64% OF STAKED ETH CONTROLLED BY 5 ENTITIES — NANSEN

Last updated: June 20, 2025, 00:44 | Written by: Arthur Hayes

The Ethereum blockchain is on the cusp of a monumental shift – The Merge – transitioning from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. The Big Airlines Lost Money Flying Passengers Last JanuThis highly anticipated event promises increased energy efficiency and paves the way for future scalability improvements. Nansen s report highlights that just over 11% of the total circulating ETH is staked, with 65% liquid and 35% illiquid. There are a total of 426,000 validators and some 80,000 depositors, while the report also highlights a small group of entities that command a significant portion of staked ETH.However, a recent report by blockchain analytics platform Nansen has unveiled a potentially concerning trend: a significant concentration of staked Ether (ETH) in the hands of just five entities.According to the report, these entities collectively control approximately 64% of all staked ETH, raising questions about decentralization and the potential influence these players could wield over the network.This concentration is especially noteworthy as The Merge approaches, highlighting the importance of understanding the landscape of staked ETH and its potential ramifications for the future of Ethereum.

The implications of this concentration are far-reaching, potentially impacting network security, governance, and overall decentralization. According to a report by analytics firm Nansen, 64% of staked Ethereum is controlled by 5 entities: Lido Finance (31%), Coinbase (15%), Kraken (8,5%), Binance (6,75%), and Staked.us (3,92%). Cointelegraph reports, citing a document, that 23% of all staked ETH accounts for the unlabeled group of validators.While the total number of validators on the network is significant (around 426,000), and the number of unique depositors is also noteworthy (around 80,000), the sheer volume of ETH controlled by a handful of entities warrants careful examination. A report from blockchain analytics platform Nansen highlights five entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon chain.Ethereum s shiftLet's delve deeper into the Nansen report and explore the key players, the potential risks, and what this means for the future of Ethereum as it embarks on this transformative journey.

Understanding the Staked ETH Landscape

Before diving into the specifics of the Nansen report, it's crucial to understand the concept of staking in the context of Ethereum's transition to proof-of-stake. A report from blockchain analytics platform Nansen highlights 5 entities that hold 64% of staked Ether ahead of Ethereum s highly anticipated Merge with the Beacon Chain. Ethereum s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks have bee completed in early SeptemberIn a PoS system, validators, instead of miners, are responsible for verifying transactions and creating new blocks. According to the report, five entities control up to 64% of staked ETH. While outlining the details of its report, the firm noted that Lido DAO stands as the largest staking provider for the Merge. The DAO has about 31% share distribution of all staked Ether.To become a validator, individuals or entities must stake a certain amount of ETH (currently 32 ETH) as collateral.In return for their services, validators receive rewards in the form of newly minted ETH and transaction fees.

Staking plays a vital role in securing the network and ensuring its integrity. A report from blockchain analytics platform Nansen highlights 5 entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon Chain. Ethereum s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks have bee completed in early September. The keyBy locking up their ETH, validators are incentivized to act honestly and uphold the rules of the network.Any malicious behavior or attempts to manipulate the blockchain would result in the loss of their staked ETH, making it a costly endeavor. New report by Nansen delves into the distribution of staked ETH, respective holders and possible ramifications as The Merge looms. A report from blockchain analytics platform Nansen highlights five entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon chain. Ethereum s shift from proof-of-work to proof-of-stake is set [ ]The more ETH that is staked, the more secure and robust the network becomes.

Key Metrics in the Staking Ecosystem

The Nansen report highlights several key metrics that provide a snapshot of the Ethereum staking ecosystem:

Total ETH Staked: Represents the total amount of ETH locked up in staking contracts.
Number of Validators: Indicates the total number of active entities validating transactions.
Number of Depositors: Represents the total number of unique addresses that have deposited ETH into staking contracts. 64% of staked ETH controlled by five entities Nansen . Open in AppThis number is different than the number of validators because one depositor can have multiple validators.
Distribution of Staked ETH: Shows how the staked ETH is distributed among different entities.
Liquid vs.Illiquid Staked ETH: Identifies the proportion of staked ETH that is readily tradable (liquid) versus that which is locked up for a set period (illiquid).According to Nansen's report, just over 11% of the total circulating ETH is staked, with 65% liquid and 35% illiquid.

