Lido’s market dominance and Ethereum decentralization post-Merge

cointelegraph.com:

After a successful third testnet merge, Sept. 19 was recently proposed as the tentative target date for the Ethereum Merge. Ethereum is set to fully transition from proof-of-work (PoW), the original consensus mechanism used by the Bitcoin network, to the more energy-efficient proof-of-stake (PoS) used by younger networks like Solana and Cardano.

“The Merge won’t solve Ethereum’s scaling concerns on its own. It is just the beginning of a road map to achieve future scaling upgrades,” Jacob Blish, head of business development at Lido, shared with Cointelegraph.

The staked Ether (ETH) on the Beacon Chain, the PoS network that mirrors Ethereum’s transactions, is expected to remain locked up for at least six months after the Merge is completed. After the Merge, staked ETH liquid tokens will start benefiting from transaction fees and maximal extractable value, meaning yields will go up.

There has been a lot of hype around the Merge. It is the single biggest event in crypto for a very long time, Rocket Pool founder Darren Langley told Cointelegraph, adding, “The lockup period is testing liquid staking protocols now but this is mainly due to macro conditions and the ongoing Centralized Finance (CeFi) drama. Once it blows over, liquid staking will explode.”

Currently, ETH staking yields are earning close to a 4% annual percentage rate (APR), with just over 10% of the ETH supply being staked, according to StakingRewards.

The launch of the Beacon Chain created a need in the ecosystem for a decentralized liquid staking solution that would compete against centralized exchanges (CEX) and could be used within decentralized finance (DeFi) for lending, borrowing and more. 

The staking service offered by Lido has gained popularity as the first