- Ethereum could avoid being labeled as a security due to the decreased concentration of staked ETH on Lido, according to a report by JP Morgan.
- The share of Ethereum staked through Lido has dropped from around one-third a year ago to around one-quarter currently, indicating increased decentralization of the network.
- The price of Ethereum currently stands at $3,418, up nearly 3% over the past 24 hours, as per CoinGecko data.
The question of whether Ethereum should be classified as a security has sparked much debate. But according to a new report from JP Morgan, Ethereum may be able to avoid the security designation thanks to increasing decentralization of the network.
Share of Lido in Staked ETH Drops
In a positive sign for Ethereum decentralization, the share of staked ETH on Lido, one of the largest staking services, has decreased. JP Morgan’s report highlighted that Lido’s share has dropped from around one third a year ago to around a quarter currently. This reduction in concentration of staked ETH on Lido should ease concerns about centralization on Ethereum.
SEC’s Stance on Securities Designation
The SEC has said tokens on a decentralized enough network may not be securities because there is no controlling group. So greater decentralization helps Ethereum’s case for not being classified as a security. The SEC’s position here is important as it weighs proposals for a US Ethereum ETF.
Ethereum Price Action
The price of Ethereum now stands around $3418, up nearly 3% over the past 24 hours according to CoinGecko data.
Conclusion
Increased decentralization of Ethereum staking reduces the risk of the SEC deeming ETH a security. This is a positive development for Ethereum as the SEC evaluates ETF applications. The network upgrades have supported Ethereum’s price resilience even amid broad crypto market volatility.
