Lido Finance, Ethereum's largest staking protocol, has nearly 10 million ETH in deposits and commands a majority share of the Ethereum staking market. There have been long-standing concerns about lido dominance in the staking space, which could lead to centralization of power. But the good thing is that Lido's market share has dropped to less than 30% amidst the recent increase in liquid restaking protocols on Ethereum.
Lido’s staking share in Ethereum
According to Ethereum contributor Anthony Sasson, there has been a noticeable change in Lido’s market share of staked ETH, which currently sits at less than 30%. He emphasizes that Puffer's large-scale vampire attack will have an immediate impact, which he estimates will exceed $1 billion.
Sasson highlights a long-standing proposal to reduce Lido's growth and market share by increasing competition in the staking space. He believes that increased competition has made the Ethereum staking ecosystem stronger than ever. Sasson expects the staking ecosystem to become more decentralized over time.
Sasson further added that this discussion can only happen if there is an active free market for Ethereum staking initiatives, rather than a few projects controlling the majority of market share. “Lido is not 'bad', but it's not the best we think it can be, and in any case no single company should have a disproportionately large market share,” he said. Stated.
Challenging market dominance
Last September 2023, Evan Van Ness expressed concern about Lido’s growing dominance in the Ethereum staking sector. At the time, Lido's market share stood at 33%, reaching a critical threshold where a single entity could manipulate the operations of the entire Ethereum network.
Staking ETH via Lido not only allows you to profit from your participation in the network, but also provides users with a liquidity derivative of locked ETH, enabling them to engage in various decentralized finance (DeFi) endeavors. Become.
After implementing the Shappera upgrade last year, the platform saw increased deposits and ETH withdrawals, resulting in an expanded market presence. The emergence of liquid re-staking platforms such as Ether.fi poses some challenges to this dominance.
