The debate over the authenticity of decentralization on blockchains like Ethereum is still an open discussion.
Last September, the ethereum network finally underwent a controversial merger event. The incident sparked a new conversation about what it means to be a truly decentralized web and what it stands for.
It is important to note that decentralization is not a partially applicable concept. Any DeFi organization can be a hybrid in principle, but it is not ideal to have the characteristics of DeFi and TradeFi at the same time.
Users can measure the decentralization and centralization coefficients of cryptocurrency entities through some parameters. Decentralization is a defense against censorship and user attacks.
The Ethereum network is said to be more decentralized than before. The main reason is that the PoS transition of the blockchain is already considered a big deal. In this way, these organizations can ensure that there are protocols in place to defend the decentralized ranking of their consensus models.
Lido Staked Ether is an example of how Ethereum is developing. The Lido project is an upgrade with features such as undoing a 51% attack which now requires 100% control of all Lido miners.
Currently, Lido is the largest entity connected to the Ethereum network, holding about $5 billion in ETH stakes. There are approximately 30 independent Lido operators. At the same time, the project also has more than 90,000 independent depositors.
Lido protocol and the Ethereum network
Validator autonomy over stakers has been a longstanding issue. Validators can exit the stake position at any time, while stakers will remain locked. However, neither party will receive any further rewards for their work.
Therefore, Lido changes the validator set. Lido gives stakers the option to select a validator of their choice.
Lido still doesn’t use PoW, it works with the staking contract using ETH tokens that distribute 10% of the rewards between the DAO treasury and the operator. The Lido protocol is also working on redefining problems related to Howey’s test problem.
At the same time, the Ethereum network increases the participation of validators without exposing them to the risk of being exploited.
Information source: compiled from HERALDSHEETS by 0x information.Copyright belongs to the author Larry Wright, without permission, may not be reproduced