Ethereum staking services agree to 22% limit of all validators <div class=\"post__block post__block_lead-text\" data-v-2649fa34><p itemprop=\"description\" class=\"post__lead\" data-v-2649fa34> The 22% self-limit rule ensures at least four major staking entities would need to collude in order for the chain to reach finalization.  </p></div><div class=\"post-cover post__block\" data-v-2649fa34><div class=\"post-cover__wrp\"><div class=\"lazy-image post-cover__image lazy-image_immediate\"><span class=\"pending lazy-image__pending pending_dark\"><span class=\"pending__runner\"></span></span><picture><source media=\"(min-width: 1200px)\" srcset=\"https://images.cointelegraph.com/images/717_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 1x, https://images.cointelegraph.com/images/1434_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 2x\"><source media=\"(min-width: 992px)\" srcset=\"https://images.cointelegraph.com/images/587_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 1x, https://images.cointelegraph.com/images/1174_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 2x\"><source media=\"(min-width: 768px)\" srcset=\"https://images.cointelegraph.com/images/638_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 1x, https://images.cointelegraph.com/images/1276_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 2x\"><source media=\"(min-width: 480px)\" srcset=\"https://images.cointelegraph.com/images/747_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 1x, https://images.cointelegraph.com/images/1494_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 2x\"><img srcset=\"https://images.cointelegraph.com/images/480_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 1x, https://images.cointelegraph.com/images/960_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg 2x\" src=\"https://images.cointelegraph.com/images/1434_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDkvNDJjZTg3NGQtYWU1Yy00M2UwLTllNWQtMDExOGVhZThhYTdiLmpwZw==.jpg\" alt=\"Ethereum staking services agree to 22% limit of all validators\" class=\"lazy-image__img type:primaryImage\"></picture><!----></div><span hidden=\"hidden\" class=\"post-cover__badge\"> News </span></div><!----></div><!----><!----><div class=\"post__socials-block post-socials_EpBtt\" data-v-2649fa34><h3 class=\"post-socials__title_WEFcI\">Join us on social networks</h3></div><div class=\"post__content-wrapper\" data-v-2649fa34><!----><div class=\"post-content\" data-v-2649fa34><p>At least five Ethereum liquid staking providers have either imposed or are working to impose a self-limit rule in which they promise not to own more than 22% of the Ethereum staking market — seen as a move to ensure the Ethereum network remains decentralized.</p><p>Among the Ethereum staking providers either already committed or are working to commit to the self-limit rule include <a href=\"https://twitter.com/langerstwit/status/1525343792772939777\" target=\"_blank\" rel=\"noopener nofollow\">Rocket Pool</a>, <a href=\"https://twitter.com/stakewise_io/status/1525225299146944513\" target=\"_blank\" rel=\"noopener nofollow\">StakeWise,</a> <a href=\"https://www.staderlabs.com/blogs/ethereum/staders-ethx-power-pledge/\" target=\"_blank\" rel=\"noopener nofollow\">Stader Labs</a> and <a href=\"https://t.co/yWG0DyUCNN\" target=\"_blank\" rel=\"noopener nofollow\">Diva Staking</a>, according to Ethereum core developer Superphiz. </p><p>Puffer Finance, another liquid staking service, also <a href=\"https://twitter.com/puffer_finance/status/1675942120157491201\" target=\"_blank\" rel=\"noopener nofollow\">announced</a> its commitment to the self-limit. </p><blockquote class=\"twitter-tweet\"><p lang=\"en\" dir=\"ltr\">These providers are committed (or are in the process of committing) to self-limit to @Rocket_Pool <a href=\"https://twitter.com/stakewise_io?ref_src=twsrc%5Etfw\">@stakewise_io</a> <a