Ethereum ETH/USD PoS teething issues highlighted as price tanks
The Ethereum community has raised security concerns about the new PoS network
UASFs have been recommended as a tamper-proof solution
ETH price eyes $1,250 on weak momentum
Less than a week since Ethereum ETH/USD conducted a successful Merge; concerns are being raised. The now Proof-of-Stake protocol has been faulted as being susceptible to about 51% of attacks. That’s despite the new consensus mechanism being touted as more tamper-proof than the previous PoW.
The issues being raised are related to the concentration of validating power to a few entities. Consequently, Coinbase, Lido, Kraken, and Binance control 59.6% of the staked ETH. The concentration has left the community members worried that it could cause attacks. The entities could work together to rewrite the blockchain or alter the ordering of transactions. They could also censor some portions of the blocks, which increases vulnerability.
Validator collusion refuted
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Ethereum co-founder Vitalik Buterin answers that user-activated soft forks make PoS more secure. When implemented, UASFs blockchain’s nodes will facilitate network updates independently of validators. The Ethereum community can, thus, trigger a UASF to ward off an attacker attempting to control the protocol.
Slashing is another option available against bad actors in the Ethereum PoS ecosystem. Exchanges risk their stack being slashed if they censor ETH transactions. Also, the fact that the staked ETH is not controlled by the exchanges themselves makes collusion difficult.
ETH price continues to fall in the PoS era
It’s a new era for Ethereum, and teething issues are bound to arise. However, it is also true that the PoS shift is a major milestone. Thus, the network’s strength will only improve as problems are addressed. But as it unfolds, investors may have to deal with a bear market.
Source – TradingView
A technical outlook shows that ETH is near the oversold level with an RSI reading of 36. Buyer interest is, however, low, with an 11% fall in trading volumes in 24 hours.
ETH could continue to fall unless sentiment improves on positive macro factors and network specifics. The next support is $1,250.