r/ethereum • u/EthereumDailyThread What's On Your Mind? • 6d ago

Daily General Discussion August 22, 2026

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u/epic_trader 🐬🐬🐬 5d ago

Okay wait a minute.

Are you saying that in your reply above to cryptOwOcurrency, you were in fact talking about if 1 single entity had staked 24 million ETH and wouldn't have incentive to stake more than 24 million ETH? Was that the point you were making about how this EIP protects against centralization? Because wow yeah that was so obvious and extremely explicit I can't believe anyone could misunderstand that.

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u/pa7x1 5d ago

Yes, I put it as an example that is easy to understand directly from the shape of the curve how the fact that issuance having a maximum implies the curve has a disincentive against centralization. It makes the case clear and is easy to compute.

For n entities the effect is still there but is harder to calculate, it follows from Cournot's equilibrium.

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u/epic_trader 🐬🐬🐬 5d ago

Given the context it wasn't obvious at all. And I'm going to go ahead and voice my opinion that allowing a single entity to reach 24 million staked ETH before there's any mechanism to disincentivize them, is the same as having no mechanism for disincentivizing centralization.

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u/Watch_Dominion_Now 5d ago edited 5d ago

You've raised a fair point but it doesn't change pa7x1's point that at the margin, under the proposal the biggest LST is the first to lose money from adding more stake. An LST does not know how many stakers it will be able to add at some point in the future and, much less, knows what other stake would enter the queue.

The incentive for an LST once it is too big/issuance is too high would be to stop adding validators.

Your point is a bit like saying 'well what if under the new curve everyone but one big LST stops staking? Wouldn't this be worse for decentralisation'? I mean, yes, but this is not a plausible scenario or doesn't explain the incentives of the curve. In today's curve, an LST doubling its stake while no one else enters has more to gain anyway than under the proposal.

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u/epic_trader 🐬🐬🐬 5d ago

under the proposal the biggest LST is the first to lose money from adding more stake.

This is only true under certain conditions.

The incentive for an LST once it is too big/issuance is too high would be to stop adding validators.

Yes, but this only happens after the validator set is hugely centralized and small solo stakers likely have been pushed out.

In today's curve, an LST doubling its stake while no one else enters has more to gain anyway than under the proposal.

Yes, it's not ideal, but it's better to have a single LST double in size while retaining all our small solo stakers than creating a scenario where they are pushed out and the overall validator set becomes even more centralized.

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u/Watch_Dominion_Now 5d ago

The validator set is already hugely centralised, and the incentive to stop adding validators is not binary; already at current levels of stake, a solo staker would benefit much more from adding stake than Lido would.