JPMorgan: Ethereum Centralization Concerns Following the Merge

Has Ethereum's quest for sustainability come at the expense of decentralization? A recent report by JPMorgan has raised concerns that the Ethereum network has become increasingly centralized since the merge and Shanghai upgrades. The highly anticipated Merge, which transitioned Ethereum to a proof-of-stake (PoS) consensus mechanism, aimed to improve energy efficiency. However, JPMorgan’s report indicates that Ethereum has become more centralized following the Merge and Shanghai upgrades.

The rise in ether (ETH) staking since the Merge and Shangha i upgrades has come at a cost to Ethereum as the network has become more centralized and as the overall staking concentration has increased. This concentration raises questions about the network's resilience and potential for censorship resistance. The challenge of decentralization has confronted the Ethereum network since its Merge upgrade in mid-September 2025, a milestone event marking the migration of the network to PoS.

Specifically, The rise in Ethereum staking since the Merge and Shanghai upgrades has come at a cost as the Ethereum network became more centralized and as the overall staking distribution skewed towards a smaller number of validators. This concentration can lead to increased influence by these entities over the network's operations and decision-making processes.

While the Merge offered significant benefits, the increased centralization highlighted by JPMorgan necessitates ongoing vigilance and potential adjustments to maintain the core principles of decentralization that underpin the Ethereum ecosystem. The increase in ETH staking has diminished the diversity of network participants, contributing to the centralization concerns. Future developments and community initiatives will be crucial in addressing this evolving challenge.