Ethereum stake pools: who runs the biggest ones?

Staking pools in Ethereum have been a popular, albeit somewhat controversial, way for investors without the funds or knowledge to receive rewards to verify the network.

There was plenty of time to participate. The merger, set to begin next week, has been in the works for years.

The merger will move Ethereum’s current Proof of Work mining model — which requires a lot of power to run transaction-processing mining rigs — into a consensus proof-of-stake system that is expected to use over 99% less power, according to the Ethereum Foundation.

When the Ethereum mainnet makes this transition, it will be the validators, not the miners, who verify transactions and add them to the blockchain. Just like miners, these validators will earn rewards for helping to secure the network.

But becoming an auditor has a high cost of entry and significant risks. Investors will need to deposit 32 ETH collateral (worth around $52,000) to become audited and maintain hardware and software to avoid downtime.

This has given rise to groups of interests.

To participate, people lock their Ethereum with a third party, such as Lido Finance or Coinbase. These entities use the funds to set up auditors and manage overheads for the running contract. In return, they take part of the bonuses and hand the rest to the depositors.

As of Friday afternoon, there are more than 422,000 unique validators with $22.3 billion (13.5 million ETH) of Ethereum in stock on the Beacon Chain, according to blockchain analytics firm Nansen. 30% of ETH is controlled by Lido Finance, 15% by Coinbase, 8% by Kraken, and another 7% by Binance.

In all, more than 60% of the Ethereum cumulative uses four devices.

To understand the implications, think of stock pools as real estate investments. REIT allows people to have exposure to investment property without having to buy it themselves and share the income.

But if four REITs control 60% of all housing, it’s easy to imagine what they could do to the market if only one of them decided to stop some people from buying and renting homes.

This is why the pools have Attracted a lot of attention In the run-up to the Ethereum consolidation – the individual entities controlling large groups of validators undermine the idea of ​​security through decentralization.

Here is a closer look at the largest staking pools of Ethereum on September 2nd:

Lido Finance, 4.2 million ETH

Lido Finance and Staked ETH (stETH) were by far the most popular betting pool. Lido launched the floating staking token in late 2020, prior to the creation of the Beacon Series. The liquid nature of the token means that ETH depositors receive stETH and can sell, trade or lend STETH while their ETH remains closed with Lido.

stETH has more than 98,000 unique wallets, according to Etherscan.

Coin base, 2 million ETH

Coinbase has offered staking Ethereum since TKTK. But two weeks ago, the company first introduced a floating stake option: Coinbase Wrapped Stacked ETH (cbETH). It behaves in the same way as stETH and can be used as collateral in decentralized finance lending protocols. As of Friday, cbETH has a market capitalization of $936 million according to CoinMarketCap and maintains a 880 unique wallets.

Kraken 1.1 million ETH

Back in December 2020, after the Proof of Stake launch of Beacon Chain, Kraken announced that its customers had staking 100,000 ETH prior to the merger. This amount has increased tenfold. Unlike Lido, Coinbase, and Binance, Kraken does not offer a liquid staking option. In fact, there is now a warning at the top common questions A page telling users that they can only remove their Ethereum after merging. But Kraken’s exposure to stock pools appears to be greater than 1.1 million ETH. in December 2021It has acquired Kraken Staked, whose American arm, Staked.US, represents 405,600 ETH.

Binance, 904608 ETH

Binance launched a file Binance Beacon ETH (bETH) in late 2021 and issued it to Ethereum makers who joined its stake pool. BETH tokens allow for liquid storage, which means that users can Use it on Binance’s Ethereum sidechain, the Binance smart chain, in the same way they were using Ethereum. It is currently in 8,939 unique wallets, according to BA.

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