The CEO of liquid staking protocol Ether.fi has warned that a proposed Ethereum improvement proposal, EIP-8363, could hurt small liquid staking tokens and consolidate staking power around Lido. The executive said the proposal risks centralizing Ethereum staking and undermining decentralization by favoring large operators.
A warning from Ether.fi's CEO
The CEO didn't mince words. In a public statement, they said EIP-8363 could harm small liquid staking tokens (LSTs) and push more staking activity toward Lido, the liquid staking provider. The concern isn't just about market share — it's about the fundamental structure of Ethereum staking.
The centralization risk
The core issue is that EIP-8363 may make it easier for large operators to dominate staking. That could concentrate power in fewer hands, which runs counter to Ethereum's decentralization ethos. The CEO specifically pointed to the risk of consolidating staking power toward Lido, which already controls a significant chunk of the market.
What's at stake for small LSTs
Small liquid staking tokens are the ones most exposed. If the proposal goes through, these smaller tokens could see reduced demand as stakers migrate to Lido's more dominant offering. The CEO argued that this would undermine the diversity that small LSTs bring to the ecosystem.
The warning comes as Ethereum staking continues to evolve, with liquid staking tokens playing a growing role. But the proposal raises a fundamental question: how does the network balance efficiency and decentralization? The CEO's stance suggests that some see EIP-8363 as a step too far in favor of scale.
Whether EIP-8363 will be adopted remains an open question. But the CEO's warning has put a spotlight on the potential consequences — and small LSTs are watching closely.
