Before The Merge, Ethereum had dozens upon dozens mining pools that contributed hashrate to the network. This has changed, and most miners have switched to Ethash compatible coins, such as ethereum classic or ERGO. At the time of writing, Ethereum blocks can now be verified by validators. There are currently 429,278 validators. Four providers are responsible for a large portion of the 13.7 Million Ethereum stakes.
4 Known Providers Own 59% of Staked Ethereum Today
Bitcoin.com News reported that Lido had 30% of staked ether just four days before. The lead onchain analyst at Glassnode's Twitter account, Checkmate, wrote on September 15 about entities that hold the lion's-share of staked ETH today. Checkmate sent an email to Lido stating that they had profiled "a few more entities". Checkmate stated that data showed that 13.7 million Ethereum staked and 10,000,000 ETH are held by known providers. This equates to 73% staked ETH and the top four providers have 8.13 million ETH, or 59.3%.
Checkmate stated that 4.17M was in Lido and 1.92M in Coinbase. 1.14M is Kraken [and] 0.9M are in Binance." The popular bitcoiner Tuur DeMeester, editor at satoshipapers.org, shared the tweet of the Glassnode onchain analyst. "44% of ETH are staked by only 2 entities, Lido [and] Coinbase. Demeester added Kraken to the equation, which makes 52% of total ETH staked at 3 entities. Demeester also ridiculed a tweet by Vitalik Buterin, which discusses the idea of average users validating the system.
SEC Chair Gensler suggests a Second Look at Staking Coins. Jack Dorsey shares anti-PoS Editorial. Ethereum Proponents Think People are Getting ahead of Theyself
Gary Gensler (chair of the U.S. Securities and Exchange Commission) recently spoke about bitcoiners such as Checkmate and Demeester. According to the Wall Street Journal (WSJ), Gensler stated that "from the coin's standpoint… that's another indicator that the investing public is anticipating profit based on the efforts based upon the efforts of others under the Howey testing." Although Gensler did not mention any particular cryptocurrency, many crypto enthusiasts believed that Gensler was talking about ethereum and PoS coins.
BREAKING: Gary Gensler suggests that the use of Proof-of Stake could be used to trigger securities laws.
— Dennis Porter (@Dennis_Porter_) September 15, 2022
Brian Armstrong, Coinbase's co-founder and CEO, was asked mid-August if the exchange would censor at ethereum protocol levels with validators. The user demanded: "If regulators ask for you to censor the ethereum protocol layer with your validators, will you: (A. Comply and censor [the] protocol Level (B. Shut down staking service and preserve the network integrity")
Armstrong replied three days later, saying: "It is a hypothetical that hopefully we won't actually face. However, if we did, we would choose (B), I believe. We need to see the larger picture. You may have a better solution (C) or a legal challenge that could lead to a better outcome.
Many people believe it is possible for known validators to be forced into compliance with regulations and censorship. There are four central entities holding the largest amount of ethereum today. People have concerns about whether validators will be centralized to censor transactions. Jack Dorsey, Twitter's co-founder, shared an editorial on substack.com criticizing PoS. Scott Sullivan wrote the substack.com editorial. It claims that PoS is a permissioned, validator system and that to be one is to walk on eggshells every day.
Most of the criticism comes from bitcoiners, who are sometimes called bitcoin maximalists. The idea is absurd according to Ethereum supporters. One supporter said that he would just jump to an ETH network that does not censor transactions. Ryan Adams tweeted: "Guys, [the U.S government] isn’t trying to censor validators [ethereum] right now. We shouldn't get ahead of ourselves. But, if they ever do, I'll be on Ethereum's fork that doesn't censor transactions. It's that simple. Adams explained that Layer 0 is our security level.
Eric Wall, a blogger and Bitcoin supporter, posted a thread on Twitter September 16 in which he stated that Lido is not a pool.
"Lido cannot fire any of its node operators, or take stake away from them. Only 13.1% of Lido validaters are located in one country. Wall adds that the geographic distribution is quite impressive." Wall posted this tweet in response to Wall.
What do you think of the criticisms levelled at Ethereum and the validators who censor transactions? Please comment below to let us know your thoughts on this topic.
By: Jamie Redman
Title: Proof-of-Work Proponents Question Validator Censorship as 59% of Staked Ethereum Is Held by 4 Companies
Sourced From: news.bitcoin.com/proof-of-work-proponents-question-validator-censorship-as-59-of-staked-ethereum-is-held-by-4-companies/
Published Date: Fri, 16 Sep 2022 20:30:55 +0000
Did you miss our previous article…