Analysis from Santiment It suggests 46.15% of Ethereum POS nodes are controlled by only 2 addresses.
Hours after the merger, the first address secured around 188 blocks or 28.97% of nodes, while the second secured 16.18% or 105 blocks. The information became a hot topic on Twitter as users debated the merger’s impact on the world’s largest network.
Like us #Ethereum Post-merger inflation dashboard, 46.15% of #Evidence Nodes to store data, process transactions and add new ones #blockchain Blocks can be specified with only two addresses. The overwhelming dominance of these addresses is worth noting. pic.twitter.com/KQdFNgGloD
— Santiment (@santimentfeed) September 15, 2022
Before the merger, blockchain analytics platform Nansen released a report showing that 5 entities held 64% of all Ether held, while Coinbase, Kraken and Binance held nearly 30% of ETH. According to reports, most of the 4,653 active Ethereum nodes are in the hands of centralized web service providers such as Amazon Web Services (AWS).
“After the successful completion of the merger, most of the blocks – about 40% or more – built by 2 addresses belong to Lido and Coinbase. It is not good to see more than 40% of the blocks placed by 40%. 2 providers, especially one centralized service provider (Coinbase ),” explained Ryan Rasmussen, crypto research analyst at Bitwise
This is not ideal. However, I think Lido will struggle to maintain this market share as more lido service providers and lido competitors enter the space and solutions like the Rocket Pool become more popular. https://t.co/A5s9FeICLD
— Ryan Rasmussen (@RasterlyRock) September 15, 2022
PoS is often believed to lead to centralization because those with a higher token supply have more leverage than those with a lower one. As an example, the new consensus mechanism in the Ethereum blockchain relies on verifiers to verify transactions – not miners. To run a validator and be rewarded, participants must sell 32 ETH, which is equivalent to $48,225 at press time.
Proponents of PoS, however, argue that the method is more secure and environmentally friendly than PoW. Ethereum founder Vitalik Buterin predicted that the transition would not only reduce energy consumption by around 95%, but also help expand the network, with transaction processing expected to be on par with centralized payment processors. Set in the second half of 2023.