Coinbase has solidified its position as a titan in Ethereum staking, controlling over 11% of all staked Ether as of March 4, 2025. With 3.84 million ETH locked across 120,000 validators, the U.S.-based exchange has outpaced all other node operators on the network. While this dominance showcases Coinbase’s growing influence, it’s ringing alarm bells among industry leaders who fear it could undermine Ethereum’s decentralized ethos—especially as institutional players eye the staking game.
The Numbers Behind Coinbase’s Rise
According to a March 19 report from Coinbase, the exchange commands 11.42% of staked Ether, valued at roughly $1,871 per ETH at current prices. That’s a hefty chunk of the network’s security, concentrated in the hands of a single entity. For comparison, liquid staking giant Lido holds a larger total—9.4 million ETH, per its website—but spreads that stake across dozens of independent operators, a key distinction highlighted by Anthony Sassano of The Daily Gwei in a recent X post.
Karan Sirdesai, CEO of Web3 startup Mira Network, didn’t mince words in an interview with Cointelegraph: “We’re building a system where a few big players hold way too much sway over Ethereum’s security. That’s a direct threat to the decentralization we’ve been promised.”
Centralization Risks on the Horizon
The stakes could get even higher if U.S. spot Ethereum exchange-traded funds (ETFs) gain approval to stake their holdings—a move asset managers like BlackRock are pushing for. Coinbase, already the top custodian for eight of the nine U.S. spot Ether ETFs, stands to tighten its grip further. Temujin Louie, CEO of blockchain interoperability platform Wanchain, warned Cointelegraph that this consolidation could make Ethereum more vulnerable: “High staking concentrations open the door to censorship and weaken the network’s resilience.”
Sirdesai added a regulatory twist: “These big staking outfits might buckle under pressure from regulators, choosing compliance over resisting censorship. That’s a real risk when so much power is centralized.”
And it’s not just ETFs. New U.S. guidance greenlighting banks as blockchain validators could pile on the pressure. Louie put it bluntly: “If regulated giants like Coinbase and U.S. banks dominate staking, Ethereum starts looking a lot like the traditional financial systems it was meant to disrupt.”
Coinbase’s Defense—and a Potential Challenger
Coinbase isn’t blind to the criticism. The exchange says it’s taking steps to mitigate risks, spreading its staking operations across five countries and leaning on diverse cloud providers, Ethereum clients, and relays. “We’re always keeping an eye on network health and distribution,” the report stated. But is that enough to ease concerns?
Not everyone’s convinced the sky is falling. Sirdesai sees a silver lining in competition—specifically from Robinhood. With its existing crypto infrastructure and massive user base, he believes Robinhood could jump into staking and give Coinbase a run for its money. “They’ve got the tools and the reach to shake things up faster than any bank could,” he said. More institutional players, if balanced right, might even dilute Coinbase’s dominance rather than amplify centralization.
The Bigger: Ethereum Future at Stake
- Coinbase’s Share: 3.84 million ETH, 11.42% of staked Ether.
- Lido’s Contrast: 9.4 million ETH, but decentralized across multiple operators.
- Risk Factors: ETF staking and bank validators could tip the scales further.
Potential Balance: New players like Robinhood might counter the trend.
Ethereum’s staking landscape is at a crossroads. Coinbase’s dominance is a testament to its clout, but it’s also a flashing warning sign for a network built on the promise of decentralization. As institutional adoption accelerates, the question looms: Can Ethereum stay true to its roots, or will it morph into something closer to Wall Street? For now, the industry watches—and debates—while Coinbase holds the reins.
