According to a statement by Lido Finance, members of the Lido DAO are currently voting on whether the liquid staking protocol should take steps to reduce its dominance in the Ethereum 2.0 staking pool. As it is known, Lido Finance stakes on behalf of its customers on the Ethereum Beacon chain, which is the pioneer of the Ethereum 2.0 chain, in return for the crypto money given to it by its customers.
Thanks to this service, called liquid staking, users can use their tokens unlocked, which should normally remain locked in the ETH 2.0 network for a while. Lido users can also use their stETH tokens in other DeFi protocols such as MakerDAO and Aave.
Lido Finance Owns 31 percent of Ethereum 2.0 Network Stake Domination
The vote, which began on Friday, came after a month of debate among community members over the benefits of reducing the community's staking influence. Data from the Dune Analytics database shows that Lido currently accounts for over 31% of all stakes on the Ethereum Beacon chain.
The controversy was triggered by concerns that Lido's dominance of the ETH2 staking pool would pose a security risk to Ethereum after it transitioned from Proof of Work to Proof of Stake. Critics, including Ethereum Foundation researcher Danny Ryan, argue that staking dominance in ETH 2.0 can lead to dangerous centralization given the logic of the staking mechanism. As it is known, those who own the majority of management tokens on staking platforms have more power in voting. The voting process will end on 1 July. If the majority approves, there will be a new vote on how to implement Lido's method to reduce ETH 2.0 dominance.
Lido DAO (LDO) price was recorded as $0.627502 at the time of writing, according to CoinGecko data.