Ethereum (ETH) co-founder Vitalik Buterin has recently expressed his thoughts on potential alterations to the Ethereum staking system, including the incorporation of various protocols into Ethereum's code. In a blog post, Buterin discussed protocols such as ERC-4337 ZK-EVMs, private mempools, code precompiles, and liquid staking. However, he also voiced concerns about the concentration of power among Ethereum's liquid staking providers.
Buterin showed a stronger inclination towards embedding certain protocols into Ethereum's code, such as ERC-4337, a token standard he co-authored that introduces account abstraction without changes to the underlying Ethereum protocol. On the other hand, he was more cautious about others, like private mempools - encrypted mempools that keep users' transactions confidential until they are irrevocably accepted into a block. He acknowledged that these protocols present complex trade-offs that will continue to evolve over time.
Buterin also raised concerns about the concentration of Ethereum's liquid staking providers. Lido, a significant liquid staking pool, currently controls over 32% of the staked ether on Ethereum, with holdings dispersed across different validators. Despite safety mechanisms in place by major players like Lido and Rocket Pool (NASDAQ:POOL), Buterin emphasized the necessity for more robust measures.
To enhance the safety and decentralization of liquid staking, Buterin proposed exploring additional solutions rather than solely relying on moralistic pressure to encourage stakeholders to diversify their choice of staking providers. These solutions could involve refining RocketPool's existing approach or granting enhanced governance rights to a randomly sampled committee of small stakeholders.
Several prominent liquid staking providers have implemented or are in the process of implementing a self-limit rule aimed at maintaining Ethereum's decentralized nature. The rule ensures that these providers will not own more than 22% of the Ethereum staking market, addressing concerns over growing centralization. However, Lido Finance has chosen not to commit to the self-limit rule.
In other news, the Ethereum (ETH) price has gained more than 3.5% in the last 24 hours, shooting to the $1,750 level ahead of the launch of Ethereum futures ETFs. A successful breakthrough at the major resistance level of $1,800 could pave the way for further gains toward $1,850 and $1,920, potentially even reaching $2,000. On the downside, if Ethereum fails to surpass the $1,750 resistance, it may initiate a corrective move with initial support around the $1,710 level.
The Ethereum futures ETF from Bitwise is expected to go live later today. As of a note on September 27, there are 15 Ether futures ETFs from nine different issuers awaiting approval. These issuers include well-known names like VanEck, ProShares, Grayscale, Volatility Shares, Bitwise, Direxion, and Roundhill. Analysts have assigned a 90% likelihood of Ether futures ETFs launching in October. Among these offerings, Valkyrie's Bitcoin futures product is expected to be the first to include exposure to Ether starting on October 3.
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