Vitalik Buterin Confirms Post-Merge Ethereum Centralization Concerns, Urges Not to 'Overly Catastrophize' It

cryptonews.com:

Ethereum (ETH) co-founder Vitalik Buterin has said he is "definitely" worried about centralization risks following The Merge, the event when the current Ethereum Mainnet merges with the beacon chain proof-of-stake (PoS) system.

The Ethereum mastermind noted that Lido Finance, the largest provider of staking services for Ethereum, where around a third of staked ETH (stETH) has been deposited, could theoretically disturb the Ethereum network post-Merge. 

"But I also think it's important to not overly catastrophize the issue," he added.

"First of all, if you have a third [of staked Ether deposits on the Beacon chain], you can't revert the chain or whatever," Buterin said in an interview with Fortune, adding: 

"But realistically, the worst that you could do is make finality stop happening for about a day or so, which is inconvenient, but it's not that terrible."

Buterin also mentioned that Lido does not act as a single entity but that "they have something like 21 delegates and nodes that are running these validators that are inside of Lido," he said, claiming that "there's a lot of good decentralization between them."

Lido is the largest provider of staking services for Ethereum. Generally, users who want to become Ethereum 2.0 validators and earn rewards need to stake a minimum of ETH 32, which is a high price.

However, Lido enables users to pool their ETH and participate in staking even if they don't have the required ETH 32. The protocol distributes stETH tokens to users in return for their staked coins, which can be redeemed for ETH in the future or traded for other coins.

The Merge is Ethereum's long-anticipated update expected to happen by the end of the year.

The upgrade has several benefits, Buterin said, noting that it makes