The Top 5 Entities Controlling Staked ETH

The Nansen report identifies the following five entities as controlling a significant portion (64%) of the total staked ETH:

Lido Finance (31%): Lido is a decentralized autonomous organization (DAO) that allows users to stake their ETH and receive stETH tokens in return. stETH represents their staked ETH and can be used in various DeFi applications, providing liquidity for staked ETH.
Coinbase (15%): Coinbase is a centralized cryptocurrency exchange that offers staking services to its users. New report by Nansen delves into the distribution of staked ETH, respective holders and possible ramifications as The Merge looms. Post navigation 64% of staked ETH controlled by five entities NansenUsers can stake their ETH through Coinbase and earn rewards without having to run their own validator nodes.
Kraken (8.5%): Similar to Coinbase, Kraken is another centralized cryptocurrency exchange that provides ETH staking services to its users.
Binance (6.75%): Binance, also a leading cryptocurrency exchange, offers ETH staking services.
Staked.us (3.92%): Staked.us is a platform that provides staking services for various blockchain networks, including Ethereum.

It's important to note that while these entities control a large portion of staked ETH, they are not necessarily acting in collusion. A report from blockchain analytics platform Nansen highlights 5 entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon Chain. Ethereum s shift from proof-of-work to proof-of-stake is set [ ]Each entity operates independently and has its own set of incentives. A report from blockchain analytics platform Nansen highlights 5 entities that hold 64% of staked Ether ahead of Ethereum s highly anticipated Merge with the Beacon Chain.However, the sheer concentration of power in their hands raises concerns about potential centralization risks.

Why is the Concentration of Staked ETH a Concern?

The concentration of staked ETH in the hands of a few entities poses several potential risks to the Ethereum network:

Centralization of Power: A small number of entities controlling a significant portion of staked ETH could potentially exert undue influence over the network's governance and decision-making processes.They could potentially collude to vote on proposals or influence the direction of the network in ways that benefit them at the expense of other participants.
Increased Attack Vector: If a single entity controls a substantial portion of the staked ETH, it could become a more attractive target for malicious actors. 64% of staked ETH controlled by five entities Nansen 64% of staked ETH controlled by five entities Nansen. SeptemA successful attack on one of these large staking providers could potentially disrupt the network and compromise the security of the system.
Censorship Risks: Entities controlling a large portion of staked ETH could potentially censor certain transactions or block certain addresses from participating in the network.This could undermine the principles of decentralization and permissionlessness that are central to Ethereum's ethos.
Systemic Risk: If one of the large staking providers were to fail or experience a significant security breach, it could have a ripple effect throughout the entire Ethereum ecosystem. A report from blockchain analytics platform Nansen highlights 5 entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon Chain. Ethereum s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks have bee completed in early September. The key [ ]The loss of a large amount of staked ETH could trigger a cascading effect, leading to instability and potentially even a loss of confidence in the network.

These are just some of the potential risks associated with the concentration of staked ETH. A report from blockchain analytics platform Nansen highlights five entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon Be the first to review this topic.It's crucial to address these concerns proactively to ensure the long-term health and decentralization of the Ethereum network.

Addressing the Concerns: Potential Solutions

While the concentration of staked ETH is a valid concern, it's important to note that the Ethereum community is actively working on solutions to mitigate these risks. A report from blockchain analytics platform Nansen highlights 5 entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon Chain. Ethereum s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks were completed in early September. The key componentHere are some potential approaches:

