Reasons to Focus on DVT

Reasons to Focus on DVT:

- The Ethereum community can gradually achieve decentralization of staking through DVT.

- Staking providers can manage the ~33% risk through DVT.

- For ETH ETF Providers, DVT solutions are a good means to avoid staking regulatory risks.

1/ Currently, major staking service providers occupy over 50% of the Ethereum network, with Lido alone accounting for about 32% of the total staking share.

2/ Vitalik Buterin has been expressing concerns about the centralization of existing liquidity staking solutions since last year. *Mentioned again on December 28th.

3/ The moment the threshold of 34% is exceeded, there is a possibility for validators to forge transactions, and the network could be dominated by a minority of validators.

4/ Of course, the likelihood of Lido launching an attack on Ethereum is slim.

5/ However, Lido's substantial stake in it, there's a "Wag the Dog" scenario where Lido could disproportionately influence Ethereum's governance. This is becoming a potential risk.

6/ To address this issue, the Ethereum community plans to implement EIP-7514 in the Dencun upgrade. This is a restriction to slow down Ethereum staking and is aimed at reducing Lido's stake share.

7/ Unfortunately, this is only a temporary solution. LSD is one of the most promising sectors, and the number of Staked ETH Tokens is increasing daily.

8/ Most importantly, Lido is unlikely to relinquish its position as a sector leader. (LSD Wars - *EigenLayer)

9/ The imminent arrival of an Ethereum spot ETF is also significant.

10/ In other words, ETH ETF Providers — dominant staking syndicates such as "Wall Street asset managers" — are also on the horizon.

11/ The approval of Ethereum ETFs will create groups managing large amounts of ETH, and the wolves of Wall Street will not forgo the potential +3~4% return from staking.

12/ Of course, at this point, Ethereum staking is likely to violate ETF asset holding requirements, so discussions about the legality of custody should precede.

*Lido plans to gradually adopt DVT and has chosen Obol Network and SSV Network as partners. Diva Staking, as a latecomer, is also offering DVT solutions, and many LSD companies are expected to choose DVT as a partner.