Is Ethereum Stepping Backwards into a Blockchain 'Monolemma' with the Merge?
This isn’t good for Ethereum. Instead of getting closer to solving the blockchain trilemma, it’s like they’re sacrificing scalability and decentralization. Coindesk writes:
In the hours following Ethereum long-awaited Merge on Thursday, over 40% of the network’s blocks were added by just two entities: Coinbase and Lido.
The shift from proof-of-work (PoW) to proof-of-stake (PoS) was framed by developers as a way to defeat centralization on the second-largest blockchain network by making it harder for individual entities to tamper with the Ethereum ledger. But early signs of network consolidation have raised concerns that those hopes may not come to pass.
“Out of the last 1,000 blocks, 420 have been built by just Lido and Coinbase,” Martin Köppelmann, co-founder of Gnosis, an Ethereum infrastructure firm, wrote in a tweet.
In his thread, Köppelmann mentioned that just seven players own more than two-thirds of the stake on Ethereum’s proof-of-stake network – the key measure of network power under the new miner-free system. Lido, a kind of community-led staking collective, and Coinbase, the world's third-largest crypto exchange, own 27.5% and 14.5% of the network’s stake, respectively.
We noted before that Ethereum’s Merge generates headlines but not so much substance. Ethereum won’t be running smart contracts other than tokens on proof-of-stake, because basically they have no idea how to make that work.
This Merge will not solve Ethereum’s scaling problem, and that’s straight from the mouth of the Ethereum-Magicians. And now the Merge is sacrificing decentralization, too. Not good.
We are building Silvermint from the ground up as a PoS protocol so that we can actually solve the trilemma and provide a proper, secure and truly decentralized payment medium for daily transactions.