Many critics of The Merge claimed that the update could make Ethereum more centralized in a few addresses. And according to network data verified after The Merge, this appears to have indeed happened. According to data analytics company santiment, two Ethereum addresses control 46.15% of all nodes on the network. One of the addresses validated 188 blocks, or 28.97% of the total, while the other validated 105 blocks (16.18%). To get an idea of the level of centralization, none of the other addresses were able to validate more than 55 post-Merge blocks. Most addresses have not validated even 50 blocks, according to Ethereum transaction data.
Post-Merge validated blocks indicate concentration. Source: Ethereum/Santiment dashboard. “According to our post-Merge Ethereum dashboard, 46.15% of Proof-of-Stake (PoS) nodes for data storage, transaction processing and adding new blocks can be assigned to just two addresses. This strong dominance of these addresses is something to watch out for,” warned Santiment.
Attention point?
With the introduction of PoS mining on Ethereum, nodes play a crucial role as they commit token stakes for a set period. In return, the nodes have a chance to be selected to produce the next block of transactions. For each block that a node validates, it receives a reward in Ether (ETH) for its contribution. In this sense, validator nodes replace miners in the task of processing blocks and ensuring network security. It should be noted that it is still too early to make any in-depth assessment, as the validators have only been active for 24 hours. But this beginning of centralization is not positive for a change that, in the developers’ view, would serve precisely to decentralize Ethereum. In theory, PoS mining would allow more validators to join the network without having to shell out large sums of money for electricity or mining equipment. But does the data indicate that centralization can dominate the network?
Too many validators at one address
When Santiment published the article, many ETH users criticized the way the company showed the data. One of them was Tim Janssen, a developer since 2015 and a cryptocurrency investor, who called the article “lazy”. According to Janssen, the two addresses listed by Santiment are not a single entity, but relays. The word doesn’t have an exact translation, but Janssen explains that relays are structures that connect multiple nodes in one place. “What a lazy article. These are flashbot relays. The relays are made up of tens of thousands of people, that is, validators, but because it is 1 relay, it appears as 1 proponent of blocks on the network”, says the developer. That is, the relays would be an entity that represents up to thousands of validators who would have discovered the blocks together in a single entity. For example, validators of the Lido protocol could form a single entity that, under an address, would validate the blocks. But each validator would run its own node independently on the network. Whether PoS mining will make Ethereum centralized or not remains to be seen. For now, the update has validated the blocks perfectly and without any failures in the last 24 hours. Read also: USA advances in digital dollar project Read also: Epic Games launches the first NFT game from its store Read also: Corinthians Fan Token jumps 20% after qualifying for the Brazilian Cup final
