Posted 10/6/2023, 7:17:00 AM
Ethereum Centralization Risks Grow Despite Efforts to Decentralize
- Ethereum has become more centralized since Merge and Shanghai upgrades due to rise in ETH staking
- Lido has added node operators to address centralization concerns, but risks remain
- Centralization creates single point of failure risk and opportunities for attacks or collusion
- Rise of liquid staking also risks rehypothecation and liquidation cascades if assets drop in value
- Increased staking has reduced ETH's yield appeal compared to rising traditional asset yields