href=\"https://twitter.com/staderlabs?ref_src=twsrc%5Etfw\">@staderlabs</a> <a href=\"https://twitter.com/divastaking?ref_src=twsrc%5Etfw\">@divastaking</a></p>— superphiz.eth ️ (@superphiz) <a href=\"https://twitter.com/superphiz/status/1697035864793071887?ref_src=twsrc%5Etfw\">August 30, 2023</a></blockquote>\n\n<p>The proposal presumably aims to address concerns of Ethereum staking <a href=\"https://cointelegraph.com/news/how-liquid-staking-can-potentially-harm-the-ethereum-ecosystem-hashkey-report\" data-amp=\"https://cointelegraph-com.cdn.ampproject.org/c/s/cointelegraph.com/news/how-liquid-staking-can-potentially-harm-the-ethereum-ecosystem-hashkey-report/amp\">becoming increasingly centralized. </a></p><p>As to why the self-limit was proposed at 22%, Superphiz <a href=\"https://twitter.com/superphiz/status/1697149459769999860\" target=\"_blank\" rel=\"noopener nofollow\">explained</a> that because 66% of validators need to agree on the state of Ethereum, setting the limit below 22% means at least four major entities must collude in order for the chain to reach finalization. </p><p>Finality is the point where transactions on a blockchain are considered immutable, supposedly ensuring that transactions within a block cannot be altered.</p><p>The idea was <a href=\"https://twitter.com/superphiz/status/1525218193756807169\" target=\"_blank\" rel=\"noopener nofollow\">proposed</a> by Superphiz in May 2022 when he questioned whether a staking pool would be willing to put the health of the chain before its own profits.</p><p>Interestingly, the largest <a href=\"https://cointelegraph.com/news/lido-finance-activates-staking-rate-limit-after-more-than-150-000-eth-staked\" data-amp=\"https://cointelegraph-com.cdn.ampproject.org/c/s/cointelegraph.com/news/lido-finance-activates-staking-rate-limit-after-more-than-150-000-eth-staked/amp\">Ethereum liquid staking provider, Lido Finance,</a> <a href=\"https://snapshot.org/#/lido-snapshot.eth/proposal/0x10abedcc563b66b1adee60825e78c387105110fa4a1e7354ab57bc9cc1e675c2\" target=\"_blank\" rel=\"noopener nofollow\">voted</a> by a 99.81% majority not to self-limit back in June.</p><p>“They have expressed an intention to control the majority of validators on the beacon chain,” Superphiz <a href=\"https://twitter.com/superphiz/status/1697038218892378136?s=20\" target=\"_blank\" rel=\"noopener nofollow\">said</a> in an Aug. 31 post.</p><figure><img src=\"https://s3.cointelegraph.com/uploads/2023-09/1bb705ec-bfe6-4dee-b430-7b59243b403f.png\"><figcaption>Votes casted from Lido (LDO) token holders on the self-limiting proposal. Source: Snapshot</figcaption></figure><p>Lido currently dominates the <a href=\"https://cointelegraph.com/innovation-circle/the-next-big-leap-for-ethereum-liquid-staking-the-staking-landscape\">Ethereum staking market,</a> accounting 32.4% of all staked Ether, while the next entity, Coinbase, accounts for only 8.7% of the market, <a href=\"https://dune.com/hildobby/eth2-staking\" target=\"_blank\" rel=\"noopener nofollow\">according</a> to data from Dune Analytics.</p><figure><img src=\"https://s3.cointelegraph.com/uploads/2023-09/ec017275-f78b-498e-9e7d-8aa84c73808e.png\"><figcaption><em>Ethereum stakers by staking amount and market share, showing that Lido is the only one above the 22% threshold. Source: Dune Analytics</em></figcaption></figure><h3>Who’s in the right? Mixed reactions from the Ethereum community </h3><p>One industry pundit, “Mippo,” <a href=\"https://twitter.com/MikeIppolito_/status/1697284080453165264\" target=\"_blank\" rel=\"noopener nofollow\">explained</a> on Aug. 31 that the self-limit proposal has nothing to do with “Ethereum alignment” — a principle understood to enable credible neutrality and permissionless innovation on Ethereum.</p><p>Mippo claimed those trying to push the proposal wouldn’t make way if they were in Lido’s position.