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Ethereum Node Locations Raise Concerns About US Government Involvement

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Ethereum is currently the largest proof-of-stake (P0S) network after moving out of the Proof-of-Work (PoW) mechanism late last year. This means that the network now uses validators to perform transactions instead of miners using power-hungry computers to solve complex mathematical problems to do the same – something that has been hailed as a step in the right direction by many in the space.

However, the location of Ethereum nodes around the world, and especially their concentration in a specific location, raised concerns among participants after a Twitter user pointed out an inconvenient fact.

Over 50% of Ethereum nodes are located in the United States

On Sunday, Twitter user go-to Hamza Khan posted a post revealing that more than 50% of Ethereum nodes are hosted in data centers in the United States.

Even more interestingly, of this massive share of node distribution being hosted in the country, more than 50% were hosted in a single data center.

This data center location was the most important. The data center located in Virginia is said to be just 20 minutes away from the headquarters of the US Central Intelligence Agency (CIA), as well as the White House.

Now, while the site has been referenced, it shows the US government’s lack of involvement in the operation of Ethereum. Instead, as Ether.fi points out, it shows that Ethereum is not as decentralized as participants would like.

ETH price falls below $1,900 support | Source: ETHUSD on TradingView.com

Additionally, Mike Silagadze, also CEO of Ether.fi answered to the tweet to clarify that the number of nodes on their website needed to be updated. Compared to the 5,500 on the site, Silagadze said there are now about 6,800 Ethereum nodes running. But as another user on Twitter pointed outdoes not change the “distribution” nodes referred to above.

The rise of liquid cohesion

Becoming a validator on Ethereum carries a huge barrier to entry because valuers are required to have a total of 32 ETH. At current prices, this translates to about $60,000 to run a single verification node. And since a large percentage of users cannot afford it, Liquid Staking Protocols has seen great success for the services it offers.

Staking Liquid protocols like Lido Finance and Rocket Pool allow investors to remain staking even if they don’t have up to 32 ETH in their hands. Users can pool their ETH together to make a validator. This way, they will be able to earn rewards without running a full node themselves.

Ethereum

Lido leads ETH liquid staking | Source: DeFiLlama

Over the past year, protocols such as Lido Finance have seen a sharp growth, propelling them to the forefront of ETH. Currently, there is More than $14 billion is staked on the Lido Liquid Staking protocol, representing about 30% of the total pegged ETH. In total, liquid staking now accounts for over 37% of all staked ETH, and it’s rising.

This growth was born out of the need for more decentralization of the Ethereum network as nodes became more widespread. However, despite the rise in liquid storage space, Ethereum nodes are still highly concentrated, especially in the US.

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