Ethereum staking services unanimously set a cap of 22% for all validators.
Several Ethereum liquid staking providers have taken steps to enforce a self-imposed limitation on their ownership within the Ethereum staking market, capping their holdings at a maximum of 22%. This proactive measure has been adopted to safeguard the decentralized nature of the Ethereum network, ensuring that it remains resilient against centralization.
Notably, this commitment to the self-limit rule has been embraced by various Ethereum staking providers, either already in practice or in the process of formalizing their commitment. Prominent among these providers are Rocket Pool, StakeWise, Stader Labs, Diva Staking, and Puffer Finance, the latter of which recently declared its dedication to adhering to this self-limitation.
The primary objective of this proposal is to address mounting concerns surrounding the potential centralization of Ethereum staking. By establishing a maximum ownership threshold of 22%, the Ethereum community aims to mitigate the risk of excessive consolidation of power within the network.
The rationale behind selecting 22% as the cap is rooted in the network's consensus mechanism. For Ethereum, finality is achieved when 66% of validators concur on the state of the blockchain. By setting the self-limit below 22%, the requirement for at least four major entities to collude in order to influence the chain's finalization is introduced. This layer of security helps ensure that transactions within a block are effectively immutable once they reach the finality stage, preserving the integrity of the network.
The genesis of this concept can be traced back to May 2022 when Ethereum core developer Superphiz raised a fundamental question: Would a staking pool prioritize the health and decentralization of the Ethereum chain over its own profit motives?
It's worth noting that Lido Finance, the largest Ethereum liquid staking provider, took a different stance by voting overwhelmingly, with a 99.81% majority, against self-imposing this limit back in June.
