Problems with network centralization and statements by Gary Gensler have marked a negative weekend for Ethereum.
In the past week The Merge took place, one of the most important events in the history of the blockchain, which changed Ethereum's consensus mechanism to a Proof-of-Stake one based on ETH validation and staking nodes.
The Merge has been one of the most anticipated events by the Ethereum community, since in addition to changing the consensus mechanism, it also improves the network reducing your energy consumption by 99% and turns ETH into a deflationary asset.
Despite the initial euphoria, a part of the community warned about some problems related to the change in consensus, the main one being: a greater vulnerability to censorship.
Now, a Santiment analysis of Ethereum inflation following the September 15 merger has found that 46,15% of ETH PoS nodes are controlled by two wallet addresses.
Ethereum PoS controlled by two wallets?
Santiment data indicates that, after the update, one address has validated 188 blocks, which represents 28,97%, while a second address has been in charge of 16,18%, about 105 blocks.
This demonstrates that two wallets dominate most of the processing, data storage and adding new blocks on Ethereum.
With the implementation of PoS mechanism on Ethereum, The nodes play a crucial role, since they are responsible for select next block of transactions that will occur, in exchange for staking ETH.
Although the new era of Ethereum is still in the early phases, two-address dominance is on the way. against the Ethereum Foundation's vision of decentralization of the network. In fact, the objective was that the system of staking Improve the distribution of network control among all users.
SEC puts downward pressure on Ethereum price
On the other hand, Ethereum's transition to a Proof-of-Stake mechanism has led Gary Gensler, chairman of the United States Securities and Exchange Commission (SEC), to ensure that ETH could now be considered a security, which has caused the price of the asset to lose much of the traction it had accumulated in recent weeks.
According to Gensler, “tokens that require investors to stake to obtain returns are considered values”, in this way, although he has not directly mentioned Ethereum, The description of what is considered “value” fits the new era of ETH.
On this, the SEC chairman says that this description fits the common business model of assets that fall under securities laws, while explaining that Bitcoin will remain exempt from SEC regulatory policies, since due to the mining mechanism it is not considered a value, but rather a commodity.
Gensler's comments have sparked a wave of fear among investors, as a portion of the community fears that the SEC will employ an approach similar to the one had with Ripple andtake legal action against Ethereum.
Added to the metrics that point to a centralization problem in Ethereum after the change to PoS, ETH has been one of the tokens that has lost the most traction over the weekend, something that contrasts with the initial euphoria after The Merge that pointed to a bullish rally driven by institutional investment.
Who wins and who loses from the Ethereum upgrade?
Clearly, the environment is the main winner in the exchange Ethereum to Proof-of-Stake, since the energy consumption of the network is reduced by 99,97%. According to Vitalik Buterin, this change could reduce global electricity consumption by 0,2%.
Moreover, decentralization is the big loser of change, since for now only two wallets control almost half of the transactions, which puts the network's resistance to manipulation and censorship at risk.
However, the new era of Ethereum has just begun, so it is still early to know how the new PoS system will work. In this sense, the next few days will be crucial for the price of ETH over the coming weeks.
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