Ethereum Taken Over by a 'Cartel' (?)

Article source, here.

TL;DR

• If you want to get paid to process transactions on the Ethereum network, you need to deposit (stake) 32 ETH (~$60k) and have a bunch of specific hardware/tech know-how.

• LSDs let folks skip all that by setting up the hardware and getting everything working - then let others contribute any amount of ETH to their staking pools, earning ~4% p/y.

• Here's where the 'cartel' part comes into the story: there's one company (Lido) that makes up 74% of the liquid staking market!

• This centralization opens Ethereum up to regulatory scrutiny.

• The solution? Make solo staking easier. Lower the 32 ETH barrier, and make the set up process idiot proof.

Full Story

You know  that episode  of Community, where Abed gets a job at the cafeteria so he and his friends can get first dibs on chicken fingers?

Yeah, well, there's a worry that something similar is happening with Ethereum.

Specifically with liquid staking derivatives (LSDs) - and before you scroll away - it's not as complex as the name suggests!

Basically, if you want to get paid to process transactions on the Ethereum network, you need to deposit (stake) a minimum of 32 ETH (~$60k) and have a bunch of specific hardware / tech know-how to get started.

Then, you can start processing transactions / earning - and the more ETH you stake, the more you earn per year.

LSDs let folks skip all that noise.

They set up all the hardware and get everything working - then let others contribute any amount of ETH to their staking pools, where they earn ~4% return per year.

Here's where the 'cartel' part comes into the story:

There's one company (Lido) that makes up 74% of the liquid staking market!

That's a dominant position that would be celebrated in most circles of business, but in crypto it's a big worry.

Because if Lido were to be hit with lawsuits from government bodies, saying they need to stop processing certain transactions for certain people - then crypto starts to look a lot like the banking system.

But here's the real problem:

You know who else doesn't like centralization in the cryptocurrency space? The US government.

Cryptocurrencies that can't prove themselves to be sufficiently decentralized have a high likelihood of being regulated into oblivion. Not good.

The solution?

People much smarter us are suggesting this:

Make solo staking easier. Lower the 32 ETH barrier, and make the set up process idiot proof.

Sounds good to us.