 2023 to 29.57% currently. This decline has alleviated concerns surrounding Lido’s dominance in the ecosystem.
Lido’s dominance in ETH staking, combined with limited competition, allowed it to command a significant portion of the market. However, community apprehension grew due to the potential influence of any entity holding over 33% of the market share on the Ethereum chain.
According to data from Dune, as of April 4, Lido’s market share in staked ETH has fallen below the 30% mark.
Crypto exchanges like Coinbase and Binance, along with Ethereum staking platform Kiln, play significant roles in ETH staking, holding 14.04%, 3.75%, and 3.5%, respectively.
Surprisingly, an unidentified entity occupies the second-largest share at 16.9%. Among the 26 known entities, Kraken, Bitcoin Suisse, OKX, and Upbit also contribute, with shares ranging from 1.1% to 2.4%.
Vitalik Buterin, Ethereum’s co-founder, advocates for stake pools to cap their control at 15% and adjust fees accordingly to maintain this threshold.
The Lido decentralized autonomous organization (DAO) community attempted to address the issue of Ethereum (ETH) staking dominance by proposing a hard limit in May 2022. However, the proposal was rejected by the DAO with a 99.81% vote in June 2022.
The intensifying competition among Ethereum (ETH) staking service providers is anticipated to significantly contribute to the continued decentralization of the staking ecosystem.
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