What are the risks of the Ethereum merger?

One of the main concerns about merging is that of centralization. Another potential concern is the risk of scams, as the general public may not know how the merger works.

A fundamental flaw of the merger is that it will likely increase the concentration of power within the network. The more valuable a staker's position is, the more he will be rewarded for validating blocks. This could lead to a situation where a small number of wealthy individuals or groups control the majority of participation and have disproportionate influence over the network.

Five large organizations control 64% of network share. In the event of a contentious fork, these organizations could collude on which channel to support, potentially censoring transactions or doubling up on funds. Already, critics are debating whether the merger is a "rich get richer" scheme that will empower current stakeholders.

Since staking will be necessary to earn interest on one's ETH holdings, those who cannot afford staking may be shut out of the market. This could lead to increased centralization, as only those with large sums of money could participate in staking.

It's also not uncommon for scammers to take advantage of big transitions like The Merge, claiming that users have to do something (usually involving dropping tokens) to upgrade. Wallet upgrades are also a potential source of scams, as users may be tricked into downloading malware posing as an official update.

Finally, miners who have been operating the Ethereum mainnet for years might still decide to continue on the old Ethereum chain. After all, many of these miners have likely incurred huge electricity and hardware expenses and may feel they have more to gain by sticking to the tried and true mainnet.

This could lead to a split in the community, with two competing versions of Ethereum running simultaneously. Although this scenario is unlikely, there is still a possibility that investors should be aware of.