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Ethereum Liquid Staking Providers Commit to Self-Limit Rule to Ensure Decentralization

Several Ethereum liquid staking providers, including Rocket Pool, StakeWise, Stader Labs, Diva Staking, and Puffer Finance, have committed to or are in the process of committing to a self-limit rule that promises not to own more than 22% of the Ethereum staking market. This move is aimed at ensuring the decentralization of the Ethereum network. The proposal was put forward by Ethereum core developer Superphiz in May 2022, and the self-limit was set at 22% because at least four major entities would have to collude for the chain to reach finalization.

However, the largest Ethereum liquid staking provider, Lido Finance, voted against self-limiting back in June, and currently dominates the Ethereum staking market with 32.4% of all staked Ether. The proposal has received mixed reactions from the Ethereum community, with some describing Lido's market share dominance as "disgusting and selfish."

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