Such a dumb move for the eth ecosystem. Contrary to BTC, concentration of tokens inside one institution is a direct threat to their project. Why the hell would they want an ETF?
Yeah, not sure it was possible given the incentives.
> How do you expect this to happen?
Institutions will stake their tokens and have disproportionate voice in the consensus. Whenever the US government tell them to do something fishy, they will oblige and no one can do anything. That's not surprising, though: this deficiency in PoS has been well known for a long time.
> Institutions will stake their tokens and have disproportionate voice in the consensus
It's incredibly unlikely institutions will ever own enough ETH to have a disproportionately large share of the token supply, even as a collective. The cost of ETH would rise increasingly as any entity gains more ownership, such that what you're describing would become prohibitively expensive.
In any case, as hanniabu stated, this is not how Ethereum's proof of stake works. Mere token ownership doesn't give you a say on protocol consensus. You would need to run validator nodes, and control 51% of staked tokens. And as noted earlier, that second step would cost you north of $200B (theoretically) in today's numbers, likely north of a trillion in practical terms.
Editing to add:
> Yeah, not sure it was possible given the incentives.
It's a decentralized network. No one entity gets to determine what any other entity does with their tokens, so long as it's legal. That really is the point.
