Lido's Dominance in Ethereum Validator Space Poses Security Risk, Decentralized Validator Technology Gains Traction
The concentration of power among a small group of validators, including Lido, on the Ethereum network is a significant security risk. Lido controls a large portion of staked ETH, and if this share increases, it could lead to network outages or malicious activity. Decentralized validator technology (DVT) aims to address this vulnerability by spreading operations across multiple parties. Lido is testing a "Simple DVT Module" in partnership with Obol and SSV, and while larger institutions may take time to adopt DVT, hobbyist solo-stakers and community-run collectives are expected to embrace the technology soon.
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