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Home»ETHEREUM NEWS»Ethereum Geth flaw would be fatal for Lido Finance
ETHEREUM NEWS

Ethereum Geth flaw would be fatal for Lido Finance

By Crypto FlexsJanuary 23, 20243 Mins Read
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Ethereum Geth flaw would be fatal for Lido Finance
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Rocket Pool Advocate warned A bug in Geth, the leading Ethereum verification client, could have potentially fatal consequences. Analysts are particularly concerned that over-reliance on clients from top protocols such as Lido Finance poses serious centralization risks that could have a “negative impact on trust and stability.”

Ethereum’s Over-Reliance on Geth Is Very Risky

Geth is one of the best and first clients of Ethereum. Through this validator client, node operators can process and update the blockchain to ensure that all transactions are valid. An important thing to note is that Geth and similar clients have played an important role in Ethereum since the switch from a proof-of-work to a proof-of-stake system.

Users can delegate coins and receive staking rewards through platforms such as Lido Finance or Rocket Pool. As it appears, most Lido Finance validator nodes rely on Geth.

Ethereum price is showing a downward trend on the daily chart | Source: ETHUSDT on Binance, TradingView

In choosing X, the advocate points out that nearly 80% of Lido Finance node operators rely on Geth as a customer. Lido Finance’s other select validator customers include Nethermind and Besus.

This concentration of power could have disastrous consequences, including leading to a fork if Geth encounters a serious bug.

Nonetheless, if we look at the trends over the past quarters up to March 2023, there have been attempts at decentralization involving Lido Finance node operators. For example, Geth’s client share fell from around 80% in April 2021 to 76% in early 2023. Meanwhile, more Lido Finance node operators have chosen to use Nethermind in the past year, meaning its share has increased sharply from 5.5% to around 5.5%. 12.8%.

Popular Ethereum validator among Lido Finance node operators |  Source: Jasperthefriendghost.eth via X
Popular Ethereum validator among Lido Finance node operators | Source: Jasperthefriendghost.eth via X

Clients like Nethermind and Besu play a similar role to Geth in keeping the network updated and secure. However, they offer different features and approaches to operating an Ethereum node.

For example, Nethermind is considered to be more flexible than Geth and has higher throughput with lower latency. This allows Lido Finance and other staking platforms to diversify their validator customers, distributing the workload on the network and reducing focus on Geth.

Lido Finance is the king of liquid staking and is decentralized.

DeFiLlama data so far is show Lido Finance is the largest decentralized finance (DeFi) protocol by total value locked (TVL), with over $22.4 billion in assets under management.

A liquid staking protocol that allows regular users to participate in Ethereum block validation, this protocol is critical to keeping the network secure.

Lido Finance TVL |  Source: DeFiLlama
Lido Finance TVL | Source: DeFiLlama

team introduction October 2023 Security and decentralization will be ensured through distributed verification technology (DVT). DVT allows validators to effectively decentralize work by distributing it across multiple parties.

Featured image from Canva, chart from TradingView

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