</p><p><strong><em>Related: </em></strong><a href=\"https://cointelegraph.com/news/ethereum-crushed-liquid-staking-tokens\" data-amp=\"https://cointelegraph-com.cdn.ampproject.org/c/s/cointelegraph.com/news/ethereum-crushed-liquid-staking-tokens/amp\"><strong><em>Ethereum is about to get crushed by liquid staking tokens</em></strong></a></p><p>“Everyone is doing the economically selfish and rational thing here,” Mippo concluded.</p><blockquote class=\"twitter-tweet\"><p lang=\"en\" dir=\"ltr\">Yeah because they have way less market share than that now… easy to chirp from the cheap seats.</p><p>This has nothing to do with “Ethereum alignment.” None of these teams would self limit were they in Lido’s place.</p><p>Everyone is doing the economically selfish and rational thing…</p>— Mippo  (@MikeIppolito_) <a href=\"https://twitter.com/MikeIppolito_/status/1697284080453165264?ref_src=twsrc%5Etfw\">August 31, 2023</a></blockquote>\n\n<p>“Folks in the ETH community should not shame more user-friendly solutions as greedy products,” <a href=\"https://twitter.com/DaftaryNeel/status/1697273447414706488\" target=\"_blank\" rel=\"noopener nofollow\">said</a> another observer.</p><p>However, others were more wary of <a href=\"https://cointelegraph.com/news/lido-rocket-pool-team-members-argue-over-decentralization\" data-amp=\"https://cointelegraph-com.cdn.ampproject.org/c/s/cointelegraph.com/news/lido-rocket-pool-team-members-argue-over-decentralization/amp\">the potential centralization</a> issues at hand, <a href=\"https://twitter.com/fulldividends/status/1697381772332286161\" target=\"_blank\" rel=\"noopener nofollow\">describing</a> Lido’s market share dominance as “disgusting and selfish.”</p><p><strong><em>Magazine: </em></strong><a href=\"https://cointelegraph.com/magazine/ethereum-is-woefully-undervalued-but-growing-more-powerful-defi-dad-hall-of-flame/\"><strong><em>DeFi Dad, Hall of Flame: Ethereum is ‘woefully undervalued’ but growing more powerful</em></strong></a></p><template data-name=\"subscription_form\" data-type=\"crypto_biz\"></template>\n\n\n\n</div><!----><!----><div class=\"reactions_3eiuR\" data-v-2649fa34><button class=\"reactions--button_NhAhG\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M21 3V0.5C21 0.223858 20.7761 0 20.5 0H19.5C19.2239 0 19 0.223858 19 0.5V3H16.5C16.2239 3 16 3.22386 16 3.5V4.5C16 4.77614 16.2239 5 16.5 5H19V7.5C19 7.77614 19.2239 8 19.5 8H20.5C20.7761 8 21 7.77614 21 7.5V5H23.5C23.7761 5 24 4.77614 24 4.5V3.5C24 3.22386 23.7761 3 23.5 3H21Z\" fill=\"black\" /><path d=\"M21 12C21 16.9706 16.9706 21 12 21C7.02944 21 3 16.9706 3 12C3 7.02944 7.02944 3 12 3C12.5491 3 13.0868 3.04918 13.6088 3.14338C13.8386 3.18485 14 3.38876 14 3.62227V4.6194C14 4.95387 13.6774 5.194 13.3492 5.1299C12.9126 5.04466 12.4615 5 12 5C8.13401 5 5 8.13401 5 12C5 15.866 8.13401 19 12 19C15.866 19 19 15.866 19 12C19 11.5385 18.9553 11.0874 18.8701 10.6508C18.806 10.3226 19.0461 10 19.3806 10H20.3777C20.6112 10 20.8151 10.1614 20.8566 10.3912C20.9508 10.9132 21 11.4509 21 12Z\" fill=\"black\" /><path d=\"M8.5 12C9.32843 12 10 11.3284 10 10.5C10 9.67157 9.32843 9 8.5 9C7.67157 9 7 9.67157 7 10.5C7 11.3284 7.67157 12 8.5 12Z\" fill=\"black\" /><path d=\"M12 14.9998C11.0428 14.9998 10.3956 14.6246 9.97685 14.2525C8.54647 12.981 7.2289 14.4858 8.64815 15.7473C9.35444 16.3751 10.4572 16.9998 12 16.9998C13.5428 16.9998 14.6456 16.3751 15.3519 15.7473C16.7737 14.4835 15.4635 12.9722 14.0231 14.2525C13.6044 14.6246 12.9572 14.9998 12 14.9998Z\" fill=\"black\" /><path d=\"M17 10.5C17 11.3284 16.3284 12 15.5 12C14.6716 12 14 11.3284 14 10.5C14 9.67157 14.6716 9 15.5 9C16.3284 9 17 9.67157 17 10.5Z\" fill=\"black\" /></svg><p class=\"reactions--button-text_N11-8\"> Add reaction </p></button><!----></div><!----><!----></div><p><strong><a href=\"https://blockads.fivefilters.org\">Adblock test</a></strong> <a href=\"https://blockads.fivefilters.org/acceptable.html\">(Why?)</a></p>