One of the Ethereum staking pools, Lido, has announced that it would lower the requirements to become a validator on its platform. Thus, enhancing the decentralization of their platform.
Based on the new requirements, anyone can become a Lido validator regardless of the amount of Ethereum they have staked. Furthermore, it would enhance governance on the platform, with staked ETH holders becoming more empowered to influence decisions in the ecosystem.
Lowering The Influence Of Top Ethereum Stakers
Lido announced changes regarding the requirements of a validator via a lengthy blog post on Friday. The staking pool’s TVL of $17B makes it the second-largest DeFi platform based on TVL. Once the Ethereum merge is complete, Lido validators will be rewarded on the staked Ethereum via yields and transaction fees. Before the changes become effective, Lido chooses its validators by reviewing a list of peer node operators from the Ethereum network.
Once Ethereum completes its PoS switch, Lido’s market share in Eth2.0 will be nearly 85%. Thus, it can enhance decentralization by lowering the influence of top Ethereum stakers and further decentralizing the Lido platform. With a more decentralized platform, rewards for Lido’s validators will be based more on performance. One way Lido aims to have a good set of validators is to lower its requirements for a staked Ether from 2% to 1%.
Lido also proposed that there should be no legal or physical relationships among validators. In addition, they must run their nodes from different geographical locations and jurisdictions. Lido would implement the distributed validator technology where untrusted and trusted node operations would collaborate to ensure no underperformance or misbehavior from individual validators.
Singapore-Based Hedge Fund Stakes More ETH
Also, Lido proposed a node operator score where small validators will be rewarded based on performance, and they can stake their allocation. Lido plans to create a permissionless staking platform without putting the Ethereum blockchain at risk.
As Ethereum looks set to complete its PoS transition, a leading hedge fund firm out of Singapore (three arrows capital) is taking advantage of the period to increase their Ether staking. Three arrows capital has staked nearly 100k ETH in liquidity pools as it continues to take steps to become an Ethereum validator. The hedge fund’s recent Ether acquisition spree has made it become one of the top ten Ether holders.
The Consequences Of Ethereum’s PoS Switch
Popular Ethereum developer, Tim Beiko, recently disclosed that Ethereum’s PoS switch would likely be completed by June. Then, he added that once the switch is complete, the blockchain will no longer need miners’ services for the smooth running of the network. Hence, the real question is, what would happen to the miners?
According to many industry experts, some miners will likely quit the network before the switch is completed. However, most of them are likely to become BTC miners, and they must have been planning to do so since Ethereum made the announcement a few months ago.
