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Jafrin Ahmed
Jun 24, 2022
by Jafrin Ahmed

DeFi Platform Lido Proposes Limit On Ethereum Staking

Lido Ethereum

Table of contents

  1. Governance Proposal on Limiting Ethereum Staking
  2. Pros and Cons of Limiting ETH Staking
DeFi platform Lido has proposed a self-limit feature on the platform's share of staked Ethereum and put forward a governance proposal, asking for users' votes.

Governance Proposal on Limiting Ethereum Staking

On Friday, the team behind Lido put up a multi-leg vote system to determine whether or not the platform should limit itself to a share of staked ETH and, if so, how.

Pros and Cons of Limiting ETH Staking

In its argument for limiting Ethereum staking, Lido proposed that the saturation of staked Ethereum towards one protocol poses an existential threat to the blockchain, giving the protocol more voting power. It would also allow newcomers to rise to meet the supply shortfall.

In the case of the possible risks from Lido limiting exposure, Lido argued that there is a risk that a centralized exchange-led KYC standard could dominate the market if it were to choose to limit its staking exposure. This could result in other liquid staking providers not being able to scale quickly enough to meet demand, causing a liquidity crunch.

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Lido Staked Ethereum Lido Self-Limiting Lido Governance Proposal
DeFi Platform Lido Proposes Limit On Ethereum Staking
Jafrin Ahmed
Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

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