A group of Ethereum staking service providers have agreed to a self-imposed limit which would restrict the amount of the staking market they control.
Superphiz, a member of the Ethereum staking community, said in an Aug. 31 post on X that RocketPool, Stakewise, Stader Labs and Diva Staking were all in the process of committing to an agreed-upon limit to not own more than 22% of all Ethereum validators.
These providers are committed (or are in the process of committing) to self-limit to <22% of Ethereum validators. This is how our chain will be successful: Coordination above greed. Cooperation instead of winner-take-all.@Rocket_Pool @stakewise_io @staderlabs @divastaking
— superphiz.eth 🦇🔊🛡️ (@superphiz) August 30, 2023
The limit was determined because finalization requires 66% of validators to agree on the chain, meaning that at least four entities would need to collude to finalize a rogue chain under the proposed 22% self-limit, he explained. Finalization refers to the state of the blockchain which guarantees transactions within a block cannot be altered.
“This is a low bar, but a good start,” Superphiz said, adding that the first step was to make sure a staking service did not gain control of 33% of validators.
In the event that it happens, he noted that they would essentially have the power to prevent finalization if they chose, and even resist a forced slash by the network.
Some users pointed out that verbal commitments such as this one were easy to make when the likelihood of one staking service provider reaching 22% of market share was fairly low.
Verbal commitments from some of these solutions will melt away as quickly too – if & when they do reach the 22% threshold.
Network security should not be based on such commitments in the first place
— Neel Daftary 🦇🔊 (@DaftaryNeel) August 31, 2023
Others highlighted that Lido already controls 32.4% of the staking market, with the amount of ETH staked through the platform amounting to over 22% of the cryptocurrency’s supply. Interestingly, 99.8% of the Lido community voted against imposing a self-limit on its share of the staking market in June.