The declining market share of Lido, Ethereum's largest liquid staking protocol, indicates that Ethereum would likely avoid being classified as a security in the future, according to JPMorgan analysts.

"The share of Lido in staked ETH has decreased further from around one third a year ago to around a quarter at the moment," JPMorgan analysts, led by Nikolaos Panigirtzoglou, wrote in a report on Wednesday. "This should reduce concerns about concentration in the Ethereum network, thus raising the chance that Ethereum will avoid being designated as security in the future."

Last October, JPMorgan analysts expressed concerns that platforms like Lido, although being decentralized liquid staking protocols, "involve a high degree of centralization" and pose risks to Ethereum. However, these …