Lido Alarm don dey Ring
Pidgin Parlour Fams, how una dey?
After di heavy regulatory attacks wey happen dis month, e fi dey hard to focus on other major threats to crypto. But today, we dey reason Lido centralization concerns, and di lawsuits wey happen against CEXs recently fi make di mata worse.
For months, strong Ethereum decentralization supporters and small-time LSD bag holders don wait patiently for wetin crypto analysts believe say go happen: pipu go waka comot from Lido.
Some pipu bin think say as dem allow pipu commot dia money during di Shapella upgrade, e go help decentralize ether stake. But as e be, reality no gree follow dis tori, and now, as Lido don mature well-well, e don almost control 1/3 of di staked ether, di alarms don dey ring for Ethereum community.
Today, we go yarn why SEC attack on exchange staking go even benefit Lido pass, we go show why Lido's success story dey continue by imself, and we go explain why e important to scatter Lido's stake centralization now.
👮 SEC Push
Just recently, SEC bin face Binance and Coinbase. Di accusations against dis two exchanges get different levels, but one thing dey common for di complaints: SEC dey target di staking services wey dis two CEXs dey offer to dia American users.
Binance and Coinbase dey control 15.3% of all ETH wey dem don stake for di Beacon Chain through staking products wey dey compete well with di ones wey Lido dey offer.
Even tho SEC complaints no target Ethereum staking solutions for now, di agency don show say dem fi go after Ethereum staking.
For February, Kraken bin dey forced to stop dia Ethereum staking services for U.S. users as part of di settlement wey dem reach with SEC, and Chair Gensler talk say "everybody for dis market need to dey alert."
If SEC continue to crack down on staking, di way things go be na say di deposits go dey more centralized, and Lido fi even capture bigger market share for ETH staking.
🔮Limitless Prophecy
Even tho pipu fi comot dia moni, Lido still dey control Ethereum staking well-well. Dem don increase di deposits by almost 900k ETH (14.3%) dis month, even after Shapella. Lido market share don increase from 31.4% to 31.6%, and e show say di protocol don turn dia past success into something wey go continue to dey dominant for di future.
Lido dey enjoy dis advantages based on di better quality of dia ETH staking derivative and base on say dem dey offer lower fees pass dia competitors.
Token Advantages
People wey hold stETH dey benefit from di token's plenti liquidity, na dis one make am one of di few viable liquid staking options for big investors (whales). Di token also dey integrate well with collateral for DeFi, and dis one dey increase di different ways wey di token fi dey used.
Because stETH get some unique qualities wey dey make am attractive pass your normal LSD, capital (especially di one wey sophisticated investors dey look for) go continue to enter di token. Dis one go further cement di qualities wey make Lido's staking derivative better pass others.
Fees Structure
Currently, Lido dey offer di lowest fees compared to other top staking providers, and because of dis, pipu dey get financial incentives to stake with Lido!
As Lido dey reduce dia share of staking rewards and maintain lower fees pass dia competitors, di gap between Lido and other providers go continue to increase. Dis one go attract more stakers to Lido as dem see am as a highly profitable staking opportunity.
We fi draw clear similarities between Lido and TradFi world. Vanguard bin disrupt di investment world for di 1980s as dem dey offer low-cost passive indexing services, and dem dey constantly reduce dia fees to beat competitors. Dem don maintain dia position for almost half a century. Lido dey follow similar strategy for dia own playbook!
⚔️ Disrupt Lido
Lido governance don show say dem no really dey concerned about di danger wey dia increasing stake accumulation dey pose. Dem bin vote against limiting deposits for June 2022.
Even tho e look like say limiting deposits go dey against di best interests of LDO token holders and say e fi affect Lido's profitability, e dey clear say if dem no limit am, di consequences dey very real.
Support dey increase among Etherians to control Lido, with some pipu wey dey argue say if dem no go limit demselves, di community fi forcefully take action to address di situation. Even tho dis dey raise concerns, e no dey likely say we go see such controls implemented for di base layer because e go need hard fork, and dis one fi cause division for di fragile social consensus layer of Ethereum and fi lead to unwanted chain split.
Lido community suppose dey concerned about di possibility say dia stake centralization go reduce future demand for Ethereum blockspace.
Di protocol dey approach di first of three important thresholds wey fi reduce di core properties wey make Ethereum valuable. If Lido continue to dey grow without control, e go eventually pass dis thresholds and e go bring risk to di entire ecosystem.
For di bull markets wey don happen for previous cycles, di talk about decentralization and resistance to censorship no too dey important compared to di current trends wey dey hot.
No time better pass bear market to protect di foundation wey make Ethereum network strong. If nobody make serious effort to scatter Lido's control, e dey likely say di staking provider go continue to dey grow and control more market share.
So, how you fi dey involved?
Thankfully, crypto fights dey happen for di small-small areas, and you no need to be a big investor (whale) to participate for di decentralization of staked ETH.
To begin, no stake your money with Lido.
Consider staking your money with Swell📝 and try to qualify for di SWELL airdrop wey go happen later dis year. You fi set up your own Rocket Pool📝 minipool with as small as 8 ETH, and dis one go give you better profits as you collect commission on di Ether wey pipu stake for your node, or you fi deposit your Ether LSDs for unshETH to boost your rewards with token incentives. If you sabi di technical side well, you fi try run your own validator.
No matter how you do am, if you move your stake commot from Lido, e go help for dis fight against centralization. But di power of moni alone no go stop Lido to continue to dey dominate; na di time to take inspiration from activists playbook and make your voice loud!
Proverb of di day
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