JPMorgan Chase &. Co. has shed light on how the Ethereum network decentralization has decreased significantly since the Merge event and Shanghai upgrade went live.

The rise of staking and centralization

Since implementing the Merge and Shanghai upgrades, Ethereum has seen a substantial uptick in staking activities.

Staking, a process where users lock up their crypto assets to support network operations, has its merits. According to a CoinDesk report citing JPMorgan research, this surge in staking activity comes at a cost: centralization.

Traditionally, many in the crypto community prefer decentralized liquid staking platforms like Lido over their centralized counterparts. 

Lido’s approach included adding more node operators to ensure no single entity controlled a significant portion of staked Ether (ETH). The aim was to address centralization concerns.

However, centralization remains a risk. A concentration of liquidity providers or node operators could act as a single point of failure or even collude to create an oligopoly, potentially undermining the interests of the broader Ethereum community.

Ethereum, the world’s second-largest crypto, has become more centralized since the Merge and Shanghai upgrades. And JPMorgan is highlighting concerns over a decline in staking yields. 

The menace of rehypothecation

Another highlight from the report is rehypothecation. This

Go to Source to See Full Article
Author: Ogwu Osaemezu Emmanuel

Did you like this?
Tip BTC Newswire with Cryptocurrency

• Bitcoin
• Bitcoin Cash
• Ethereum
• Litecoin
• Monero
• ZCash

Donate Bitcoin to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some bitcoin:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate Bitcoin Cash to BTC Newswire

Scan the QR code or copy the address below into your wallet to send bitcoin:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate Ethereum to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some Ether:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate Litecoin to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some Litecoin:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate Monero to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some Monero:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate ZCash to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some ZCash:

Copy ZCash Address

[X] Click Here to Hide Donation Details