Prominent Crypto Exchange Coinbase Emerges as Second Largest ETH Staking Entity
A recent report by Chinese reporter Colin Wu reveals that Coinbase, a leading crypto exchange, has become the second largest entity in the Ethereum (ETH) staking market. According to data from Dune analytics, Coinbase currently holds 3.873 million staked ETH, which accounts for 14.1% of all staked ETH. The only platform surpassing Coinbase in terms of dominance is Lido DAO, a liquid staking platform, which holds one-third of all staked ETH. Other significant players in the market include Binance and Kraken exchanges with 4.2% and 3.0% market shares respectively, while Figment staking pool comes in third with a 4.9% market dominance.
Coinbase’s Growing Influence
Coinbase has experienced a substantial increase of 44% in ETH staking activity over the past six months. Interestingly, this growth aligns with the period during which the Ethereum Shanghai upgrade has been active. Despite concerns that the upgrade might lead to a decline in staked ETH due to the ability to withdraw assets, it has actually bolstered confidence among stakers resulting in a net positive flow of 7.84 million ETH since April.
Concerns about Centralization
While Lido DAO’s dominance in the ETH staking market is notable, there are growing concerns about centralization. As per Ethereum’s official blog, higher amounts of staked ETH translate to greater voting power during governance processes under the Proof-of-Stake Consensus model. With Lido holding 8.80 million staked ETH, accounting for 32.11% of the market, worries about centralization are valid. If any validator controls at least 33% of staked ETH, they can prevent the network from finalizing blocks even with a 66% majority. Furthermore, a validator with 55% staked ETH could potentially split the Ethereum chain into two forks.
Current Market Status
As of now, ETH is trading at $1,620.18 with a 1.36% decline in the last day. The token’s daily trading volume has decreased by 36.41% and is valued at $2.86 billion.
Hot Take: Coinbase Emerges as a Major Player in ETH Staking Market
Coinbase’s rise as the second largest ETH staking entity highlights its growing influence in the crypto market. With a significant percentage of all staked ETH, Coinbase has become an important player in the Ethereum ecosystem. However, concerns about centralization persist, particularly with Lido DAO’s dominance. As the market continues to evolve, it will be crucial to address these concerns and ensure a more decentralized and secure network for ETH stakers and users alike.
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