As everyone talks about the Merge, Ethereum (ETH) rebounds, with the rest of Crypto market and DeFi sector. However, as usual in Cryptos, it raises concerns about the lack of decentralization of Ethereum.
Is Ethereum (ETH) truly decentralized?
One way to assess the decentralization level is to look at the nodes, which are the basis of the dapps (decentralized applications):
- According to on-chain data, 68% of the nodes are hosted by cloud service providers, out of which 48% go through AWS (Amazon Web Services). Therefore, 33% of all the nodes are hosted by AWS.
- Regarding the countries, 47% of the nodes are in the US, with the main decentralized exchanges (e.g., Uniswap Labs) hosted there.
Will the Merge change anything?
The merge is supposed to help ETH hodlers to become validators. One has to stake 32 ETH to become a validator. With Proof-of-Stake consensus, no specific hardware is required like previously for Proof-of-Work mining.
However, most of ETH holders do not have 32 ETH. Therefore, they delegate their ETH to some pools... And 3 pools form over 50% of all staked ETH on the Beacon Chain: Coinbase, Lido, and Kraken. That's bad news for the future decentralization of ETH 2.0...
What are the alternatives?
There are 2 schools:
- The Proof-of-Work fans will prefer to hold Bitcoin (BTC) or smaller altcoins which can be mined - e.g., RVN, FLUX.
- The Proof-of-Stake fans will search for alternative to ETH 2.0 using the same consensus - e.g., Cosmos (ATOM), XTZ (Tezos), Polkadot (DOT), Solana (SOL), Cardano (ADA), Near Protocol (NEAR), Elrond (EGLD)...
Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.
Please find below a few links to earn a few coins...
