The Growing Concerns of Ethereum's Centralization and the Rise of Liquid Staking

CoinDesk Indices has launched the composite ether staking rate (CESR), which tracks the annualized yield from staking as a validator on the Ethereum Beacon Chain. The staking rate currently stands at around 3.75% and is a combination of the consensus base reward and the transaction reward. Despite Ethereum's lower advertised yield, when adjusted for supply inflation, it has the second-highest "real" staking rate among the top proof-of-stake protocols. Other protocols have higher annualized rates but suffer from substantial supply inflation, resulting in lower "real" yields. Ethereum's implementation of burn mechanics has reduced its annualized supply inflation to around 0%, making its staking yield more attractive. The growth of staking infrastructure and the emergence of liquid staking are driving innovation and simplifying the staking process.