– Ethereum is all set to go for a transition to Proof of Stake. – Ethereum merge will impact the system, giving rise to new stakeholders, ‘builders.’ – These builders will change the power structure as they come to the fore. – Ethereum management said they are monitoring the situation and will take the required actions to prevent centralization.
Ethereum merge is drawing closer as the developers suggest successfully completing the required steps. The transition will be complete by 15 September. After that, Ethereum will shift from Proof of Work to Proof of Stake consensus. Every change comes with possible repercussions, and the case is no different for Ethereum. As Ethereum experiences a transition from PoW to PoS, its stakeholders might see a change in their power. The said changes will mainly affect miners who ensure the system’s smooth flow through mining.
Ethereum merge will substantially change the system of this blockchain for good. The new changes are mainly aimed at bringing energy use to lows, and the result would be the elimination of miners. The much-anticipated merge will reduce energy consumption by more than 90%, but it has certain repercussions for users and the system. The new consensus system will have builders as the main players, which will gather and arrange transactions to blocks. The validators will sign off, and thus the upgraded blockchain system will work.
Flashbots or other entities that plan to become builders might use extra control over the system. The Metamask wallet is another reason that might pose threats to the decentralization of Ethereum. The said wallet has more than 30 million users, while it also controls about 40% of the transactions of DApps and other DeFi users.
Metamask can favor one builder over another or even have intentions to become one. Thus, it will kill the competition in the market and create a monopoly. Metamask founder Joseph Lubin has dismissed such concerns about changes after the Ethereum merge. According to Lubin, they will never favor a specific builder. Instead, they prefer to help thrive in a healthy and decentralized ecosystem.
If the builders are too few, they can censor transactions, and certain users might be affected. Thus, the possibility of certain issues has caused alarms amongst the users. Builders can also command a high fee as they control validators. The said change will bring validator earnings to lows. Ethereum management has said that they are closely monitoring the situation. If any possible change leads to centralization, they will take immediate action. Thus, the users can rest assured that the Ethereum merge won’t result in possible centralization.