Will liquid staking cause Ethereum to succumb to the forces of centralization?
Liquid staking. It’s one of the few hot spaces in crypto right now, Mike Ippolito says. The freedom to tap into DeFi with wrapped tokens made available in exchange for staking ETH is a relatively novel concept that, although highly popular in Ethereum’s ecosystem, did not originate there. First conceived in the Cosmos app chain ecosystem, the innovation took off in Ethereum’s community — at least partly out of fear that centralized exchanges such as Coinbase or Binance would hold too much staking power in a few massive pools. “One of the early core propositions when Ethereum was switching from proof-of-work chain to a proof-of-stake chain was they wanted to make sure that it didn’t get concentrated,” explains Ippolito, the host of the Bell Curve podcast (Spotify/Apple). “So what they wanted to do was make sure that didn’t happen by not selecting a delegated proof-of-stake mechanism” whereby only a few entities would control the network. Dominant liquid staking protocols such ...