To ensure decentralization, several Ethereum staking providers have implemented or are planning to implement a self-limit rule that restricts their ownership of the Ethereum staking market to no more than 22%. This rule aims to prevent the network from becoming centralized. Providers such as Rocket Pool, StakeWise, Stader Labs, Diva Staking, and Puffer Finance have committed to this self-limit. The proposal was made by Ethereum core developer Superphiz, who explained that setting the limit below 22% would require collusion among at least four major entities for the chain to reach finalization. Finality is important as it ensures the immutability of transactions on the blockchain. However, the largest Ethereum liquid staking provider, Lido Finance, voted against self-limiting. Lido currently dominates the market with 32.4% of all staked Ether, while Coinbase holds only 8.7%. The Ethereum community has mixed reactions to the self-limit proposal, with some arguing for economic self-interest and others expressing concerns about centralization.
