Ethereum Staking Protocol Lido’s staking advantage can put the entire blockchain at risk of a concentrated attack when it ultimately becomes evidence of a stake network. paper Danny Lyon, a researcher at the Ethereum Foundation, claimed.
An article entitled Risks of LSD (Liquid Stakeing Derivatives) recommends setting threshold limits for all Ether stackers, and investors limit their exposure to the protocol due to the inherent risks of concentration. I warn you that you need to.
According to the article, if an entity needs to take control of a distributed ledger, it can be relieved by recording blocks.
“Lido passing 1/3 is a centralized attack on PoS. We are not good at assessing tail risk, but there are many risks to betting on Lido at these thresholds.”
Lido developers disagree
However, not everyone agrees with the staking entity’s request to limit their exposure. Vasiliy Shapovalov, the developer of Lido, argued that there was a protocol to decentralize Ether Staking so that centralized exchanges do not dominate the scene.
According to the Lido website, we are using 21 validators. This kind of transparency is not provided by most centralized exchanges.
Will Hawthorn, the founder of DeversiFi DEX, also disagrees. He believes that Lido’s restrictions on Etherstaking do not necessarily mean that other projects will grow.
“I think it’s too early to impose self-limits,” said Alex Svanevik, CEO of blockchain analytics platform Nansen. Svanevik, who is also a member of Lido DAO, added:
“It’s easy to imagine a more centralized or more malicious entity without having to race self-limited across Lido.”
Today, Lido is the largest provider of Ethereum staking services.Some centralized exchanges like Kraken, CoinbaseWhen Binance Lido also offers this service, betting 32% of the total tokens.
Data from Dune analysis Lido has 90.8% of the ETH2 liquid staking balance, indicating that more than 4 million ETHs are stakes. The next line, Rocket Pool, is betting only 183,040 ETH.
