Cryptocurrencies
Biggest Ether Staking Service Has a Centralization Problem
- Lido seen raising centralization risk by some observers
- Protocol maintains it improves decentralization of staking
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A cryptocurrency project touted as helping to democratize the Ethereum blockchain is coming under criticism for potentially taking too much control of the network as it undergoes a closely-watched software upgrade.
The DeFi, or decentralized finance, platform Lido Finance has become the largest provider of staking services for Ethereum, a practice that allows owners of the Ether cryptocurrency to earn passive income without having to sell their tokens. The staked coins are used to help validate transactions and secure the network in exchange for rewards, based in part on the amount of new tokens minted and fees collected. The practice is also popular among users of leading exchanges such as Coinbase, Kraken and Binance.