The 22% self-limit rule makes sure that at least four significant stakeholder entities must cooperate for the chain to be finalized. In the ever-evolving world of cryptocurrencies, Ethereum is no stranger to the pursuit of decentralization. A recent development has seen several Ethereum liquid staking providers take steps to uphold the network’s decentralized ethos. Their pledge: a commitment not to own more than 22% of the Ethereum staking market.
Providers Embrace the Self-Limit Rule
Leading the charge are prominent names in the Ethereum staking landscape, including Rocket Pool, StakeWise, Stader Labs, Diva Staking, and Puffer Finance. This collective decision, as highlighted by Ethereum core developer Superphiz, is a proactive response to growing concerns about Ethereum staking drifting toward centralization.
The rationale behind this self-imposed limitation is rather strategic. With the threshold set at 22%, the network ensures that, for any substantial changes to occur, a consensus among 66% of validators is required. In essence, at least four major entities would need to collude to influence significant decisions within the network, thereby bolstering its decentralization and security.
Related: Ethereum devs propose 64x increase in staking limit for validators
Divergent Views in the Ethereum Ecosystem
While the Ethereum community appears united in the pursuit of decentralization, the road to achieving this goal is marked by diverse perspectives. Lido Finance, the largest Ethereum liquid staking provider, chose a different path. In a June vote, the overwhelming majority, 99.81%, decided against imposing self-limitations.
![Ethereum Stakers Agree to 22% Limit to Protect Network Decentralization image](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/09/image.png?resize=1024%2C367&ssl=1)
![Ethereum Stakers Agree to 22% Limit to Protect Network Decentralization image](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/09/image.png?resize=1024%2C367&ssl=1)
As Lido Finance continues to dominate the Ethereum staking landscape, accounting for 32.4% of all staked Ether, contrasting views within the community emerge. Some argue that self-limitations aren’t essential, emphasizing the pursuit of economically rational choices. Others, however, remain vigilant, wary of potential centralization risks. The conversation in Ethereum’s journey toward decentralization is as diverse as the ecosystem itself, underscoring the intricate balancing act between profit motives and the greater good of the network.