Encouraging Decentralized Staking: One approach is to encourage more individuals and smaller entities to participate in staking. New report by Nansen delves into the distribution of staked ETH, respective holders and possible ramifications as The Merge looms. 64% of staked ETH controlled byThis could be achieved through educational initiatives, simplified staking tools, and incentives for running independent validator nodes.
Promoting Staking Diversity: Encouraging users to diversify their staking across multiple providers can help reduce the concentration of power in the hands of a few entities. 64% of staked ETH controlled by five entities Nansen entities eth controlled staked stake ⁣This could involve using multiple staking services, running their own validator nodes, or participating in decentralized staking pools.
Improving Governance Mechanisms: Strengthening the governance mechanisms of the Ethereum network can help prevent a small number of entities from exerting undue influence over the decision-making processes.This could involve implementing more robust voting systems, increasing transparency, and ensuring broader participation in governance discussions.
Developing Anti-Censorship Mechanisms: Implementing mechanisms to prevent censorship can help ensure that all transactions are treated equally and that no addresses are unfairly blocked from participating in the network.This could involve using technologies like transaction relayers and decentralized censorship resistance protocols.
Exploring Alternative Staking Models: Researching and exploring alternative staking models, such as liquid staking derivatives and permissionless staking pools, can help diversify the staking landscape and reduce the reliance on centralized staking providers.

The Ethereum community is committed to fostering a more decentralized and resilient staking ecosystem. A report from blockchain analytics platform Nansen highlights five entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon chain. Ethereum s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks were completed in early September.By proactively addressing the concerns raised by the Nansen report, the community can ensure that the Merge is a success and that Ethereum remains a vibrant and decentralized platform for innovation.

The Role of Liquid Staking Derivatives (LSDs)

Liquid staking derivatives (LSDs) have emerged as a popular solution to address the illiquidity of staked ETH.LSDs allow users to stake their ETH and receive a token representing their staked ETH in return.This token can then be used in various DeFi applications, providing liquidity while still earning staking rewards.Lido's stETH is a prime example of a successful LSD.

While LSDs offer several benefits, they also introduce new risks that need to be carefully considered:

Smart Contract Risk: LSDs rely on smart contracts to manage the staking and tokenization process.Any bugs or vulnerabilities in these smart contracts could lead to the loss of funds.
Depeg Risk: The price of the LSD token should ideally be pegged to the price of the underlying staked ETH. Despite there being a very high number of validators (426k) and unique depositors (~80k), approximately 64% of staked ETH is with 5 entities. Lido holds the greatest amount of staked ETH (31%), followed by Coinbase, Kraken, and Binance with a combined ~30%.However, market conditions and other factors can cause the peg to break, leading to losses for holders of the LSD token.
Concentration Risk (Again): A few LSD protocols dominate the market, potentially creating a new form of concentration risk.

Despite these risks, LSDs have become an integral part of the Ethereum staking ecosystem.It's crucial for users to understand the risks involved and to choose reputable and well-audited LSD protocols.

The Impact of The Merge on Staking

The Merge, Ethereum's transition to proof-of-stake, has significant implications for the staking ecosystem.

Increased Staking Rewards: Under proof-of-stake, validators will earn both block rewards and transaction fees, potentially leading to higher staking rewards compared to proof-of-work.
Reduced Energy Consumption: Proof-of-stake is significantly more energy-efficient than proof-of-work, reducing Ethereum's environmental impact.
New Staking Opportunities: The Merge opens up new opportunities for staking, such as solo staking (running your own validator node) and participating in staking pools.

The Merge is expected to further incentivize staking and increase the amount of ETH staked on the network. A report from blockchain analytics platform Nansen highlights five entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon chain. Ethereum s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks were completed in early September. The key componentThis could potentially exacerbate the concentration risks if not addressed proactively.

Practical Advice for ETH Holders Considering Staking

If you're an ETH holder considering staking, here's some practical advice:

Do Your Research: Before staking your ETH, thoroughly research the different staking options available and understand the risks involved.
Diversify Your Staking: Consider diversifying your staking across multiple providers or platforms to reduce your risk.
Choose Reputable Providers: Opt for staking providers with a strong track record, transparent operations, and robust security measures.
Understand the Lock-Up Period: Be aware of the lock-up period associated with staking and ensure that you're comfortable with not being able to access your ETH for that duration.
Consider Solo Staking: If you have the technical expertise and the resources, consider running your own validator node to contribute to the decentralization of the network.
Stay Informed: Keep up-to-date on the latest developments in the Ethereum staking ecosystem and be aware of any potential risks or opportunities.

