Ethereum's recent staking growth has led to more centralization of the network and declining staking yield, according to JPMorgan.

"The rise in Ethereum staking since the Merge and Shanghai upgrades has come at a cost as the Ethereum network became more centralized and as the overall staking yield declined," JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note on Thursday.

The Merge upgrade executed in September 2022 shifted Ethereum from a proof-of-work network to a proof-of-stake blockchain, enabling staking. The Shanghai upgrade in April of this year allowed validators to withdraw the staked ether locked in the network and reinvest, leading to a surge in staking.

Lido and its centralization concerns

The major contributors to staking growth are liquid staking providers, …