cryptonews.com
Ethereum layer-2 project Mantle has announced the launch of its new liquid-staking protocol, Mantle LSP.
In a Monday post on X (formerly Twitter), the proejct said Mantle LSP will allow users to deposit ETH and participate in network staking through validator nodes.
🎯 Interact with #MantleLSP in 2 easy steps:
• Stake $ETH to instantly receive $mETH
• Unstake $ETH to reclaim the initially staked $ETH and accumulated rewardshttps://t.co/rG4MThKptK— Mantle (@0xMantle) December 4, 2023
The introduction of the staking service represents Mantle’s expansion following the deployment of its Layer 2 network.
The concept of liquid staking, which enables users to free up their capital from staked assets, has gained popularity on Ethereum.
However, this has resulted in a concentration of ETH stakes with major providers like Lido, Coinbase, and Binance.
Mantle aims to address this issue by offering a wider range of solutions.
The protocol originated from a proposal in the Mantle governance forum in July 2023 and has since undergone an alpha phase in October, followed by a permissionless phase to broaden access and participation.
With the launch of Mantle LSP, users can stake ether and receive Mantle-staked ether (mETH) as a token representing their stake.
“The concentration of ETH staking is a result of network effect through a feedback loop of increasing name recognition and use case,” said Jordi Alexander, Chief Alchemist at Mantle.
“By focusing on mETH’s adoption in LSDfi both in the Mantle ecosystem and beyond, and its capital efficiency in maintaining the highest sustainable yield, Mantle LSP intends to be a part of the solution by creating more options for users.”
Since merging with BitDAO in May 2023, Mantle has accumulated one of the most significant community treasuries in the cryptocurrency space.
According to DeepDAO, its treasury includes assets worth $470 million in ether and over $200 million in stablecoins.
Buterin Expresses Concern About Staking Concentration
Ethereum co-founder Vitalik Buterin has also joined the cult of those voicing concer regarding the concentration of power among Ethereum’s liquid staking providers.
Lido, a prominent liquid staking pool, currently controls over 32% of the staked ether on Ethereum, with holdings distributed across different validators.
Alongside Rocket Pool, Lido is a significant player in the ecosystem, but Buterin highlighted the need for more robust safety mechanisms.
Buterin proposed exploring additional solutions to enhance the safety and decentralization of liquid staking.
As reported, several prominent liquid staking providers have implemented or are in the process of implementing a self-limit rule in an effort to maintain the decentralized nature of Ethereum.
The rule ensures that these providers will not own more than 22% of the Ethereum staking market, which could help address concerns over the growing centralization of Ethereum staking.
Rocket Pool, StakeWise, Stader Labs, Diva Staking, and Puffer Finance are some of the staking platforms that have already committed to the self-limit rule.
However, Lido Finance has decided not to commit to the self-limit rule.
Back in June, the project put forward a proposal to impose a limit on Lido’s maximum stake.
Less than one half of one percent of the votes cast were in favor of the self-limit rule, while those holding more than 99% of Lido’s governance tokens, LDO, voted for the protocol to not hold back on its growth.
Coinbase, the second-largest staking provider, holds only an 8.7% market share, according to data from Dune Analytics.