The Future of Ethereum Staking

The future of Ethereum staking is likely to be characterized by increased innovation, greater decentralization, and more sophisticated risk management tools.The community is actively working on solutions to address the concerns raised by the Nansen report and to ensure that the staking ecosystem is robust, secure, and decentralized.

As Ethereum continues to evolve, staking will play an increasingly important role in securing the network and driving its growth.By fostering a healthy and diverse staking ecosystem, Ethereum can realize its full potential as a decentralized platform for innovation and economic empowerment.

Addressing Common Questions About Staked ETH

What exactly is staked ETH?

Staked ETH refers to Ether (ETH) tokens that have been locked up in a staking contract on the Ethereum blockchain.These tokens are used to secure the network under the proof-of-stake (PoS) consensus mechanism. A report from blockchain analytics platform Nansen highlights 5 entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon Chain. Ethereum s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks have bee completed in early September.Stakers, in return for their contribution to network security, receive rewards in the form of additional ETH.

Why is staking ETH important for Ethereum?

Staking is crucial for Ethereum's transition to PoS as it replaces the energy-intensive proof-of-work system. New report by Nansen delves into the distribution of staked ETH, respective holders and possible ramifications as The Merge looms. 64% of staked ETH controlled by five entities Nansen - XBT.MarketBy staking ETH, users help validate transactions, create new blocks, and maintain the integrity of the blockchain. New report by Nansen delves into the distribution of staked ETH, respective holders and possible ramifications as The Merge looms. Get best and latest bitcoin news today with coinsurges.This process is more energy-efficient and allows Ethereum to scale more effectively.

What happens to my ETH when I stake it?

When you stake your ETH, it is locked up in a smart contract for a specific period, during which you cannot access or transfer it freely. A report from blockchain analytics platform Nansen highlights five entities that hold 64% of staked Ether (ETH) ahead of Ethereum s highly anticipated Merge with the Beacon chain.Ethereum s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks were completed in early September.During this time, your staked ETH is used to validate transactions and secure the network.In return for your participation, you earn staking rewards, which are distributed periodically.

How do staking rewards work?

Staking rewards are distributed to validators (those who stake ETH) based on their stake and their contribution to the network.The rewards typically consist of newly minted ETH and transaction fees.The exact amount of rewards depends on various factors, including the total amount of ETH staked on the network and the network's overall performance.

What are the risks associated with staking ETH?

While staking ETH can be a rewarding experience, it also comes with certain risks.These include smart contract risks (vulnerabilities in the staking contracts), slashing risks (penalties for malicious or negligent behavior), and liquidity risks (inability to access your staked ETH during the lock-up period).It is important to understand these risks before staking your ETH.

What is the Merge, and how does it affect staking?

The Merge is the planned transition of Ethereum from proof-of-work to proof-of-stake.After The Merge, staking will become the primary mechanism for securing the Ethereum network.This transition is expected to increase the efficiency and scalability of Ethereum, as well as offer more opportunities for ETH holders to participate in network validation and earn rewards.

Conclusion: Navigating the Future of Ethereum Staking

The Nansen report's findings regarding the concentration of staked ETH highlight the importance of addressing potential centralization risks as Ethereum transitions to proof-of-stake.While the network boasts a significant number of validators and depositors, the dominance of a few key entities warrants careful consideration and proactive solutions.Diversifying staking participation, promoting decentralized staking methods, and strengthening governance mechanisms are crucial steps towards ensuring a more resilient and decentralized Ethereum ecosystem.

The Merge represents a significant milestone for Ethereum, and its success hinges on a healthy and balanced staking landscape.By understanding the risks and opportunities associated with staking, ETH holders can make informed decisions and contribute to the long-term security and decentralization of the network.The Ethereum community's commitment to innovation and collaboration offers hope for a future where staking is accessible to all and the benefits of proof-of-stake are realized to their fullest potential.

Key Takeaways: The concentration of staked ETH is a real concern.Diversification and decentralized staking options are key to a healthy Ethereum ecosystem.Stay informed and make responsible choices when participating in ETH staking.