The much-awaited event is just a day away to occur that may turn the tables for not only Ethereum but for the entire crypto space. As the market sentiments are uneven presently, the impact of the event on the crypto price still cannot be ascertained. Along with this, a fear of Ethereum becoming centralized hovers around as more than 50% of the staked ETH has been in control of a few validators.
In the latest report let out by Nansen, over 11% of the total staked ETH with 65% liquid & 35% illiquid with 426,000 validators & 80,000 depositors. Surprisingly, the report highlights a small group of entities command a huge portion of the staked ETH. A major portion, of about 30% is being held by Lido Finance of the total 13.4 million staked ETH.
Additionally, the on-chain data reveals that the ownership of Lido’s governance token (LDO) carries censorship risks as ownership is not bifurcated but concentrated. Hence the possibility of a 51% attack hovering around the second-largest cryptos after the Merger. As per a popular analyst, more than 51% of the stackable ETH has already been under the control of a small group of early insiders.
Therefore, the analyst believes the other honest stakers cannot do anything as this small group of investors may control the protocol, challenging the decentralization of the ecosystem. However, as per some reports, a censor-resistant switch will be activated by the core developers upon the merger which will help curb this issue.
Wrapping it up, the Ethereum ecosystem may have to deal with newer challenges after the transition. Hence a successful Merger within a decentralized environment could pave way for smoother functioning of the ecosystem.
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