Why it Matters for Ethereum Health That Lido Thrives as a Censorship-Resistant Entity

cryptonews.com:

With Ethereum's Merge due to happen tomorrow, new research from analytics firm Nansen has revealed that 64% of all ETH staked in the platform's Beacon Chain is controlled by only five entities. Of the big five, Lido leads the way with 31% of all staked ETH, while centralized exchanges Coinbase, Kraken and Binance control a combined total of 30%.

In the context of the US ban on the Tornado Cash mixing service, the concentration of staked ETH in the hands of a few centralized entities raises the very real specter of censorship. And with exchanges such as Coinbase and Kraken regularly complying with law enforcement requests, Ethereum's move from proof-of-work and proof-of-stake potentially opens the blockchain's door to greater governmental and regulatory control.

Nansen's research shows that staked ethereum -- which currently totals 13.4 million ETH -- can be broken down into ten categories.

Lido clearly leads the way with 31%, although the existence of an 'unlabelled' category -- as well as an 'other' -- raises the (unconfirmed) hope that individuals are also staking independently of third-party pools and services.

Regardless, the fact that Lido comfortably leads the way in terms of the size of its share raises some uncomfortable questions, even if it is supposed to be a decentralised autonomous organization (DAO).

At the very least, recent events have shown that Lido now has interests that are not only independent of Ethereum's own ends, but that can also be at odds with its host network. For example, June brought a governance vote in which Lido rejected a proposal to set a limit on its growth, a position which had been supported by Ethereum co-founder Vitalik Buterin.

In addition, an analysis of Lido's governance structure