After the Ethereum merger, more than 45% of the network nodes are controlled by just two addresses

According to Santiment, more than 45% of the Ethereum nodes launched after The Merge update are managed by just two addresses. This has raised new concerns in the crypto community about centralization.

Analyst firm Santiment reported on Twitter that shortly after The Merge was completed and the Ethereum network transitioned to Proof-of-Stake (PoS), 45.15% of nodes launched for block validation, transaction processing, and data storage are operating with just two addresses. This confirmed that the transition of Ethereum to PoS may not be without fundamental problems and raised new concerns in the crypto community about the centralization of the network.

according to our #Ethereum Post Merge Inflation dashboard, 46.15% of the #proof of stake nodes for storing data, processing transactions, and adding new #blockchain blocks can be attributed to just two addresses. This heavy dominance by these addresses is something to watch. pic.twitter.com/KQdFNgGloD

— Santiment (@santimentfeed) September 15, 2022

At the time of writing the Santiment report, the first address has confirmed about 188 blocks, which is 28.97%. The second address confirmed 105 blocks – 16.18%. These two addresses have a combined share of 45.15% of all nodes. The data presented by Santiment caused a mixed reaction among members of the crypto community. Some see this as confirmation of their concerns about the centralization of the network, others as a reason to accuse platform observers of incompetence.

Proponents of the first point of view declaredthat both addresses may belong to the Ethereum Foundation and the American multinational investment bank JPMorgan Chase & Co. In addition, there are fears that Ethereum could become more centralized, if only due to the fact that only five organizations account for up to 64% of the 13.4 million allocated ETH. Moreover, the liquid betting service Lido accounts for the largest share of 31%.

In August with my fears shared Web3 storage infrastructure co-founder Maggie Love, who revealed that most nodes on the Ethereum network are run by centralized providers, including Amazon Web Services (AWS), which dominates the space with a 52.1% share, Hetzner (over 15%) and OVH (4.1%).

Proponents of the opposite point of view said that Santiment analysts were superficial in their analysis of current events. The addresses cited as an argument for their message are actually tens of thousands of validators, which suggests that they are just relays.

Earlier, Ethereum 2.0 node validator Rocket Pool stated that the only way to counter the post-merger regulatory takeover of the Ethereum network is by topological and geographic decentralization of validators.