Whether Ethereum (ETH) is a security or commodity has been a hot topic for some time now. But banking giant JP Morgan’s analysts say that it could avoid being designated as a security due to the increased decentralization of the project. 

The firm issued a report Wednesday highlighting a drop in the amount of Ethereum being staked through one of the largest staking projects in the industry.

“In another positive for the Ethereum network, the share of Lido in staked ETH has decreased further from around one third a year ago to around a quarter at the moment,” the report said. “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.”

In the crypto world, staking is when users pledge cryptocurrency to the network to keep it running. Ethereum requires staking because it now runs on a proof-of-stake blockchain—which uses validators instead of miners to secure the network.

Some raised concerns that ETH was becoming more centralized as a result of its transition to proof of stake because centralized entities like Lido, Coinbase, Kraken, and Binance were where most of the staking was being done. 

JP Morgan noted that the Securities and Exchange Commission (SEC) had previously acknowledged that tokens on a sufficiently decentralized network are no longer securities because there is no “controlling group.”

The SEC’s position on Ethereum as a security is important as it currently weighs multiple applications for a U.S. spot Ethereum exchange-traded product. The SEC has gone after many crypto companies it deems are breaking laws for selling unregistered securities. The federal regulator has opened a public comment period on proposals from three major players looking to enter the space.

The price of Ethereum now stands at $3,418, per CoinGecko data, up nearly 3% over the past 24 hours.

Edited by Ryan Ozawa.