The Merge: why Ethereum is becoming the favorite project of banks

Security or risk of censorship – This Swiss crypto bank will supply new validators, the future POS blockchain of Ethereum (ETH), thanks to its new staking offer aimed at institutional investors.

A Swiss bank in ETH staking

The maneuvers accelerate as they approach The Merge. On September 7, SEBA Bank, which is regulated by the Swiss authorities, launched staking on Ethereum for its institutional clients. The bank already offered staking services for Cardano (ADA), Polkadot (ADA), and Tezos (XTZ).

Ethereum’s Switch from Proof of Work (PoW) to Proof of Stake (PoS), Expected to Happen in the Very Next Days – and most likely September 15.

Through its new offer, SEBA Bank is increasing the adoption of Ethereum by institutional investors, who will be able to “ play a key role in securing of the future of the network, via a trusted, secure and fully regulated counterparty,” according to Mathias Schütz, Head of Technology and Solutions at the bank.

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The Merge of Ethereum: power in the hands of the richest

Support is multiplying in different forms. Major crypto or NFT protocols had already expressed their support for The Merge, thus turning their backs on a forked Ethereum blockchain, which will continue to work with proof of work, after this event.

SEBA Bank contributes in its own way to the success of The Merge, by bringing new validators with significant financial capacities to this PoS blockchain. Nevertheless, the massive influx of institutional investors is resurrecting fears of network centralization.

Coinbase CEO Brian Armstrong recently spoke about his company’s position in the event of pressure from regulators on the cryptocurrency exchange, which could endanger the integrity of the network.

However, regulators are not the only threats in this area. Institutional investors, who have a large amount of ether, could agree to censor certain transactions.

Proof-of-stake will thus perhaps solve some scaling issues, and significantly decrease the energy consumption of the network, but it also places control of Ethereum in the hands of big investors.

Good news can hide bad news. Ethereum therefore exposes itself to risks of centralization, by embracing proof of stake. The post-Merge period should nevertheless improve the decentralization of the network on another point, which is linked to its founder.

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