Coinbase Surges as a Major ETH Staking Player
In recent crypto developments, Coinbase, a prominent cryptocurrency exchange, has solidified its position as the second-largest ETH staking entity. This revelation comes amidst mounting concerns about the growing dominance of Lido in the ETH staking landscape.
Coinbase’s Impressive 14.1% ETH Staking Share
As reported by Chinese journalist Colin Wu, a study conducted by Dragonfly data scientist Hildobby, utilizing data from Dune Analytics, discloses that Coinbase currently boasts a substantial 3.873 million staked ETH. This constitutes a remarkable 14.1% of the total staked ETH in the market.
Coinbase’s ascent in the ETH staking arena is second only to the liquid staking platform, Lido DAO, which commands a staggering one-third of all staked ETH.
Competitors in the ETH Staking Arena
Other platforms also hold notable stakes in the ETH staking sector. The Binance and Kraken exchanges, for instance, have a respective market share of 4.2% and 3.0%. Meanwhile, the Figment staking pool secures the third position with a 4.9% market dominance.
It’s worth noting that Coinbase has experienced a remarkable 44% surge in ETH staking activity over the past six months. This surge coincides with the period in which the Ethereum Shanghai upgrade has been in effect.
Ethereum Shanghai Upgrade Boosts Confidence
Contrary to fears that the recent Ethereum network upgrade might lead to a decline in staked ETH due to the ability to withdraw staked assets, the Shanghai upgrade has bolstered stakers’ confidence. This boost has resulted in a net positive inflow of 7.84 million ETH since the upgrade’s implementation in April.
Currently, the total amount of staked ETH stands at an impressive 27.42 million ETH, accounting for 22.81% of ETH’s circulating supply.
Lido’s Expanding Dominance Raises Red Flags
In a separate development, concerns have arisen within the crypto community regarding centralization concerns stemming from Lido’s dominance in ETH staking. In the Proof-of-Stake Consensus model, a higher quantity of staked ETH equates to greater voting power in governance processes.
Data from Dune Analytics indicates that Lido holds a substantial 8.80 million staked ETH, amounting to 32.11% of the ETH staking market. Notably, the liquid staking platform has witnessed a significant 55% increase in staking activity over the past six months.
Centralization Worries and Speculations
Ethereum’s official blog acknowledges the validity of concerns regarding centralization. A validator controlling at least 33% of staked ETH could potentially prevent the network from finalizing any block, even if a 66% majority exists.
Furthermore, should a validator acquire 55% of the staked ETH, they could theoretically create a fork in the Ethereum chain. However, it’s essential to emphasize that these concerns are speculative, and there is currently no evidence suggesting malicious intentions on the part of Lido DAO towards the Ethereum network.
ETH’s Current Market Performance
At the time of writing, ETH is trading at $1,620.18, reflecting a 1.36% decline over the past day, according to data from CoinMarketCap. Additionally, the token’s daily trading volume has decreased by 36.41%, amounting to $2.86 billion.
As the crypto market continues to evolve, Coinbase’s increasing prominence in ETH staking and Lido’s expanding dominance are topics that will undoubtedly warrant close attention and ongoing analysis.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. Cryptocurrency investments carry inherent risks, and readers are advised to conduct their research and exercise caution when making investment decisions.
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