Rise of Ethereum staking came at cost of higher centralization: JPMorgan

The increase of Ethereum staking given that significant network upgrades, Merge and Shanghai, has actually come at the expense of higher centralization and lower staking yields, a brand-new report by JPMorgan said.JPMorgans experts led by senior managing director Nikolaos Panigirtzoglou issued a new financier note on Oct. 5, warning about the dangers stemming from Ethereums growing centralization.Market share of leading five liquid staking companies. Source: JPMorganTop 5 liquid staking providers– consisting of Lido, Coinbase, Figment, Binance and Kraken– manage more than 50% of staking on the Ethereum network, JPMorgan experts noted in the report, adding that Lido alone accounts for practically one-third. The report pointed out a case when Lidos DAO turned down a proposal to cap the staking share at 22% of Ethereums overall staking to avoid centralization.

Ethereum co-founder Vitalik Buterin has admitted that node centralization is among Ethereums main obstacles. In September 2023, he said that discovering a perfect solution to manage this problem might take another 20 years.Magazine: Blockchain detectives– Mt. Gox collapse saw birth of Chainalysis