Addresses belonging to Lido and Coinbase controlled 46.15% of validator nodes adding blocks to the Ethereum blockchain hours after it transitioned to a full Proof-of-Stake (PoS) blockchain.
As part PoS, nodes that want to confirm the validity of blocks, as well as add blocks to the blockchain, are required to stake at least 32 $ETH (about $50,000) as collateral. According to Ethereum, PoS is more secure, less energy-intensive, and suited to the blockchain’s scaling plans compared to the older Proof-of-Work (PoW).
According to Santiment, the two addresses had a share of 28.97% and 16.18% of nodes validated post-merge, with the top 10 addresses in the list representing 65% of the total share of validating nodes.
📊 According to our #Ethereum Post Merge Inflation dashboard, 46.15% of the #proofofstake nodes for storing data, processing transactions, and adding new #blockchain blocks can be attributed to just two addresses. This heavy dominance by these addresses is something to watch. pic.twitter.com/KQdFNgGloD
— Santiment (@santimentfeed) September 15, 2022
A separate analysis before the Merge by Bitwise Asset Management showed that 5 addresses hold 64% of all staked $ETH, with Lido Finance alone holding 30.8% while Coinbase, Kraken and Binance hold 30% between them. On the whole, staking as a service (STaaS) platforms hold more than 50% of all staked $ETH and is one of the fastest growing sectors, according to Bitwise.
The table below shows the leading Ethereum STaaS providers, including their current APY on staked $ETH, the fees they charge, & their relative market share.
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STaaS providers take several forms, from DeFi apps, like Lido, to companies that trade on the NASDAQ, like Coinbase.
The table below shows the leading Ethereum STaaS providers, including their current APY on staked ETH, the fees they charge, & their relative market share. pic.twitter.com/HXlgcibg7J
— Ryan Rasmussen (@RasterlyRock) September 16, 2022
Critics of PoS point to the fact that the consensus model leads to centralization since validators are weighed based on the amounts of $ETH they have at stake. At the same time, Ethereum PoS makes Ethereum energy-efficient, reducing energy use by as much as 99% compared to PoS where miners are weighted based on the amount of computing power they can supply to mine blocks.
However, it is still early days in Ethereum’s transition and the diversity of stakers is expected to evolve over time.
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