states that 40%+ Ethereum PoS nodes can be controlled by 2 addresses
Santiment analysis shows that only two addresses control 46.15% of Ethereum’s PoS nodes.
The Merge was hours after the first address had validated 188 blocks, or 28.97%, of the nodes. The second address has validated 16.18% or 105 blocks. Twitter users debated the topic of the Merge’s impact on centralization, which is the basis for the largest global network.
Our #Ethereum After Merge Inflation Dashboard shows that 46.15% of #proofofstake Nodes used for storing data, processing transactions and adding new Blockchain blocks can all be attributed only to two addresses. These addresses are a stronghold and worth keeping an eye on. pic.twitter.com/KQdFNgGloD
— Santiment (@santimentfeed).
September 15, 2022
Nansen, a blockchain analytics platform, released a report showing fiv entity holding 64% of all Ether. Coinbase, Kraken, and Binance account for almost 30% of staked Ether. Reports also revealed that most of the 4,653 active Ethereum nodes were in the control of central web service providers such as Amazon Web Services (AWS).
“The majority of blocks, around 40% to 40%, have been created by two addresses belonging both to Lido or Coinbase since the Merge was completed successfully. It’s not ideal to have more than 40% of blocks settled by two providers, especially one that is a central service provider (Coinbase), ” explained Ryan Rasmussen from Bitwise, crypto research analyst. He
This is not ideal. This is not ideal. However, Lido will have a difficult time maintaining its market share as other staking service providers enter the space and Rocket Pool solutions become more popular. https://t.co/A5s9FeICLD
— Ryan Rasmussen (@RasterlyRock)
September 15, 2022
PoS is believed to encourage centralization because it favors token holders with higher supply than those with lower quantities. The new consensus mechanism for Ethereum blockchain relies on validators to verify transactions. Participants must stake 32 ETH to run a validator, which is roughly $48,225 at press-time.
PoS supporters argue that PoS is safer and more eco-friendly than PoW. Vitalik Buterin, co-founder of Ethereum, predicted that the transition would reduce energy consumption by approximately 95% and help scale the network. Transaction processing is expected to be on par with central payment processors. This transition is expected to occur in the second half 2023.