One Year After Merge, the Achievement & Challenge | Crypto Daily Digest Sep.19
While the price of $ETH has been traded sideways since last year, it has transformed into a deflationary asset, thanks to the successful merger. There are several notable achievements to celebrate: new $ETH issuance has decreased by more than 80%, nearly 1 million $ETH has been burned from the circulating supply, and staking participation has surged by almost 90%.
The Merge has also led to the boom of liquid staking protocols, which unlock the liquidity of staked $ETH through liquid staking $ETH tokens that can be traded on exchanges or used in DeFi applications. The amount of $ETH locked in Lido Finance has surged by 82%, growing from 4.6 million to 8.6 million since the beginning of the year. Lido now controls one-third of the staked $ETH, raising concerns about its potential impact on Ethereum's decentralization.
Several liquid staking protocols have proposed self-imposed limits on their market share, although Lido has not yet joined this movement.
Instead, the Lido DAO is pursuing a different approach by advocating for a dual governance model. Under this new model, Lido users, particularly those who stake Ethereum and hold stETH, will have veto power over governance proposals approved by LDO holders. This move aims to mitigate the potential influence that LDO holders could exert on Ethereum.
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